"Reviewing your insurance regularly is important for any small business owner"
This article was produced in partnership with BizCover
As a mortgage broker, your business model isn’t set in stone. Whether you're expanding your services, hiring staff or introducing new digital tools, these changes can affect the types of risks you face. But does your insurance still offer adequate cover to meet these business changes?
Brad Miller, general manager at BizCover, explains why making sure your insurance policies still match your business needs is an important consideration for finance professionals.
Aligning your insurance with your current business model
“Reviewing your insurance regularly is important for any small business owner,” says Miller. “A policy that was suitable one or two years ago may no longer offer the cover you need if your business has grown or changed.
“Mortgage brokers could be leaving themselves open to risks if they don’t take the time to regularly review their insurance policies.”
Map your current activities and risks
Begin by taking stock of what your broking business looks like currently. Asking yourself these questions may help as a starting point:
- Have you recently expanded your range of service offerings?
- Are you working solo or have you taken on new staff?
- Do you often meet clients in person, operate fully remotely, or use a hybrid model?
- Do you use a cloud-based system to handle customer and financial data?
- Have your client volumes increased significantly in the past year?
“Assessing how the business has changed can help pinpoint what risks you may be facing. This should help you better understand what kind of insurance policies you may want to consider,” says Miller.
For example, if you store your client data online then this could potentially leave you vulnerable to cyberattacks; while hiring new staff (whether part- or full-time or as a subcontractor), may open you up to possible employment related claims.
Review your insurance policies
It’s usually not enough to simply hold an insurance policy. You also need to make sure the details are accurate and up to date.
Review the sum insured as well as the policy inclusions, exclusions and claim limits. Do these still fit your current needs? If you had to make a claim, can you be certain that your assets are not underinsured?
“For most small business owners, business changes don’t happen overnight,” says Miller. “They happen incrementally, over months or years. And this is where someone could find themselves suddenly without the appropriate level of cover, simply because they didn’t look at how their business has evolved and what new risks they might be facing.”
Common insurance policies taken out by mortgage brokers
Once you’ve assessed your risks, the next step is understanding which types of insurance could help you manage them. Below are some of the most commonly held insurance policies for mortgage brokers.
Professional Indemnity insurance
Many different types of consultancy services, including mortgage brokers, opt to take out Professional Indemnity (PI) insurance.
Miller says, “This type of insurance is often considered essential for finance professionals, as it protects against losses claimed by a third party due to alleged or actual negligence in professional services or advice.”
The Mortgage & Finance Association of Australia (MFAA) also require professionals to hold a minimum of $2 million Professional Indemnity insurance with at least 12 months run-off as a condition of membership.
Cyber Liability insurance
Mortgage brokers often deal with the highly sensitive personal and financial information of their clients. This kind of data can be a tempting target for cybercriminals.
Cyber Liability insurance is designed to help protect you from claims and support your profitability in the event of a cyber breach or attack. Costs associated with defending a cyber claim are also covered.
“More and more small and medium business owners are looking at Cyber Liability insurance,” says Miller. “It gives brokers the resources and support to respond quickly and recover confidently from a potential cyberattack.”
Business Insurance
A Business Insurance package, also referred to as a BizPack, is a convenient way to bundle multiple insurance policies together and allows you to customise your policies to suit your needs. Finance professionals may find it useful to package different types of insurance together (such as Tax Audit, Business Interruption, Management Liability, Building, and Contents insurance) to provide protection for their business in case the unexpected happens.
BizCover makes insurance for mortgage brokers easy
BizCover understands the needs of mortgage brokers and what it means to run a financial services business. Managing multiple clients, keeping up to date with the latest legislative changes, and continuously keeping an eye on an ever-changing market demand a lot of time and effort. That’s why they've made it easy to quote, review and purchase insurance for mortgage brokers online.
Visit here to compare quotes from selected leading Australian insurers, or call them on 1300 805 821.
This information is general only and does not take into account your objectives, financial situation or needs. It should not be relied upon as advice. As with any insurance, cover will be subject to the terms, conditions and exclusions contained in the policy wording.
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BizCover is an online insurance service that takes the complexity out of business insurance. Their online platform allows small business owners to easily quote and compare insurance policies from leading Australian insurers, with instant cover and no paperwork required.
Trusted by over 260,000 small businesses, BizCover is committed to making business insurance affordable and hassle-free, allowing small business owners to run their business with confidence.
