As 2020 kicks off, the New Zealand economy is healthy with growth expected to remain stable. Unemployment is low and wage growth is moderate, pointing to a generally positive business landscape for NZ organisations.
There are plans to increase the minimum wage by 21 per cent by 2021, which could put some pressure on smaller businesses. Furthermore, the proliferation of zombie companies could be a disaster in the making. These companies are still in operation only because the cost of servicing their enormous debt is close to zero; if they were forced to make more reasonable repayments, these organisations would soon have to stop trading.
The possibility of a change in government in 2020 could also lead to a different economic landscape and, with growth at relatively low levels, a recession isn’t impossible.
Even in a well-established business with years of successful trading, it’s important to be aware of the risks the business could face and have a strategy in place to mitigate those risks.
Protecting your business and managing risk can take many forms including putting policies and procedures or physical safety measures in place to reduce various risks. And, for most business owners, this includes taking out business insurance. Your insurance should cover you from everything from losses due to fire, theft, or earthquake to professional indemnity and even cyberattacks.
While most business owners are aware of the importance of having insurance, many don’t realise that not all insurance policies are created equal. It’s essential to work with an insurance broker that can provide two essential elements:
- Risk identification and management
Running a business is complex and multifaceted. There are so many things to stay on top of that it can be easy to overlook the risks that could face your organisation. These risks can still be present despite your best efforts to mitigate them. Therefore, it’s important to partner with an expert who can help you identify the risks you could face, then manage those risks appropriately.
This doesn’t necessary mean spending more than you can afford on complicated and comprehensive insurance policies. An experienced broker will respect your budget and your appetite for risk and develop a plan that suits your unique needs.
Furthermore, your broker should be able to point out key risks and offer advice on how to mitigate those risks outside of insuring against them and without incurring unsupportable expenses.
- Claims management
Having a strong insurance policy is one thing. Having the insurer approve your claim if something goes wrong can be another story. A wrongly-worded claim or a lack of understanding of how the claims process works can lead to your claim being denied. If that happens, you could be out of pocket for things you were certain were covered under your insurance, which can be stressful as well as damaging for your business.
It’s therefore crucial to work with an insurance broker who can walk you through the claims process, giving your claim a better chance of being approved sooner. The broker should have strong relationships with insurance providers, which will help streamline the claims process and reduce the risk of a claim being denied.
As 2020 kicks off, it’s important to make sure your business is adequately protected against all the risks you may face in the coming year. If it’s been a while since you’ve reviewed your insurance, now is the time to get an experienced insurance broker to take a close look at your policies. You may be able to save money or get a policy that’s better suited to your current business needs.
To find out how a NZbrokers member can help you manage risk in your business, contact us today.