Making Business Expenses Easy

How do you position business expenses?

What is key here is to dispel the myths around business expenses cover and to provide advisers with the motivation to start the conversations with confidence. One presentation we like opens with a real life case where an adviser had thought they’d provided holistic advice to their client only to find they were significantly exposed to financial risks.

At this point in the presentation advisers are asked to think of, write down and make a list of the key clients they needed to have the business expenses conversation with. Following this advisers are walked through a project plan to think through how they could start simply positioning business expenses discussions not only with clients but with their referral sources.

Business Expenses cover could almost be called the ‘forgotten cover’ with less than 4% of customers with income protection cover having specific business expenses cover in place. Research shows that less than 8% of business owners have this cover in place and whilst this presents as a great opportunity, we find that less than 2/3rds of advisers promote business expenses cover at all. In fact this number may be even lower with a misperception that business expenses cover is too complex either at underwriting or at claims time.

Take an approach of keeping it simple and looking to at least cover the more significant costs – which also should be simple enough to uncover (as well as justify at claim time).

If you think about covering the main items of rent, lease costs, repayments for equipment etc when it comes to claim, these are very easy to show, without the need for complex recalculations each month - they make the financial part of a BEX claim much simpler.

Key questions to clients:

•What are your lease payments?
•What are your loan repayments – and what are they for?
•What is the rent on your premises?
•What wages do you have for administrative staff?

Also appreciate the indemnity nature of business expenses cover – which is about covering the shortfall up to the insured benefit. There shouldn’t be an expectation that the full benefit will always be paid on claim. Much like contents insurance at home, you wouldn’t expect to be paid $60,000 for your contents, if only $3,000 worth was lost in a burglary.