Whether you’ve had a successful business for years or are just getting started, the time and effort you’ve put into it are deserving of recognition. This is why you should not risk squandering all of your hard work, sweat, and tears by failing to protect your important assets from the unexpected.
However, many small business owners are unsure which insurance broker to select or what to look for in a business insurance quote.
So, before you start comparing business insurance policies, make sure you completely grasp what coverage your company requires as well as your financial circumstances.
Why? Because what works for one company might not work for another, even if they’re in the same industry.
What is business insurance?
Insurance for your business protects you, your employees, and your company from financial hardships that may emerge as a result of your legal liability. If a customer is hurt or suffers losses as a result of utilising your products, or if anyone is injured or property is damaged as a result of your negligence, you may be sued. Someone slipping on a wet floor could be the cause. You could be able to get reimbursed for their medical expenditures, rehab, and legal fees.
Other insurance, such as Business Insurance and public liability insurance, may protect you from damage to machinery or equipment, theft, or failure.
If your company provides financial or other advice or services and a client receives erroneous or omitted information, they may file a claim against you, so make sure you have a policy that is customised to your company’s needs.
A business interruption insurance policy protects you in the event your firm is forced to close due to unforeseen circumstances. You are protected if client data is stolen or if your company activities are halted due to interruptions, such as if you are unable to operate as a result of a natural disaster.
What is the difference between the types of insurance that are available?
Different enterprises require different levels of coverage at various prices. The cost of business insurance is determined by the industry in which your company operates. A hospitality business, for example, is unlikely to require agricultural insurance for animals and bulldozers.
Some business insurance products, such as workers compensation insurance and public liability insurance, are required for Australian firms with employees, whether they are small or large. For motor vehicles, third-party personal injury insurance (CTP) is also required.
Many business owners choose a comprehensive business insurance policy that covers all of the nuances. For example, a company located in an office building may require professional indemnity coverage in the event of a business interruption that leads to a financial loss.
Tip: As a business owner, carefully study the policy wording or Product Disclosure Statement (PDS) of any of Australia’s main insurers for your small business insurance policy, so you know exactly what you’re getting before signing on the dotted line for your small business insurance.
What should my business cover include?
When comparing insurance quotes for an Australian business, you should ask yourself the following questions:
- Would I be paid full market value, a percentage of market value, or an agreed-upon amount?
- Is there a claim lifetime limit or an annual payout limit?
- What are the things that could cause my claim to be void?
- Is there a claim limit?
- What exactly am I protected for with the premium I paid?
Getting a clear answer to these questions will help you determine whether the business insurance work done by your insurance provider, as well as the policy chosen to cover your business assets, is appropriate for your organization.
What are the different types of business insurance?
Apart from the mandatory insurance listed above, such as public liability cover, and depending on your industry, an Australian business may need the following coverage:
- Professional indemnity insurance: If you give professional advice, this covers you and your company.
- Liability insurance for cybercrime: This safeguards your company from the loss or theft of client information as a result of cybercrime-related data breaches.
- Management liability insurance: You’ll be grateful you have this insurance if you face a claim for alleged or real mismanagement by the company’s executives, directors, and officers.
- Accidents and illnesses. This type of insurance is self-explanatory and provides financial assistance if you are unable to work due to an injury or illness.
In some cases, you can combine different insurance types within some form of a bundle. A package may include the following items, depending on your industry:
- Contents: This protects your computer equipment and other business assets from disasters like floods, fire, theft, and storms.
- Building: If you own the building in which you run your business, this may cover the costs of repairs or rebuilding after natural disasters or catastrophes such as storms, floods, or fires.
- Insurance for business interruption: This can protect your financial status by insuring you against lost revenue and operating costs as a result of a business interruption.
- Employee deception: Covers any losses caused by employee theft or fraud.
- In transit property: Covers theft or property damage to tools or equipment transported by road in a vehicle owned or operated by your company anywhere in Australia.
- Glass: Glass coverage may include both external and internal glass damage, depending on your policy.
- Breakdown of machinery: For losses resulting from equipment failure and, in some situations, stock degradation.
- Auditing your taxes: Outside accountants’ fees in response to a business tax audit are covered.