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When running a small business, insurance is one of those things that you ignore at your own peril.<\/p>\n
Yes, it might cut into your bottom line, but the right business insurance policy (or policies) can help safeguard your assets, make sure your employees are looked after, and prevent things from grinding to a halt if adversity strikes.<\/p>\n
There are several types of business insurance, each serving a specific purpose. Some, like workers’ compensation, are compulsory for all Australian businesses with employees. Others are necessary only for companies in certain industries.<\/p>\n
No matter which type of business you have, chances are there’s an insurance policy that you might benefit from.<\/p>\n
Business insurance is all about managing risk. Like other forms of insurance, an insurance provider will offer you some protection from financial loss in exchange for a fee.<\/p>\n
Why might you need it? Well, plenty of things can go wrong while running a business, from slip-and-fall accidents to lost or broken inventory and even negative publicity. If lost income results or someone brings a legal claim against you, it could put you at risk of going under.<\/p>\n
Whether you’re a sole trader, a small business owner, or a manager of a medium-sized enterprise, below are some of the main types of business insurance policies you might need.<\/p>\n
No business is immune to the occasional accident or mishap. But if a third party (such as a supplier, customer or member of the public) is involved, you could find yourself on the hook for serious damages. Public liability insurance is designed to cover these costs so your business\u2019 usual operations aren\u2019t totally disrupted.<\/p>\n
Generally, public liability insurance will cover:<\/p>\n
\u25cf Legal liability to a third party in case of injury or death, whether it occurs at your business premises or as a result of your product
\u25cf Legal costs and expenses incurred if a claim is made against you
\u25cf Any loss or damage to a third party
\u25cf Legal liability for a third party\u2019s property that\u2019s in your control<\/p>\n
If you\u2019re providing professional advice, your clients probably expect you to have a certain level of knowledge and expertise. But mistakes can happen no matter how skilled you are, and if your advice causes your client injury, damage or financial loss, you could face legal action.<\/p>\n
Here\u2019s where professional indemnity insurance can come in handy. Not to be confused with public liability insurance, this type of insurance is specific to claims relating to bad advice or mistakes made when delivering professional services.<\/p>\n
If you\u2019re an accountant, financial adviser, IT specialist, nutritionist, or personal trainer, this insurance is probably worth considering.<\/p>\n
Chances are you\u2019re already familiar with workers\u2019 compensation insurance \u2014 it\u2019s compulsory insurance for most employers in Australia, after all \u2014 but for those needing a refresher, this type of business insurance helps cover payments to your employees if they suffer a work-related illness or personal injury.<\/p>\n
Workers’ compensation can include:<\/p>\n
\u25cf Medical expenses (for example, following diagnosis of a life-threatening illness)
\u25cf Rehabilitation costs following bodily injury
\u25cf Compensation for any lost income while your employee recovers
\u25cf Lump sum payments in the event of permanent impairment
\u25cf Funeral expenses and payments to family members in the event of your employee’s death
\u25cf Education or training assistance payments
\u25cf Property damage claims.<\/p>\n
Your business property is where all the action happens, but have you considered whether your usual activity could continue if something happened to the premises? Commercial property insurance can help protect against property damage, theft, and loss so you can get things back up and running.<\/p>\n
Depending on the insurance company, the level of coverage, and the nature of the damage that occurs, commercial property insurance can:<\/p>\n
\u25cf Replace damaged business assets with similar items
\u25cf Issue payment for lost business assets
\u25cf Cover costs of rebuilding or repairing the commercial property.<\/p>\n
Whether it\u2019s a fleet of trucks, a single trusty ute, or a mobile dog grooming van with cute puppy decals, many business owners rely on commercial vehicles to get around and get things done. And like any other vehicle on the road, these must be insured.<\/p>\n
Commercial auto insurance is a specific type of business insurance that factors in the greater risk these vehicles face, given you likely spend more time on the road with people or goods on board than other vehicles.<\/p>\n
Just make sure you discuss your specific situation with your insurance broker. It might be more sensible to take out a car insurance policy for your private vehicle with provisions for business use tacked on.<\/p>\n
Business continuation insurance, often known as business interruption insurance, kicks in when your business has to pause operations because of fire, theft, or other insurable event. Having this type of insurance in your pocket means you can continue paying salaries and rent and make up for any lost revenue.<\/p>\n
It might also include:<\/p>\n
\u25cf Payment for other operating expenses, such as utility bills
\u25cf Assistance with taxes and loan repayments
\u25cf Training costs to help your staff learn to operate replacement machinery
\u25cf Relocation costs if your business has to pack up and move elsewhere.<\/p>\n
As a business owner, the challenges never stop. High borrowing costs, unreliable supply chains, and general economic instability are already testing Australian businesses, and a single mishap could be all it takes to send things veering off track.<\/p>\n