Insurance policies are complex contracts containing a myriad of conditions and exclusions and many insurers use different words, sentences and phrases in their policy wording documentation.
With every household and motor insurance policy purchased comes a booklet called a Product Disclosure Statement (PDS). Whilst all business related insurances have the terms of the contract with the insurer detailed in the Policy Wording document the insurer provides.
Granted, PDS booklets and Policy Wording documents can be a dry old read but your understanding of the insurance cover you have purchased makes them essential reading. That sinking feeling in the pit of stomach is all too real when a claimable event occurs and you find out that the cover you thought you had, you didn’t.
A recent Policy Wording Readership survey of 1006 Australian small businesses (defined as those with less than 20 full-time employees) revealed that:
24% of clients always read the document
11% never read
26% only skimmed
10% rarely read
28% occasionally read
That suggests a whopping 75% of small business owners have no idea or next to no idea about what they are covered for under their business insurance policies. This huge margin of blissful ignorance by the small business sector is likely to be echoed at the domestic insurance level.
As with any contract, all the information is relevant and important, and the best advice would be to read it from cover to cover. Go on, dig it out. Find a nice comfy chair, get yourself a cup of coffee (helps you stay awake) and find out where you stand. Fifteen or 20 minutes with a PDS can save untold heartache further down the track.
Want to check the quality of your insurance cover? It’s all in the PDS or your Policy Wording document.