Good Governance:

A Guide for Business Leaders

Lisa Carter, CEO - Clear Insurance

Good governance and regular evaluation of business risks are essential to steer your business towards a secure and prosperous future.

Why is it important to understand your financial risks?

Potential risks may include new business activities, contracts, property damage, liability claims, or operational disruptions. With a good understanding of your risks, you can make informed decisions regarding their management, mitigation or transfer to insurance.

What protective role can insurance play for businesses?

Insurance acts as a risk transfer mechanism, providing financial protection against unforeseen events. However, simply having insurance is not enough; it must be specific to your needs, and you must consider your overall approach to risk management and mitigation. We encourage you to take advice from a risk and insurance expert who’ll guide you through the options and empower you to make informed decisions.

How can you evaluate the risks in your business?

It's prudent to consider the following:

• What are the challenges and opportunities in your business?

• Are there any gaps or exclusions in your insurance program that could leave your business vulnerable? 

• Are the insurance policy limits sufficient? If not, does this place pressure on your cash flow and reserves?

• Are you confident that your insurers comprehend the unique needs of your business? 

Is underinsurance an issue?

Underinsurance is prevalent in Australia. We encourage you to understand your insurance program and the sums insured thoroughly. If a claim exceeds the insurance limit, your business may face significant out-of-pocket expenses and may expose you to personal liability.

For property owners, obtaining independent insurance replacement valuations from qualified valuers can clarify replacement values, reinstatement costs, and time frames, thereby determining the appropriate sums insured.

What can you do if you have concerns about your insurance program?

If you have concerns, it's advisable to reach out to your insurance adviser without delay. For additional support, Clear Insurance provides a no-obligation risk and insurance review to ensure peace of mind. To schedule a consultation, contact Lisa Carter at lisa.carter@clearinsurance.com.au or call 1300 721 132.

General Advice Warning: This advice is general and does not take into account your objectives, financial situation or needs. You should consider whether the advice is appropriate for you and your personal circumstances. Before you make any decision about whether to acquire a certain product, you should obtain and read the relevant product disclosure statement. Clear Insurance Pty Ltd. ABN. 41 601 916 689. AFSL No. 548953.