The dynamic nature of today’s economy means that business risk exposures and insurance needs are changing more rapidly than ever. When was the last time you took a step back from the demands of running your Strata Management firm, to assess whether your business insurance is still adequate? Does it actively reduce your risk exposures?
Resolute’s commercial insurance specialist partners have outlined the key areas of insurance where Strata Management business owners should pay attention.
1. Property – insure your physical business assets
As Strata professionals, you understand the importance of acquiring the right Strata Insurance to protect your clients’ buildings from physical damage and perils such as fire and flood.
Of equal importance however, is ensuring the physical assets integral to the operation of your own business are comprehensively insured against a variety of risks like fire, theft, storm damage, flood etc. Depending on whether you lease or own your business premises, the following covers should be considered:
- Commercial property insurance – if you own and occupy your premises
- Contents insurance – i.e. computers, desks, office equipment
- General property and portable contents – i.e. laptops, electronic devices etc.
- Equipment or Machinery Breakdown – if you are responsible for air conditioners, lifts etc.
For further information on what can be covered by a Business Insurance policy, speak to your Resolute Account Manager.
2. Professional Indemnity (PI) – protection for a breach of professional duties
A breach of professional duty, whether actual or alleged, can result in expensive legal action. Defence costs, in addition to any payments for damages, can lead to significant financial losses for both individual directors and companies.
With society becoming increasingly more litigious, claims against businesses that offer professional services or advice are becoming a regular occurrence. Professional Indemnity insurance is designed to provide financial protection for you and your Strata Management business should a claim alleging a breach in professional duty be brought against you.
Professional Indemnity cover can include protection against:
- Errors and omissions
- Costs incurred due to a loss of documents
- Fraud and dishonesty
- Legal defence costs
To learn more about Professional Indemnity Insurance, click to read our article: Strata Managers – Do you have a Professional Indemnity Safety Net?
3. Management Liability – cover the risks associated with running a business
Management Liability Insurance can protect the financial position of your business and personal assets against claims that transpire as a result of:
- wrongful acts by directors, or
- various criminal acts performed by employees.
Management Liability Insurance is designed to cover claims (actual or alleged) arising from events such as:
- wrongful dismissal of a staff member
- dishonest acts by employees (e.g. theft, fraud)
- sexual harassment or bullying allegations
- statutory breaches
- tax audit
For additional information on Management Liability Insurance, and how it can protect you, read our article: Why Management Liability Insurance is essential for all Strata Management businesses
4. Business Interruption – stay afloat if you’re unable to operate
In the event of a serious property damage claim, could your business survive financially if forced to cease trading for a few months? Figures show that 25% of 500 businesses surveyed, would not survive a 3 month closure (i).
Business Interruption cover is designed to keep your business afloat if you are unable to operate at normal trading capacity. It can provide ongoing payments during the indemnity period to ensure your basic operational expenses are met until you are back on your feet.
Business Interruption Sums Insured can be difficult to calculate, and can often end up being less than what you were expecting. To ensure you have sufficient financial support should things unexpectedly hit the fan, ask your Resolute Account manager to guide you through this process.
5. Public Liability – protect the legal liability at your business
Essential for every business, Public Liability insurance can protect your Strata Management firm against the significant cost associated with third-party legal action as result of your actual or alleged negligence, which causes property damage or personal injury on your premises. It can cover you for:
- damages you are required to pay as a result of a claim
- compensation for third party personal injury and/or property damage, arising as a result of an occurrence in connection with your business
- legal proceedings, including defence costs incurred to defend the claim
6. Cyber Liability – financial protection in the event of a cyber incident
Cybercrime is becoming increasingly common among smaller businesses, with companies who employ between 1 – 250 people being the most at risk. The average cost of a cyber – incident to small businesses in Australia is over 250,000 (ii).
Whether you are a multinational company or a small business, being hacked and having sensitive data stolen is a risk that could seriously impede your business’ ability to operate, whilst also exposing your balance sheet to expensive IT reinstatement costs, third-party litigation, loss of profits and statutory fines.
As businesses that store significant amounts of client data, Strata Managers are an attractive target. We highly recommend all businesses hold a Cyber Insurance policy.
Cyber Liability Insurance can offer a range of features to protect your assets:
- Data security expenses
- Privacy breach costs
- Reputational repair
- Network interruption
- Fines and penalties
- Legal defence costs
Click here to read Resolute’s article on the necessity of Cyber Insurance for Strata Managers.
For more advice on essential insurance covers for your Strata Management firm, or to obtain additional coverage for your business, please contact Resolute Property Protect:
Ph: 1300 668 033