The true cost of cheap insurance

With some things you can’t afford to sacrifice on quality for the sake of a few dollars. Car brakes, parachutes… and insurance. Consider, what is the true cost of a cheap insurance product for your practice, if the policy comes up short when you really need it, in the event of a claim.

When taking out insurance, you also need to consider:

Will I receive the full payout for damages?

It isn’t enough just to have insurance, you need to have the right insurance. Guild Insurance provides full Replacement Cost cover, which means we fully replace your building and contents.

Other insurance policies provide cover limited to a pre-determined value, the ‘sums insured’ or ‘limit of liability’, for building and contents. While every effort can be made to determine your ‘sums insured’ and set ‘limits’ correctly, rising building costs and other factors often cause the value of your practice to increase. Limiting your insurance cover to a set figure can therefore leave you at risk of underinsurance.

It is our experience that underinsurance is often an issue in major incidents and can expose businesses to out-of-pocket expenses for hundreds of thousands of dollars.

Additionally, other insurance policies often contain ‘underinsurance’ or average’ provisions, which mean that even with partial damage to your practice, the insurer can assess the total value of your practice and if they find that you are underinsured, can reduce your final payout. Guild on the other hand will always pay you out to the replacement cost of the damages.

Could I afford to pay the gap?

Consider the case of a NSW business owner who, only three months after switching to Guild Insurance from a competitor, had his premises completely destroyed in a fire. His previous ‘sums insured’ for building and contents was $737,000 but the costs for rebuilding, restocking and refitting rose to $1.351 million.

If he hadn’t made the switch to Guild he would have been forced to pay the gap of more than $614,000 between the ‘sums insured’ and the true cost of replacement. With Guild’s full Replacement Cost cover, he was covered for all the additional costs.

You never want to have to pull the emergency cord on your parachute, but you want to know that your cord would work if you had to use it. Have insurance that you can rely on for support and that pays full replacement in the event of damage.

To learn how full Replacement Cost cover can help your practice, contact Guild Insurance.

Breaking down the risks of equipment breakdown

The rapid rate of progress of ophthalmic equipment technology has been astounding. A decade ago, who would have considered there would be autofocus, autotracking equipment capturing images directly onto your practice network and sorting by patient name?

Read more: Breaking down the risks of equipment breakdown

Counting the costs of burglary

Burglary is one of the most pervasive crime problems in Australia. Statistics show that in Australia someone is burgled just about every minute¹ and commercial businesses bear a greater burden of this risk than households².

Optometric practices are no exception to this rule. Optometric practices will always be at risk of burglary because of the nature of the products they hold and practices with a large number of sunglasses, in particular are likely to be targeted.

It is estimated that crime costs Australian businesses almost $800 million a year². What can you do to ensure you have sufficient insurance cover in the event of burglary to protect the financial position of your business?

The first step is to assess the value your practice contents on a regular basis, at least annually, to ensure that you have the right amount of insurance cover for your practice. Guild Insurance recently experienced cases where optometry practices in an area were ‘cleaned out’ by burglars, only for the owners to find out that they were underinsured – they didn’t have sufficient cover for the amount of contents stolen. Guild’s local representatives advised its client base to raise their amount of burglary cover and avoid having to pay any underinsurance gap in the event of a burglary.

If you have any concerns, a Guild representative experienced in insuring optometric practices can help you review your levels of cover and avoid underinsurance.

There are other issues to consider in relation to burglary insurance, beyond cover for practice contents. Guild has highlighted the top five issues.

Top 5 Burglary Insurance Issues

1. Temporary security costs
Your security was breached and your practice has been damaged, putting you at further risk in the short term. Guild provides cover for temporary security arrangements to secure your practice again. We also provide cover for the costs of repairing your security system if it has been damaged.

2. Stolen keys or combinations
Guild provides cover for the cost of recoding or replacing locks if your keys or combinations are stolen.

3. Patients’ property
Not only were contents stolen but also the property of patients, for which you are liable.

4. Clean up, repair and temporary closure
The burglars used a common method of break-in: a ram-raid. This caused significant damage to the practice and glass breakage, causing the practice to close for a few days. Guild provides cover for damage to practice premises incurred through burglary, including removal of building debris; for glass; and for business interruption, which covers your lost business income from missed trading days.

5. Employees’ personal items
During the burglary several items belonging to employees were stolen. Under Guild’s policy your employees will receive up to $500 cover each.
In the event of a burglary, you want to know that your insurance protects your practice against unexpected expenses and that your insurer can give you the right service in the distressing time following a break-in.

Contact Guild Insurance if you want more information on our insurance cover for optometry practices in the event of burglary.

1. Survey of Australian households by Wolcott Research.
2. Mayhew P. Counting the costs of crime in Australia. Australian Institute of Criminology, April 2003.

Prevention is better than treatment

The best option is always to prevent burglary from occurring. Protecting the perimeter of your practice is the key to burglary prevention. Good security starts outside and the more difficult you make it to gain access, the less likely your practice will be broken into.

Practice owners should ask themselves the following questions when considering whether their practice is set up to deter burglars.

• Do I have deadlocks or good quality locks on all doors?
• Do I have keyed window locks installed on windows that could be opened?
• Are windows constructed of reinforced safety glass?
• Are the premises well lit with external lighting after hours?
• Is my practice protected against ram raids?
• Do I know what security protection neighbouring premises have?
• Do I have motion sensors in the roof cavity?
• Do I advertise the security features I have in place, for example, ‘Premises protected by monitored alarm‘ or ‘Premises under video surveillance’
• Do I have glass break sensors?

If your practice is part of a shopping complex, you need to also consider the following questions.
Is the alarm system zoned to allow it to be activated in the practice when the practice is closed?

• Will your security shutters provide effective protection against intrusion?
• Does the shopping complex have after-hours security patrols?

If you answered ‘no’ to one or more of these three questions, your practice is potentially at a higher risk of burglary.

Don’t let your dream purchase go up in flames

What would happen if your new digital retinal camera suddenly stopped working? Problems with equipment such as mechanical failures are not uncommon. While 72 per cent of small- to medium-size business owners have heard of equipment breakdown insurance only 21 per cent have it.¹

Read more: Don’t let your dream purchase go up in flames

The fast road to recovery

Severe weather incidents have wreaked havoc across Australia already this year. Hail the size of golf balls, tropical cyclones and storm water have caused significant damage to those in affected areas. It provides a timely reminder of how adverse events can affect anyone and the need for the right support to recover.

Read more: The fast road to recovery