Farm in­sur­ance and you

North East & Goulburn Murray Farmer - - Farm Safety -

UN­DER­IN­SUR­ANCE is a prob­lem that is more com­mon in Aus­tralia than many people first re­alise.

As the name sug­gests, it oc­curs when you take out in­suf­fi­cient in­sur­ance cover.

Ac­cord­ing to Elders In­sur­ance Wan­garatta agent John Houghton, this term can ap­ply to a range of sit­u­a­tions, so whether you’re tak­ing out busi­ness in­ter­rup­tion in­sur­ance or cover for your property, it’s es­sen­tial to make sure your prod­uct is up to the job.

“It might be that you have in­sured cer­tain fea­tures for less than they are worth or over­looked key parts of your op­er­a­tions - ei­ther of these sce­nar­ios con­sti­tutes un­der­in­sur­ance,” Mr Houghton said.

“There are sev­eral risks as­so­ci­ated with un­der­in­sur­ing your busi­ness, some of which could prove de­bil­i­tat­ing if they were to ever hap­pen.

“If you have to make a large scale claim on your busi­ness in­sur­ance, you could find that the money you re­ceive in re­turn is in­suf­fi­cient to get your op­er­a­tions back up and run­ning.

For ex­am­ple, if your equip­ment is in­sured for $25,000 but is ac­tu­ally worth $75,000, how would you plug the $50,000 gap?

“The pur­pose of in­sur­ance is to of­fer fi­nan­cial pro­tec­tion should the worst ever hap­pen, so ask yourself whether there is any rea­son to take it out at all if it does not fully cover your claim.”

To avoid un­der­in­sur­ance Mr Houghton said it is nec­es­sary to take the time to carry out an ac­cu­rate cal­cu­la­tion of all your as­sets to en­sure ev­ery­thing is in­cluded when you ap­ply for cover.

It is also im­por­tant that you do not as­sume that the dol­lar fig­ure will re­main the same each year.

“Each time you pur­chase new equip­ment or move to dif­fer­ent premises, be sure to check that your in­sur­ance will still be suf­fi­cient.

“The adage of ‘it’s bet­ter to be safe than sorry’ has never been more rel­e­vant than with busi­ness in­sur­ance,” Mr Houghton said.

For more in­for­ma­tion con­tact John Houghton at Elders In­sur­ance Wan­garatta on (03) 5722 1400.

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