How do insurance companies assess risk?

Insurance companies assess risk through a process known as underwriting. Underwriting involves evaluating various factors to determine the likelihood of a claim occurring and the potential costs associated with it. Here are some common methods and factors insurance companies use to assess risk:

1. Application and Questionnaires: Insurance companies collect information from applicants through application forms and questionnaires. These forms typically ask for details about the applicant's personal information, property, health status, driving record, or business operations, depending on the type of insurance. The provided information helps insurers gauge the level of risk associated with the applicant.
2. Historical Data and Actuarial Analysis: Insurance companies rely on historical data and actuarial analysis to assess risk. They analyse past claim data and statistics related to similar risks to identify patterns, trends, and probabilities. Actuaries, who specialize in risk assessment and statistical analysis, use this data to develop models and calculate insurance premiums based on the estimated likelihood and cost of claims.
3. Risk Factors and Rating Variables: Insurers consider various risk factors or rating variables that are correlated with the likelihood of a claim. For example, in auto insurance, factors like the driver's age, driving experience, location, and vehicle type are considered. In health insurance, factors such as age, pre-existing conditions, and lifestyle choices may affect the risk assessment. These risk factors are analyzed to determine the appropriate premium to charge.
4. Inspections and Surveys: For certain types of insurance, such as property insurance or business insurance, insurers may conduct inspections or surveys. They assess the condition of the property or business operations to evaluate potential risks. Inspectors may examine safety measures, maintenance practices, security systems, or other relevant aspects to determine the insurability and risk level.
5. Credit History and Financial Stability: Insurers often consider an applicant's credit history and financial stability as they can indicate the likelihood of filing a claim. A good credit history and financial stability may be seen as an indicator of responsible behavior, leading to lower premiums or better terms.
6. External Data Sources: Insurance companies may also refer to external data sources to assess risk. These sources can include government records, industry databases, weather data, crime statistics, and more. Incorporating external data helps insurers gain a broader perspective on risks associated with certain locations, events, or industries.

By assessing risk factors and utilizing these methods, insurance companies estimate the potential costs associated with providing coverage. They use this information to determine the appropriate premiums, policy terms, and coverage limits for individual applicants or policyholders.

There's a lot to consider when arranging insurance for your business, so it's a good idea to use a qualified insurance broker.  Westralian Insurance can help so give us a call today on (08) 9302 1388, or visit www.westralianinsurance.com.au

 

Do you have to use an insurance broker?

No you can engage directly with an insurer in order to purchase an insurance policy if you wish. Although you then lose the benefit of having a broker handle your insurance and deal with the insurer on your behalf.

Insurance brokers also manage any claims you have, from start to finish and ensure the process remains as stress-free as possible.  Insurance brokers are there to act on your behalf, so you can get on with running your business.

Westralian Insurance is a general insurance broker, with an enthusiastic and passionate team, all fully qualified and with a broad range of knowledge and experience.

Westralian Insurance is here to help.  Call (08) 9302 1388 today, or visit www.westralianinsurance.com.au

Is it better to use a broker for insurance?

Using a broker is a great idea when it comes to insurance, in the same way using a lawyer is a great idea for any legal matters.  Insurance brokers are experts in insurance and they can provide tailor-made insurance solutions for your business or assets.  Brokers can also advocate on your behalf in the event of a claim.

If you're considering using an insurance broker for your business insurance, call the friendly, fully qualified team at Westralian Insurance.  

Call (08) 9302 1388, or visit www.westralianinsurance.com.au

 

What happens if you don’t have business insurance?

If you don’t have business insurance, you are putting your business and your livelihood at serious risk.  Business insurance provides you with comfort in the knowledge that you have protection in the event of fires, storms, burglaries and many other potential risks.  Without it, you are trading without a safety net and effectively electing to 'self-insure'.  This means your own money and assets are on the line in the event of a loss involving the business.  Without adequate resources to cover such a loss, you may end up having to close the business.

For professional insurance advice and an obligation free quote for your business, call the fully qualified staff at Westralian Insurance, on (08) 9302 1388, or visit www.westralianinsurance.com.au

Do I need insurance for an online store?

Whilst an online store doesn’t have a physical premise to insure, there are still other types of insurance to consider.  Public and products liability is still required for the products being sold online.  Stock insurance still applies if stock is kept at a warehouse or residential premises ready for delivery to customers.  Workers compensation is still a legal requirement for any business with employees, regardless of whether they operate from a physical location or online.

If you're managing an online store, it's important you're fully protected, with an integrated business insurance solution.

For the right advice, call the friendly professionals at Westralian Insurance today, on (08) 9302 1388, or visit www.westralianinsurance.com.au

What is small business insurance?

Small business insurance normally relates to Business Package insurance policies. These policies are a good way to cover off many of the risks facing small businesses, without having to set up separate cover for each item.  

These policies can include Public Liability, stock, contents, theft, glass, machinery breakdown, money and Business Interruption amongst others.  Costs vary depending on the covers required and the size of the sums insured under each section.

Now more than ever, it's time to ensure your business is fully insured.  The team at Westralian Insurance are fully qualified, and will take the time to understand your business and individual risks, resulting in a fully integrated insurance solution.

Call Westralian Insurance today, on (08) 9302 1388, or visit www.westralianinsurance.com.au

What insurance do tradies need?

Tradies need Public Liability insurance, in order to cover claims for third party property damage and personal injury.  Some Public Liability policies can also be extended to provide Australia-wide cover for Tools of Trade.  Workers Compensation is a legal requirement for any tradies with employees or subcontractors.  

Some tradies may also need Builders Warranty if they work on residential construction projects valued at $20,000 or more.  Work vehicles, utes, plant and equipment can also be included on certain policies for tradies, or insured separately.

If you're a tradie and have insurance questions which need answering, we can help!  We'll take the time to review your business requirements, explain the different types of insurance available, and ensure you're fully covered, so you can get on with running your business.

Call our locally owned and operated office today, on (08) 9302 1388, or visit www.westralianinsurance.com.au

 

Do I need insurance for my business?

If your business employs anyone, then Workers Compensation insurance is a legal requirement.  This covers replacement wages and medical expenses for an injured worker, in the event of a work-related injury or illness. 

Public Liability is also very important for businesses in order to cover claims for third party property damage or personal injury.  An injury or property damage allegation by a third party could be disastrous for a business that’s trading without Public Liability insurance. 

The physical assets of the business should also be insured under a Business Package policy which can cover contents, stock, theft, glass, machinery breakdown and business interruption amongst others.

Westralian Insurance is here to help, with fully qualified, professional and friendly staff, alongside a vast knowledge of the West Australian market.

Call Westralian Insurance today on (08) 9302 1388, or visit www.westralianinsurance.com.au

Do I need insurance when building a house?

It’s a good idea to consider Owner Builders insurance when building a new house. Owner Builders Insurance includes cover for the entire construction period, including the tools and materials on site, plus Public Liability for third party property damage and personal injury claims. Workers Compensation cover for the contractors working on site is also a legal requirement.

You've got more than enough to think about when building a house!  So when it comes to insurance cover, call the friendly professionals at Westralian Insurance.  We'll review your individual building project and design an integrated insurance solution to suit your needs.

Call (08) 9302 1388 today, or visit www.westralianinsurance.com.au

  

What insurance do I need as a sole trader?

The type of insurance you will require as a sole trader will vary, and depend on your occupation.  For example, are you a mobile tradesman, a salesperson or do you own a business premise?  Are you a property owner, importer/exporter or a professional providing specialist advice?  The list of potential insurance policies you may require, based on your individual circumstances, is exhaustive.  It is best that you speak with an expert insurance broker to ascertain which policies you should consider, when protecting yourself and your business. 

 

Westralian Insurance would love to help!  Call one of our professional and friendly, full qualified insurance brokers on (08) 9302 1388 or visit www.westralianinsurance.com.au today!

 

What are the types of business insurance?

There are many types of business insurance, and most can be included on a 'business package' policy, in order to reduce cost and increase efficiency.  Some of the many types of business insurance include contents, buildings, stock, machinery breakdown, theft, glass, public liability and professional indemnity amongst others.

When deciding what's right for your business, it's best to speak with a fully qualified insurance broker.  Call the friendly, local professionals at Westralian Insurance today, on (08) 9302 1388 or visit www.westralianinsurance.com.au

What is Business Interruption insurance?

Business interruption cover is designed to replace the income of a business in the event of a loss that renders them unable to trade.  It can be calculated on the turnover or gross profit of the business and it is usually triggered by a material damage claim such as a fire or storm, which prevents the business from trading temporarily.  The property damage claim is covered separately and the business interruption cover is usually engaged afterwards in order to replace the income caused by the interruption in normal trade.

If you have business insurance questions or need insurance, Westralian Insurance can help.  Our professional and friendly staff are full qualified and here to help.  Call (08) 9302 1388 or visit www.westralianinsurance.com.au

Persistence and perseverance eventually pay off in a real battle of a claim.

A couple of years ago, a long-term client who was a truck driver, took out a Personal Accident and Illness policy with Westralian Insurance.

What happened

Early one night at home, he fell down his stairs and injured his leg.  At the time, he didn’t think he had done anything serious.  The pain was extreme, however he assumed he just had a minor injury. 

He had dinner and a beer, but with the pain becoming increasingly worse, his wife decided to drive him to the Emergency Department of his local hospital. 

Shortly after, scans revealed that he had in fact broken his leg and would need at least three months off work to recover.

On admission to the hospital, the doctor had noted he could smell alcohol on our client’s breath, so the Personal Accident insurer immediately declined the claim.   We argued that alcohol was consumed AFTER the accident and the hospital had never undertaken a blood test or breathalyser to prove he was intoxicated.

The insurer once again declined the claim.

We then had the matter referred to the insurers Internal Disputes Facility and their management also declined the claim.

The outcome

Not happy with this decision, we involved AFCA (Australian Financial Complaints Authority) who in turned agreed with us and forced the insurer to pay the claim.

The client was extremely happy that he had an insurance broker on his side, armed with knowledge and the facts, in order to push the claim decline further and further, until all options had been exhausted.

The insurer agreed to pay out the claim and we are happy to report that our client has made a full recovery and is back working again.

This true story is another demonstration of our commitment to our clients, and an example of why you should engage a professional insurance broker.

Call Westralian Insurance today on (08) 9302 1388, or visit www.westralianinsurance.com.au 

 Are you looking to diversify within your business?

Whilst we are all going through this period of economic uncertainty, many businesses will be looking to diversify, in order to maximise their ability to generate a profit.  Diversification is a great way of adding an alternative revenue stream and could, in some cases, mean the difference between the business’s success and failure. 

However, changing the direction in which the business is going or modifying the way the business operates, is not without its pitfalls.  From an insurance point of view, you could fall into the trap of becoming uninsured if your new operating structure hasn’t been approved by your insurer.  This is where an insurance broker can be invaluable.

An insurance broker can offer advice on updating your policies to accurately reflect the new business model and avoid the dangers associated with non-disclosure. They can deal with the insurer on your behalf and make sure your insurance policies cover everything you need them to, taking into account all changes to the structure of the business.

For more information and friendly, professional advice, call Westralian Insurance, on (08) 9302 1388, or visit www.westralianinsurance.com.au

Do I need cyber insurance?

Any business today should consider cyber insurance, as it is an increasingly large risk.  If your business has a website, emails or electronic records, you’re vulnerable to cyber hacks or social engineering attacks. 

A cyber attack can cost you money, threaten your intellectual property and put your customers’ personal information at risk, which can cause untold damage to your reputation.

For more information on cyber insurance and whether it's right for your business, call the friendly professionals today.  Westralian Insurance is a locally owned and operated business who pride themselves on finding the right insurance solution for your business.

Call (08) 9302 1388 or visit www.westralianinsurance.com.au

Is my business underinsured?

Underinsurance is a concern for businesses as well as homeowners.  The results of underinsurance can be catastrophic for a business who makes a claim for property damage or business interruption.  Some insurers apply an 'average' or 'co-insurance' clause on their policies, which means if you insure for less than the full value of the property (or less than your full annual turnover or gross profit in the case of business interruption claims), a claim can be reduced in proportion to the amount of the underinsurance. 

Consequently, an underinsured business can be left with a fraction of the true claim cost in the event of a loss. The best way to avoid underinsurance is to get a survey of your building or appraisal of your goods by a professional, who will advise you of the correct value to insure for.  An accountant can offer the same service for your turnover and gross profit figures, in order to avoid underinsuring for business interruption.

If you've got questions about underinsurance, Westralian Insurance can help!  Call our friendly and knowledgeable staff today, on (08) 9302 1388 or visit www.westralianinsurance.com.au

Business insurance for photographers?

Public Liability insurance is a good idea as it protects you against claims for third party property damage or personal injury.  A General Property policy can also provide Australia-wide cover for your camera and photographic equipment.

For more information on protecting your business and equipment, call the friendly professionals at Westralian Insurance today!  Call (08) 9302 1388 or visit www.westralianinsurance.com.au 

Business insurance for tour operators?

Tour operators come into contact with the public frequently, so public liability is the most important insurance policy to consider.  Motor insurance for the tour vehicle and event cancellation insurance are also common in this industry.

To chat with a fully qualified, professional insurance broker about your business insurance requirements, call Westralian Insurance today, or visit www.westralianinsurance.com.au

How much is insurance for a business?

Insurance costs for businesses vary, depending on the type of business being conducted.  High-risk activities like roofing and scaffolding have much higher public liability and workers compensation rates, than lower risk activities such as accounting and insurance broking.

Westralian Insurance can answer all of your questions, provide an obligation free quote and a complete insurance solution which encompasses all of your business insurance requirements.

Call the friendly professionals today on (08) 9302 1388 or visit www.westralianinsurance.com.au

Do I need insurance for my photography business?

Public Liability insurance is a good idea as it protects you against claims for third party property damage or personal injury.  A General Property policy can also provide Australia-wide cover for your camera and photographic equipment.

Protect your livelihood with a complete, business solution from Westralian Insurance.  Call the friendly, fully qualified team today on (08) 9302 1388, or visit www.westralianinsurance.com.au