Insurance Review
Questions to consider include:
• If you are selling a large proportion of sales by credit, have you considered applying for a “credit insurance policy”?
• Has your business reviewed the adequacy of insurance covers based on current replacement values, including fire insurance on buildings & contents; storm & tempest; cyclones?
• Have you reviewed other insurance policies that may not reflect the current value required because of salaries and profits, including loss of profits insurance; key person insurance; business buyback insurance; sickness and accident insurance?
The new financial year is an ideal time to review the adequacy of your insurances. Insurance reviews should be taken very seriously. You might choose to appoint an external adviser to assist in determining the adequacy of insurance covers, particularly relating to the indemnity period to be covered in a loss of profits insurance cover. This really asks you to answer:
• How long would it take to replace the office; shop or factory if it was destroyed?
• Which people would you retain during the re-building process?
• What expenses would still be incurred irrespective of turnover?
Succession Planning for Business
• Has appropriate insurance been affected on the key people within the business?
• If you have a Buy/Sell Agreement, has it been reviewed and updated?
• Do the members of the management team know the business’ succession plan?
• What would be the reaction of bankers and suppliers in the event of the death or serious illness/accident of a key person within the business?
• Have external executives been introduced to the management team?
• Are non-family employees given the same benefits for promotion and training as that offered to family members?
• Are regular staff appraisals conducted for all team members including family members?
• Have job descriptions been prepared for all staff?
• Is there a Family Charter/Constitution?
Survival in Difficult Times
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This post is part of the “Survival in Difficult Times for SMEs” series.
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Article by Christie Lewis
Christie is Practice Manager at Alan Lewis Accountants . Besides accounting, her passion is for all things small business (and blogging, of course). You can contact Christie directly at christie@lewistaxation.com.au.
Christie has written 799 awesome articles for us at Alan Lewis Accountants – BLOG
Twitter: @christielewis
{ 1 comment… read it below or add one }
Hello, great discussion. I think insurance companies will always have their places. People keep growing. It is not long until they need insurance for their lives and assets. Thank you.