A new financial year is one of the most natural moments to take stock of where your business stands.
Most Perth business owners use July as a reset, new budgets, new goals, new plans. But there is one item that almost never makes it onto the new financial year checklist, and it is one of the most important.
When did you last properly review your business insurance?
Not renew it. Review it.
If the answer is more than 12 months ago, or if your business has changed in any meaningful way over the past year, the start of a new financial year is the right time to address it. Here is what Perth business owners should be thinking about right now.
Why the New Financial Year Is the Right Time to Review Your Insurance
The beginning of a new financial year creates a natural alignment between your financial position and your insurance obligations. Your accountant has just closed out the previous year. Revenue figures are confirmed. Any structural changes made during the year are documented. New budgets and growth plans are being set.
All of that information is directly relevant to whether your current insurance cover still fits your business.
Insurance is not a set and forget product. It is a living part of your business that needs to keep pace with how your business actually operates. A policy placed two or three years ago may have been perfectly adequate then. Whether it is adequate now depends entirely on what has changed since.
What Changes in Your Business Affect Your Insurance
This is the question most business owners do not think to ask. Here are the most common changes that should trigger an insurance review and frequently do not.
Revenue Growth
If your business has grown significantly in the past year, your sum insured amounts, your business interruption cover, and your public liability limits may all need to be updated to reflect your current scale. Underinsurance at claim time does not just mean a shortfall, in some cases it can trigger the average clause, meaning the insurer pays only a proportion of any claim, not just the difference.
New Staff
Taking on employees changes your workers compensation obligations, your employer liability exposure, and potentially your management liability requirements. In Western Australia, the Workers Compensation and Injury Management Act 2023 tightened obligations significantly. If your team has grown, your cover needs to reflect that.
New or Expanded Contracts
Commercial contracts particularly in construction, mining, and professional services often specify minimum insurance requirements. If you have taken on a major new contract this year, it is worth confirming your current cover meets those contractual obligations before something goes wrong.
New Equipment or Assets
Equipment, vehicles, plant, and stock all need to be correctly valued and scheduled in your policy. If you have acquired significant assets in the past year and your policy has not been updated, you may be insuring at an outdated value.
Business Changes of Restructure
If you have restructured from a sole trader to a company, added a trust, changed directorships, or altered how the business is owned, your insurance obligations change. Who is named in a policy, how claims are paid, and what covers apply to directors versus employees can all shift with a restructure.
New Premises or Locations
Adding a new location, moving premises, or taking on additional storage or warehousing all affect your property and liability cover.
The Most Common Gaps We Find at This Time of Year
After working with business owners across Perth and Western Australia for a number of years, the gaps we find most often at new financial year reviews follow a consistent pattern.
Underinsurance on Commercial Property
Perth’s construction and rebuild costs have increased significantly over the past three years. Many commercial property owners are still insured at 2022 or 2023 valuations. If a property needs to be rebuilt today, the gap between what it costs and what the policy pays can be substantial.
Business interruption cover that has not kept pace with revenue
Business interruption insurance replaces lost income when you cannot trade. If your revenue has grown and your cover has not, you are insuring for a business that is smaller than the one you actually run.
Please keep in mind, if your business revenue increases it is important to increase or at lease review your income protection for the business.
Professional indemnity limits that no longer reflect the scope of work
For accountants, lawyers, IT professionals, consultants, and other professional services businesses, the scale of contracts undertaken often grows faster than PI limits are updated. A limit that was adequate three years ago may be inadequate for the size of client you are now working with.
Workers compensation not reflecting current payroll
WA workers compensation premiums and cover are based on payroll. If your payroll has grown and your declared wages have not been updated, you may be underinsured and exposed to penalties.
What a Proper Insurance Review Looks Like
There is a difference between a broker who processes your renewal and a broker who reviews your insurance. Here is what a genuine review involves.
A real review starts with a conversation about your business — what has changed, what is planned, what new risks have emerged. It looks at every policy in your portfolio, not just the one coming up for renewal. It considers whether the covers you have are still the right ones, whether the limits are still adequate, and whether there are gaps that need to be addressed.
It also looks forward. If you are planning to grow your team, take on new contracts, or expand into new markets in the coming financial year, a good broker will factor that into the advice they give you now rather than waiting until the change has already happened.
At Delmont Insurance Group, this is how we approach every client review. Not as an administrative process, but as a genuine advisory conversation about your business.
Five Questions to Ask Your Broker at Your New Financial Year Review
If you are meeting with your broker in the coming weeks, here are five questions worth raising.
- Have my sum insured amounts kept pace with current rebuild and replacement costs?
- Does my business interruption cover reflect my actual current revenue?
- Are there any new contractual insurance requirements from clients or contracts signed in the past year that I need to meet?
- Has anything changed in my business structure, staffing, or operations that affects my cover?
- Are there any gaps in my current insurance portfolio that I should be aware of?
If your broker cannot give you clear, specific answers to all five, that is worth noting.
A Note on Premium Increases
Many Perth business owners have seen their premiums increase at renewal over the past two to three years. The reasons are genuine, insurer losses from natural disasters, rising replacement costs, tightening reinsurance markets, and increased litigation have all contributed to upward pressure on premiums across most commercial insurance lines.
If your premium has increased significantly, the right question to ask is not simply how to reduce it. The right question is whether the increase reflects genuine market conditions or whether your risk profile has changed in a way that can be managed.
A good broker will shop the market on your behalf, identify whether better terms are available elsewhere, and advise you on the right way to manage your premium without compromising your protection. The wrong approach is to reduce cover to reduce premium without fully understanding what you are giving up.
Ready to Review Your Insurance for the New Financial Year?
If you are a Perth or WA business owner who has not had a proper insurance review in the past 12 months, the start of a new financial year is the right time to have that conversation.
At Delmont Insurance, our team works with business owners across Perth and Australia to make sure their insurance reflects their actual business, not the one they were running 12 months ago.
There is no obligation and no pressure. Just a straightforward conversation about your business and whether your current cover is fit for purpose.
(08) 6184 8724
https://delmontinsurance.com.au
info@delmontinsurance.com.au
Frequently Asked Questions
Why should I review my business insurance at the start of the new financial year?
The new financial year is a natural reset point where your revenue, staffing, contracts, and business structure are all freshly documented. It is the ideal moment to confirm your insurance reflects your current business rather than the one you were running 12 months ago.
What happens if my business has grown but my insurance has not kept pace?
If your business has grown and your insurance has not been updated, you may be significantly underinsured. In some policy types this triggers the average clause, meaning the insurer pays only a proportion of any claim rather than the full amount. The gap between what you think you are covered for and what the insurer actually pays can be substantial.
How do I know if my sum insured amounts are still adequate?
The simplest test is to ask your broker to confirm whether your sum insured amounts reflect current replacement and rebuild costs. Perth construction and asset replacement costs have increased significantly since 2022 and many businesses have not updated their insured values to keep pace.
Can I reduce my insurance premium without compromising my cover?
In some cases yes. A broker who knows the market can identify whether better terms are available from alternative insurers, or whether there are elements of your cover that can be structured differently without material impact on your protection. The key is making any changes consciously and with full understanding of what you are giving up.
What is the average clause and how does it affect my claim?
The average clause applies when a property or asset is insured for less than its actual replacement value. If you are insured for 70 percent of the replacement cost, the insurer can reduce any claim payment proportionally meaning even a partial loss is only partially covered. This is one of the most significant and least understood risks in commercial property insurance.
How long does an insurance review take?
A thorough review is typically a 20 to 30 minute conversation followed by a written summary of findings and recommendations. It does not need to be a complex or time-consuming process. The value is in having someone who knows your business look at your cover with fresh eyes.