Broking boss says SMEs ‘falling victim’ to online providers

Broking boss says SMEs ‘falling victim’ to online providers

Broking boss says SMEs ‘falling victim’ to online providers SMEs in Queensland are “falling victim” to online insurance providers, who claim to provide comprehensive cover for a fraction of the price but do not provide sufficient coverage.

Many businesses with standard cover are approaching brokerages such as Beenleigh-based Parmia Insurance when a claim has been made against them which their policy does not cover.

Parmia Insurance director Danny Gumm said that due to events such as the 2011 floods, many businesses are now taking insurance much more seriously, but unfortunately there are companies out there that are taking advantage of that.

“The policies are worded very carefully but if you really look at them, you’ll see that there are many shortfalls that are leaving businesses underinsured and exposed to significant financial damage if they were to be sued,” he said. “This is because there is no ‘one size fits all’ solution for insurance. Every industry is different and has its own unique risks. An insurance policy for a beauty salon should not be the same as one for business consultants.”

Gumm said he had had many businesses approach Parmia in financial hardship after a claim has been made against them that their standard insurance policy has been unable to cover.

“Tailored protection provides businesses with the opportunity to increase profits without the financial risks involved in potential liabilities.”

Natasha Burr, senior account manager at Parmia said the issue is that a policy that may be comprehensive for one person is different for someone else.

“Your cover can only be deemed comprehensive when all of the liabilities have been taken into account and a full risk analysis has been undertaken when selecting one or more policies – a broker is an expert in identifying those exposures and evaluating against the products available in the market.”

Burr said the shortfalls with so-called comprehensive policies are that clients may find they are underinsured.

“The policy shortfall depends on what the customer wants to protect. A person’s exposures and liabilities even if they are of the same occupation, can be somewhat different,” she added.
 
 
6 Comments
  • Mike Sullivan 13/05/2014 9:32:10 AM
    well thats all good to tell our colleagues, but we need to tell the public that and the media, ASIC and the legislators ????

    Why does NIBA AND THE CLUSTER GROUPS BUT PRESSURE ON THE INSURERS
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  • Mark 13/05/2014 9:40:23 AM
    Our industry should be promoting the cover, not just the price, you get what you pay for. Consumers are buying on price, that is very dangerous when trying to protect your biggest assets eg the family home, business assets etc
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  • Alex Damon 13/05/2014 9:48:07 AM
    Fact of the matter is that SMEs should not be insuring direct at all, whether on line or otherwise, because they have none of the protections that consumers have and have to be their own insurance experts. Ultimately insurers can throw a 100 page policy at them and say "caveat emptor", notwithstanding any possible error in the expert advice the client has received from the 20-year-old at the call centre.
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