What is Business Insurance?
Business Insurance provides protection for your business against unexpected events that affect your business premises, contents, stock and other assets. It can also provide protection for your legal liability in the event a customer, supplier or member of the public is injured, or their property is damaged due to your business activities.
There are a number of different cover options available which gives you control over your business insurance, and allows you to tailor a policy to protect against the issues you are most likely to face.
Why is Business Insurance important?
Regardless of the industry you’re in, the size of your business, or the length of time you’ve been in existence, running a business of any kind involves a certain amount of risk on any given day. Business insurance transfers that risk (to the insurer) and protects you against financial loss, which is an important part of being a responsible business owner.
Life is full of surprises – some good, others bad. Unfortunately you can’t predict when an adverse circumstance will affect your business. It could be fire or storm damage; accidental damage; malicious damage; or theft. It could also be legal action taken against you following an injury or damaged property. If a business is uninsured at the time of such events, the resulting costs can often lead to bankruptcy and closure of the business.
Insurance helps you to avoid the economic impact, and reinstate your business to the same position to ensure long term survival after suffering a loss that is covered by the insurance policy.
How much cover do I need?
In choosing the level of cover, you should to consider the following:
- Legal or contractual requirements – for example, do you require a minimum level of Public Liability cover for a contract you are servicing, or for leasing a property?
- How much is your stock, property and premises worth?
- What are the potential risks (what could go wrong) and how much would it cost to get your business running as normal? Hint: think worst case scenario.
- How much could it cost if any action is taken against you? Take into account legal and defence costs, as well as compensation costs.
As your business grows you may need to increase your level of cover as the potential loss, and hence the impact to your business increases.
What cover options are available?
Most businesses require protection against a range of risks to protect their property, assets and finances, which can make choosing the right types of business insurance complicated. To help make it easier, we have outlined the different types of cover that small businesses most commonly need.
|Public Liability||Covers against claims for personal injury or property damage to third-parties that occur as a result of your business activities|
|Building||Covers the cost of replacing or repairing buildings your business owns as a result of fire, storm and other perils|
|Contents||Covers material loss damage of your fixtures, contents and stock caused by unforseen events such as fire, storm and other perils|
|Theft||Covers loss or damage to contents or stock through theft or attempted theft at your business premises|
|Glass||Covers the cost to replace internal or external glass that is damaged or broken|
|Business Interruption||Covers loss of income and some of the additional costs of running your business as a result of interruption caused by an insured event|
Other types of cover that you may want to consider, depending on the kind of business you operate and your business activities, are:
|Machinery Breakdown||Covers the cost of repairing or replacing insured machinery and equipment, such as refrigerators, boilers and pressure plants following a breakdown|
|Electronic Equipment||Covers insured computers and electronic equipment against loss, damage or breakdown caused by an event defined under the policy|
|General Property||Covers loss or damage to portable and valuable property, such as tools. mobiles and laptops, around Australia|
|Money||Covers money that is lost, stolen or damaged whilst on your premises, in transport, or in your personal custody|
|Transit||Covers loss or damage to goods that are in transit in a vehicle owned or operated by you|
|Employee Dishonesty||Cover against losses incurred as a result of fraudulent or dishonest acts by your employees|
|Employee Practices Liability||Cover for claims made against you by employees for an alleged wrongful act, including unfair dismissal, defamation, harassment or discrimination|
|Statutory Liability||Covers the costs and expenses, including fines and penalties following an official investigation or inquiry as a result of innocent breaches of Acts of Parliament, such as occupational health and safety laws and environmental laws|
|Tax Audit||Covers professional fees and other costs in the event your business is audited by the ATO|