I received a study from my insurance company and found it interesting and useful, so I thought it would be useful to my clients, too. 

We all know running a retail business in Australia takes dedication and a keen eye for managing risks. Understanding the most common reasons for insurance claims can help us protect our business. Here, I will discuss the top five insurance claims that we face, plus some actionable tips to help you reduce your risks.

One point I will say before I even start getting a few quotes: I was quoted $20,000 by one insurance company and another $5,000 for what looked to be similar policies, Did you figure out why the big difference, I could not?

1. Theft and Burglary: Protecting Your Assets

Retail businesses are tempting targets for criminals, so you need a security plan. Here's how to deter thieves and protect what you've built:

• Cameras: Install a good system, I had one client put one in the backroom and discovered that thieves were coming through a small window and taking things.
• Good alarm: They do work; one caveat is that a modern thief often knows how long he has before the police come from when the alarm goes off. I had one client who had frequent breaks in his shop. The thief would break the window, run in, take some items, run out, go in the car, and be gone by the time the police arrived.
• Secure every entry point: Use robust locks on all doors and windows, and don't overlook potential vulnerabilities like ceiling spaces or vents.
• Let there be light: Good lighting deters criminals and makes suspicious activity harder to hide.
• Background checks and a vigilant team: Screen employees carefully, have a clear anti-theft policy, and encourage staff to report anything unusual.
• Track your valuables: In your POS Software, you have an asset register; why not use it?  
• Consider extra protection: Consider a locked display stand for businesses with high-value goods or in high-crime areas. 

2. Storm Damage: When Mother Nature Strikes

The increasing intensity of storms makes it crucial to protect your business. Water damage, power surges, and building collapse from strong winds can quickly disrupt your operations.

• Maintain your roof and ceilings: Regular inspections and repairs can prevent devastating leaks and structural problems. 
• Don't let water linger: Clear gutters, drains, and downpipes to prevent flooding risks.
• Trim those trees: Overhanging branches pose a significant risk during storms. I had a client who had a tree branch storm fall on his roof and smash into his shop.
• Safeguard your electronics: Turn off equipment you do not use at night; saving you money on electrical bills and saving a few trees will stop electrical surges. A good UPS  can also help protect your computer from surges often during storms.

3. Liability Claims: Safety is your responsibility

Protect your business from these costly scenarios:

• Safety first: Keep floors clean and dry, mark any hazards, and ensure good lighting, especially in customer-facing areas.
• Restrict access to hazardous areas: Identify areas with machinery, dangerous substances, or work in progress and limit public access.
• Train your team: Educate them on handling customers' property, safety procedures, and how to prevent accidents.
• Quality control is critical: Make sure your products meet all safety standards and have robust checks throughout production.
• Cameras: If people fall, it's great to have camera footage to record what happened; it may help in court.

4. Property Damage:

Property damage is a big one.

• Maintenance matters: Regular repairs and servicing might seem expensive, but they're far cheaper than dealing with significant damage later. A client had a roof that leaked and ruined a lot of stock with water damage. He thought it was a one-off, so he left it. A few days later, another big rain happened, and it leaked again.
• Please keep it clean: Promptly remove waste and clutter to discourage pests, reduce fire risks, and prevent trip hazards.

5. Machinery/Equipment Breakdown: When Your Tools Let You Down

Relying on machinery and equipment means being prepared for potential breakdowns. Minimize costly downtime with these steps:

• Store it right: Proper storage conditions protect equipment from dust, moisture, and extreme temperatures. 
• Know how to use it: Ensure you know how to use and care for the machinery.
• Don't ignore warning signs: If a machine starts acting up, investigate and fix the issue promptly to avoid a major breakdown. A computer making funny noises is actually saying something.
• Have a backup plan: Consider how you'll keep operating or minimize impact if a critical piece of equipment fails.

Conclusion

By understanding these top risks, SMEs can proactively safeguard their business. Investing in security, prioritizing maintenance, and fostering a culture of safety awareness is key. Remember, insurance although a valuable safety net, is only a last resort.

What if there is a riot?

What if your shop gets smashed?

Are you covered?

Imagine this is your shop. What are you thinking?

For many of us now as its, the financial end of the year and are insurance is now due, it might be a very good time to find out. Only about 50% of retail insurance packages cover such damage.

I was reading here of a shop keeper in the US, who had damage of almost a million dollars. Then they discovered that the insurance will not cover any of it as their policy does not include losses from civil disturbances. A million dollars is a lot of money to a small business like this that earns about $150,000 a year from the business.

An American a few months ago, told me when he was 18, that he stood in a neighbourhood vigilante squad armed with sticks and guns when riots took place there. Those riots devastated his town. Now I can now appreciate what he was talking about as now gun sales in the US are skyrocketing.

Well, 2020, has been eventful, we started with bushfires, a pandemic and now what is planned to top this.

Anyway, I am going to ask my insurance broker shortly about what exactly is covered and I suggest that you do so too.