When to call in the special risks insurance brokers

Business with assets of more than $2 million may benefit from special risks insurance, rather than conventional policies.

Special risks insurance brokers can help you asses whether the move is appropriate for your business.The prime advantage to special risks insurance – sometimes also known as industrial special risks insurance – is that it is “umbrella” insurance. That means it covers any risk which hasn’t been specifically excluded.

In contrast, conventional insurance only covers you for risks that are explicitly listed as being included in a policy.

Special risks insurance is particularly useful in a situation where a claim is unclear and the onus is on the insurer to prove why you shouldn’t be covered rather that up to you to prove why you should.

Opinions vary on how large a business needs to be before a move to special risks insurance is warranted.

The minimum asset value insurable with special risks is usually $2-$3 million but some believe it is unlikely to offer better value until you reach $5 million in insurable assets.

For businesses of this size, special risks insurance offers not only better cover but, sometimes, lower premiums too. However, it is worth noting that excesses are also higher, typically starting at about $1000.

Special risks insurance usually replaces separate insurance for fire and perils/property damage, debris removal, business interruption, prevention of access and theft.

Businesses with high value assets such as property, equipment or machinery can benefit from special risks insurance, which is frequently used in the manufacturing, resource and construction industries, as well as by large universities and councils.

1300 INSURE (1300 467 873) | F: 1300 365 822 | ebm@ebm.com.au | www.ebm.com.auNew South Wales | Victoria | Queensland | Western Australia | South AustraliaCoverholder at Lloyd’s | Global Broker Network | Asia Australasia Alliance | National Insurance Brokers AssociationElkington Bishop Molineaux Insurance Brokers Pty Ltd | AFSLN 246986 | ABN 31 009 179 640 | Est 1975

Our advice about insurance is provided for your general information and does not take into account your individual needs. You should read the Product Disclosure Statement and Policy Wording prior to making a decision, these can be obtained directly from EBM.

Special risks insurance is a complex area. In addition it’s worth being aware that the most common special risks base policy wording was created in the 1980s, so it doesn’t take into account more recent risks such as cyber exposures.

Common exclusions include flood, machinery breakdown and electrical equipment breakdown – all of which can be covered separately, whether by extending the special risks policy or with separate insurance.

Your broker may be able to negotiate “endorsements” so that exclusion doesn’t apply to you – or advise you to extra insurance you need to take out to cover any exclusion.

Factors insrurers examine when calculating the premium for special risks insurance include:• The type of activates the business undertakes• Construction materials of the business premises• Value od the assets to be included and• Previous insurance and claims history.

Under special risks insurance, the insured party is also required to do their bit by taking all reasonable precautions to prevent loss, destruction or damage to the property insured.

As with all insurance, it is vital to keep special risks insurance up to date with accurate valuations so that your never unknowingly underinsured.

If your business has grown to a sixe were special risk insurance could come into play, congratulations – and don’t forget to call in special risks insurance brokers to help you on the your way.

Here the author, James, writes about special risks insurance brokers. If you have any query about our services, visit our website http://www.ebm.com.au or feel free to call us on 1300 463 873.

When to call in the special risks insurance brokers

1300 INSURE (1300 467 873) | F: 1300 365 822 | ebm@ebm.com.au | www.ebm.com.auNew South Wales | Victoria | Queensland | Western Australia | South AustraliaCoverholder at Lloyd’s | Global Broker Network | Asia Australasia Alliance | National Insurance Brokers AssociationElkington Bishop Molineaux Insurance Brokers Pty Ltd | AFSLN 246986 | ABN 31 009 179 640 | Est 1975