Business insurance is not an optional expense

While Australia may have escaped the worst of the global financial crisis, that doesn't mean that Australian businesses have escaped economic pressures in the last few years.

In tough times, businesses often need to make tough decisions in the name of cutting expenses.

Faced with flat or declining sales this changes from being a profit boosting initiative to a survival imperative.

In such situations, the temptation may be to scale back the coverage of business insurance policies in order to recover some savings.

Yet this is a mistake - the risks to businesses do not go away during tough economic times, so it doesn't make sense to expose your company to them more just to save money in the short term.

The fact is that if a loss causing event were to happen for which you did not have sufficient cover, the costs to your business could be far worse than the small amount you may be able to retain by cutting back your policy.

The recent extreme weather events experienced across the country are standing testament to the importance of protecting your business from the unexpected.

There are many other ways that businesses can cut back on expenses without exposing themselves to financial risk.

Lower overheads

Perhaps there is a better way that your business can use the space it operates in. That may mean finding a way to sublet part of your property or shifting to a smaller office.

Alternatively, perhaps renegotiating your lease is an option, or indeed moving to a more competitively priced area.

Digitize

Moving to digital rather than paper-based solutions can save money in many areas of business, from marketing and advertising to customer relationship management.

Using third-party hosted software can also help businesses to cut down on IT expenditure and ongoing fees and maintenance.

Maximise your use of staff

Staff can be your best resource - are you using them in a way which capitalises best on their skills and experience?