Most business owners approach buying insurance the same way they approach buying fuel. Find the cheapest option, fill up, and move on. It is understandable. Premiums are a cost, budgets are tight, and insurance is not exactly the most exciting line item on a business expense sheet.
But this approach is one of the most common and costly mistakes we see business owners make. Because insurance is not a commodity. Two policies can look almost identical on paper and perform completely differently when you actually need to make a claim.
So, what should you actually be considering when buying business insurance? Here is the honest answer from the team at Delmont Insurance Group.
Does the Cover Actually Match Your Risk?
This is the first and most important question, and it is the one most business owners never ask.
Every business carries a unique set of risks. A concreting contractor in the northern suburbs has different exposures to a management consultant in the CBD. A labour hire company supplying workers to a WA mining site has completely different obligations to a physiotherapy practice in Subiaco. A one-size-fits-all policy cannot adequately cover all of them.
A good commercial insurance broker takes the time to understand your specific operation before recommending anything. That means understanding what you do, how you do it, who you work with, what contracts you hold, what assets you own, and what could realistically go wrong. Cover is then tailored to your actual exposure, not just matched to a generic product category.
When cover is not tailored, the gaps are often invisible until a claim happens. By then it is too late.
Price Is the Wrong Starting Point
We work with business owners across Perth every day who have made purchasing decisions based almost entirely on premium. And while we completely understand the instinct to manage costs, leading with price creates a serious problem.
Cheaper premiums almost always come from one of three places: higher excess amounts, narrower policy coverage, or exclusions buried in the fine print that only surface at claim time. Budget insurers keep premiums low by tightening policy wordings and making the claims process as difficult as possible. A quality insurer, placed correctly by a broker who knows the market, will have stronger policy terms, better claims support, and actually pay out when you need them to.
We have seen two businesses with seemingly similar policies receive completely different outcomes at claim time. Same type of incident. One received a full settlement. One received nothing. The difference was the quality of the insurer and how the policy had been structured.
Price matters. But it should be the last consideration, not the first.
The Smart Way to Manage Your Premium
If budget genuinely is a concern, there are intelligent ways to bring your premium down without leaving your business dangerously exposed. But the approach matters enormously.
The right way to reduce your premium is to consciously adjust or reduce certain covers with full understanding of what you are giving up. Perhaps you increase your excess to reduce the annual premium. Perhaps you remove a cover that is genuinely not relevant to your current operation. These are informed decisions made with complete clarity about the trade-off.
The wrong way is to let an insurer quietly strip out your policy wording to produce a cheaper renewal figure, leaving you believing you are fully covered when you are not. This happens more than most business owners realise, and it is exactly the kind of situation a good broker exists to prevent.
Before you sign off on any renewal, ask two questions. Does this policy actually match what my business does today? And if the premium has come down, what has been removed to get it there? If you cannot get a clear, specific answer to both questions, that is a conversation worth having before you proceed.
5 Things Business Owners Get Wrong When Buying Insurance
- Renewing without reviewing. Rolling over last year’s policy without checking whether it still reflects your business is one of the most common mistakes we see. Your business changes every year. Revenue grows, staff numbers shift, equipment is added, contracts change. Your insurance needs to keep pace.
- Comparing policies on premium alone. As covered above, two policies at different price points are almost never the same product. Comparing on price without comparing on coverage is not a comparison at all.
- Assuming all insurers pay claims the same way. They do not. Insurer quality varies significantly. Claims handling, response times, policy interpretation, and willingness to pay all differ materially between insurers. Your broker should know which insurers perform well and which do not.
- Not disclosing changes to the business. Failing to notify your insurer of material changes to your business, such as new revenue streams, additional premises, or changes in the type of work you do, can void your cover entirely. This is a legal obligation, not just a formality.
- Treating insurance as a tick-box exercise. Insurance bought without genuine understanding of what it covers is not protection. It is false confidence. Taking the time to understand your policy, even at a high level, is one of the most valuable things a business owner can do.
Which Business Owners Should Consider Using a Broker?
The honest answer is most of them. But particularly:
Business owners operating in industries with specific or complex insurance requirements, such as construction, labour hire, mining services, NDIS, and professional services, where standard retail products often fall short of what is contractually required or practically necessary.
Business owners whose revenue, assets, or team have grown significantly in the past two years and whose insurance has not been properly reviewed in that time.
Business owners who hold commercial contracts that specify minimum insurance requirements. If you cannot demonstrate the right cover, you cannot do the work.
Business owners who have never had someone sit down with them and explain what their policy actually covers and what it does not.
If you are buying direct and you have never had that conversation, it is worth having.
How Do I Know If My Broker Is Doing a Good Job?
This is a question more business owners should ask. A good broker does more than process your renewal once a year. Here is what the relationship should actually look like.
Your broker should proactively contact you before renewal, not just send a renewal notice and wait. They should ask whether anything has changed in your business and recommend adjustments accordingly.
Your broker should be able to explain your policy in plain language, specifically what is covered, what is excluded, and what your excess is across each section.
Your broker should be accessible. When you have a question, a concern, or an incident, you should be able to speak to someone who knows your business, not navigate a call centre.
Your broker should advocate for you at claim time, not leave you to manage the process alone.
If your current broker is not doing these things, it may be time for a second opinion.
Why Has My Insurance Gone Up?
This is one of the most common questions we receive from business owners across Perth and WA, particularly over the past two to three years. The honest answer involves several factors.
Insurers across Australia have experienced significant losses in recent years driven by natural disasters, increasing litigation, rising construction costs, and global reinsurance pressures. Those losses flow through to premium increases across the market, often regardless of your individual claims history.
In Western Australia specifically, commercial property premiums have been affected by rising rebuild costs. The cost of construction materials and labour has increased substantially since 2021, and many properties are now significantly underinsured relative to their actual replacement value.
Workers compensation premiums in WA have also been affected by the tightened obligations under the Workers Compensation and Injury Management Act 2023, which increased medical limits and tightened employer response timelines.
If your premium has increased significantly, the first question to ask is whether the increase reflects genuine market conditions or whether your policy has been over-priced relative to your actual risk profile. A broker who actively manages your renewal will shop the market on your behalf and negotiate where possible, rather than simply accepting the renewal figure presented by your current insurer.
The Delmont Approach
At Delmont Insurance Group, our team works with business owners across Perth and Western Australia to make sure their insurance actually does what it is supposed to do. That means tailoring cover to your specific risks, managing your renewals proactively, being transparent about what your policy covers and what it does not, and being in your corner when you need to make a claim.
We are not in the business of selling the cheapest policy. We are in the business of making sure the right policy is in place for your business, at a price that makes sense.
If you have questions about your current cover or would like a fresh set of eyes on your renewal, our team is happy to have that conversation.
(08) 6184 8724
https://delmontinsurance.com.au
info@delmontinsurance.com.au
Perth, Western Australia
Frequently Asked Questions
What should I consider when buying business insurance?
The most important considerations are whether the cover matches your specific business risks, the quality of the insurer, what is excluded from the policy, and what the claims process looks like in practice. Price should be the last consideration, not the first.
Why should I use an insurance broker instead of going direct?
A broker works for you, not the insurer. They access a wide range of products, tailor cover to your specific risks, and advocate on your behalf at claim time. Going direct means dealing with one insurer’s products on their terms.
How do I know if my business insurance is adequate?
Ask your broker to walk you through exactly what is covered and what is excluded. If you cannot get a clear answer, or if your policy has not been properly reviewed in the past 12 months, it is worth seeking a second opinion.
Why has my business insurance premium gone up?
Premium increases are being driven by insurer losses from natural disasters, rising construction and rebuilding costs, litigation trends, and global reinsurance pressures. A good broker will shop the market on your behalf at renewal rather than simply accepting the increase.
What is the difference between a cheap and an expensive insurance policy?
Cheaper policies almost always involve higher excesses, narrower coverage, or exclusions that only surface at claim time. The premium difference between a quality policy and a budget policy is often far less than the difference in what gets paid out when something goes wrong.