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Commonly referred to as a PDS, the Product Disclosure Statement is a very important document relating to your insurance.
The PDS outlines what your business insurance policy does cover, and to some extent what it doesn’t cover.
You certainly shouldn’t take out a new insurance policy without referring to the PDS, but it’s also important to know a little more about the PDS itself.
When should I be given a PDS?
If you are dealing with an insurance broker, they should provide you with a PDS as soon as they make a product recommendation or provide you with a quote from a specific insurer.
If you are dealing direct when an insurance company they will generally provide you with a copy when you take out the policy.
Copies of the PDS can generally be obtained at whatever stage you prefer however, either by calling and requesting one or by visiting the company’s website.
Am I covered for everything detailed in the PDS?
When it comes to small business insurance the answer will almost always be no.
Insurance companies generally issue a single PDS that covers their full business package.
So for example if you were taking out just public liability insurance, the PDS would cover the full business package and not just the public liability.
You might read in the PDS that you are covered for theft, business interruption and property damage, but unless they are listed on your actual policy certificate they will not be covered.
Do I have to read the whole thing?
The best advice would be to read the entire document from cover to cover so that you get a full understanding of the cover.
But as we outlined above, the entire PDS will generally not be relevant to your cover.
Taking the PDS for one of Australia’s major business insurance providers as an example, the public liability section only makes up 9 of the 100+ pages in the document!
Admittedly there are some general sections of the PDS which should be read, but if you only have public liability there is no need to read all 100+ pages.
However, if you have the time, it can be a good idea to read the full document as you may see other coverage options which could be appropriate for you and your business.
What won’t a PDS tell me?
There is a lot more to an insurance policy than just the PDS.
Often in television and radio ads for insurance you will hear the phrase “read the PDS to decide if the cover is right for you”.
Unfortunately the PDS doesn’t really tell the whole story.
There are so many different scenarios and possibilities when it comes to a business that a PDS just cannot cover every one of them.
A PDS will generally not detail specifically what can and cannot be claimed.
For example if you are a lawn mowing contractor, the PDS will not specifically state whether or not you can claim for glass breakage caused by a flying rock.
Can I rely on a PDS when making a decision?
The intention of the PDS is to make it possible for a client to make a decision on whether or not the insurance is appropriate for them.
Whilst this is quite reasonable for covers such as home and car insurance, it might be a stretch to apply the same thinking to business insurance.
Business insurance can be very complex, and whilst plenty of business owners do take the do-it-yourself approach and rely on the PDS, it might not always be the best option.
The Product Disclosure Statement is a very important document, but to get the most out of it we recommend combining it with a good insurance broker.
Using an insurance broker doesn’t mean you don’t have to read the PDS, but it does mean you’ll have additional support and expertise on your side.
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