Guide: How to Find the Right Business Insurance for You

As a business owner, you are no stranger to pressure and responsibility. As such, you value solid advice from the experts. Your choices shape your life as well as those of your employees, customers, and even your competitors.

Business insurance is not a detail you can afford to take lightly. The correct business cover can determine whether your company will survive or fail after experiencing an unforeseen event.

Some risks are the typical chances all business owners make when they start a company such as floods, fire, and failures in services. Additionally, it is essential to consider a public health crisis, supply chain disasters, and claims against your company. Add to this the influx of cybercrimes and the potential for failure can feel almost overwhelming.

Having the proper business insurance cover can give you the peace of mind you need to sleep at night. While no one plans to need insurance, everyone who needs insurance is glad they planned for it.

What Insurance Cover is Mandatory for Australian Businesses?

There are two forms of compulsory insurance cover for Australian businesses that meet specific conditions. These types of insurance include:

• Worker’s compensation insurance – If your business employs others, then you must provide worker’s comp cover.
• Third-party personal injury insurance – Those who own and operate motor vehicles must have third party personal injury insurance.

Is Public Liability Insurance Required for All Australian Businesses?

There is a degree of confusion that surrounds the mandatory nature of public liability insurance in Australia. While there is no legal statute demanding a business have such insurance, there are specific enterprises and various trades that require public liability insurance in order to operate. Often, these companies are associated with some type of governmental oversight or licensing such as a plumber’s license.

Finalising your insurance will help with business security and finances

Aside From Legal Statutes, Why Do I Need Businesses Insurance?

The compulsory types of insurance for Australian enterprises is the minimum amount and type of coverage necessary. Australia has numerous types of insurance for businesses; many of these insurances have proven to be the difference between failure and survival of a business. Many reasons exist that compel a company to get business insurance cover, these include:

• To Protect Yourself and Your AssetsThe unexpected occurs more often than we would like to believe. As a business professional, avoid the notion that from the accidents and failures which occur every day will never happen to you or your firm. No matter how careful or forward-thinking you and your team are, mishaps happen. Do you want to risk your livelihood and even personal assets to avoid insurance?
• To Protect Yourself and Your StaffYour employees depend on your success for their means of supporting themselves and their dependents. A calamity that devastates you will also harm those who work on your behalf. Occasionally, people confuse business insurance with worker’s compensation insurance. However, worker’s compensation insurance is in place to assist a worker injured on the job.
• To Increase Your Customers’ ConfidenceWhen a customer knows you have the necessary cover in place to make sure they are secure, the chances of a working relationship increase. In fact, some businesses refuse to work with an enterprise that does not have insurance cover.

How Do I Know What Kind of Business Insurance I Need?

Because there are so many types of business insurance, it is difficult to choose what is necessary for your company. Here are three points to consider when deciding on your business insurance. Additionally, a representative of your insurance company can assist you in determining what will give you the best cover.

1. Common Hazards of BusinessThese are typical risks that many Australian businesses face:
   • Natural calamities such as floods, fires, and damage from storms
   • Fraud, theft, or vandalism
   • Negligence
   • Accidents on your property or accidents that happen because of your products or goods
   • Technology failure
   • Failure of machinery
   • Cybercrimes such as data breaches or identity theft
2. Specifics About Your BusinessIn almost all cases, specifics about your company dictate details of your insurance. You will need to look at:
   • What you do
   • Business location
   • Number of employees
   • Other factors that you depend upon to run your business
   • If you transport stock
   • If giving professional advice is a part of your work
   • The approximate value of your stock
3. Consider a Risk AssessmentTaking the time to look at various risks can help you make smart decisions as well as save you from a substantial loss. Conducting a basic risk assessment is worth the time you put into it. You can perform a risk assessment to help guide your insurance decisions. Begin with the most common risk categories to discover your risks.
   • Strategic Risks – This category looks at business decisions and objectives
   • Compliance Risks – Following codes of practice, upholding regulations, obeying laws
   • Financial Risks – The structure of your business, how financial transactions work systems in place to manage finances
   • Operational Risks – Your administrative and operational risks

Using a risk assessment matrix is a straightforward way to examine the likelihood of various risks in order to determine areas you should focus upon when insuring your company.

What Are the Kinds of Business Insurance in Australia?

As you may imagine, there are numerous kinds of insurance for businesses in Australia. Some of these are fairly universal and a part of the insurance profile for most companies, some may apply to your business in certain situations. Other varieties would serve no purpose for you. This is why running a risk assessment is an excellent way to decide if your firm needs a particular type of business insurance.

An Overview of Some Standard Types of Business Insurance Cover in Australia

• Professional Indemnity – Having professional indemnity insurance will protect you and your business if a client suffers a loss after receiving your service or following your advice. Given the propensity of legal action following a loss, professional indemnity cover could save your business.
• Public Liability – Even the best trained and experienced workers occasionally make mistakes. In the event that a third-party experiences a loss, an injury, or death due to an oversight on the part of you or your company, make sure you’re protected with public liability insurance.
• Product Liability – If a product you create causes damage, injury, or death, product liability cover will safeguard you and your assets.
• Property Insurance – Businesses with property insurance are safe from losses to their land, structures, stock, or contents. These losses can be caused accidentally or be one of the listed insured events written in your policy.
• Commercial Vehicle Insurance – If your business operates one or more cars, trucks, vans or other means of transporting goods or services, commercial vehicle cover can give you peace of mind. Business owners can choose from a policy with comprehensive coverage or one of several event-specific policies such as theft or third-party property insurance.
• Tax Audit Insurance – Business owners gain peace of mind from a tax audit cover. With this insurance, you will have protection against the cost of any audit into your tax liability or an ATO- initiated investigation.
• Business Interruption Insurance – Being forced to temporarily close your business due to events that are outside your control does not automatically mean your business will never return to its operating capacity. If an event specified in your policy makes operating your business impossible, this cover can save you from ruin.
• Goods and Property in Transit Insurance – If your company ships, delivers, or depends on shipments, consider a goods and property in transit policy is a valuable safeguard. Similarly, if your movement of products is dependent on maritime shipping, you may consider adding marine cargo insurance to your business cover.
• Cyber-attack and Cyber-liability Insurance – As the virtual world becomes a more significant part of daily life, cybercrime in the public and private sectors is a significant concern. Policies to protect your business, as well as your customers, are essential if you have an online presence. Many business owners make the mistake of believing cyber-crime is rare or isolated, and they are immune. These beliefs are decidedly false. Crime via the internet accrues an annual 1billion indirect costs to the Australian government, Australia is the fifth most targeted nation in the world when it comes to cyber-attacks, and nearly 60 per cent of Australian businesses believe they have been victims of cybercrime.
• Machinery and Equipment Insurance – Depending on your policies, you may want to consider extra cover for equipment or specialised machinery to defray repair and replacement costs.
• Computer and Electronic Equipment Insurance – More businesses than ever are investing in cover for their electronic equipment and computers. A policy typically covers damage to computers and other electronics in the event of damage or loss caused by accident. These policies also cover the accidental loss of data, but not a data breach caused by criminal activity.
• Insurance Against Theft – It is crucial to have cover for your inventory. Be sure of any specifics that may not be a part of your policy. Some examples include employee dishonesty as well as theft of money.
• Glass Insurance – Insurance cover expressly built to take care of the costs associated with replacing broken glass both internally and externally can be exceptionally useful to some businesses. Frequently, a glass insurance policy will cover all items made of glass on the premises. Business owners should consult with an insurance expert to learn about policy specifics.
• Farm Insurance – If you make your living on a farm, then you understand the unpredictability of balancing nature and technology. Farm insurance can cover buildings, machinery, crops, and livestock.
• Deterioration of Stock Insurance – If your business depends on refrigeration or keeping items frozen, you can protect yourself from loss with this kind of cover.

Insuring your business includes making sure your staff are safe.

Overview of Specialised Insurance for Particular Circumstances

A significant number of businesses would find sufficient cover for their companies from the list of standard insurance types. However, technology and social trends necessitate insurance that protects companies and owners in specific circumstances.

• Directors and Officers (D & O) Liability/ Managers Liability Insurance – There is a legal mandate for business managers and directors to take personal accountability for actions within the business they own or operate.This responsibility stretches from matters of safety compliance and accidental errors to willful deceit on the part of a company employee.

  By adding D&O Liability if you operate a public company or management liability if you own a private business, you protect yourself from financial losses and liabilities.

  This insurance cover is especially well-suited for companies who have multiple tiers of management as it affords peace of mind to those overseeing others within your organisation.

• Business Expense Insurance – When you have a business expense insurance policy, you are safe from devastating losses if you are unable to work due to injury or illness. The cover typically has a duration of six months, but an insurance professional can discuss terms with you.With this type of insurance, you will receive money for the standard costs of doing business. So, even if you are unable to operate your business, there are funds that cover staff salaries, office rental fees, utility bills, and other fixed costs of doing business.

  Business expense insurance is useful for those running small operations, sole trader endeavours, or any enterprise that could not make money without the work of its owner.

• Crisis Management Insurance – While it is true that good news can travel fast, bad news travels even more quickly. The technology that brings us together offers the chance to share painstaking details of mishaps at lightning speed. If your business is the one that experienced a security breach, had a negligence claim filed against you, or a notable service failure, you are facing a crisis.A policy that covers crisis management can give you the necessary funding to save your firm’s reputation and possibly the entire business. You will have the essential means to hire a public relations expert or other professionals to salvage your reputation.

  Crisis management insurance operates under specific conditions within well-delineated circumstances for a set amount of time. An insurance professional can review specifics of this type of cover with you.

• Key Person Insurance – Many enterprises have one or more persons who are at the heart of the operation. Some rely on this person or persons to maintain customer confidence. Others need the expertise of their key people to the extent that the business will not operate if they are not on the scene.Key person insurance speaks to businesses in this situation by providing a lump sum payment to allow a company to cover the costs of doing business during the key person’s absence. The specially designed insurance cover will bolster your business until your key person can return to work or until you are able to locate a suitable replacement to carry out their tasks.

  Businesses of all sizes can benefit from key person insurance if the bulk of responsibility for the whole operation falls on the shoulders of one highly trained or skilled individual.

• Business Interruption Insurance – For many businesses, a work stoppage for a single day can plunge it into chaos. Regardless of the reason behind the stoppage, various aspects of your company’s operations will continue.Your employee salaries, loan payments, and other fixed costs of business remain regardless of your ability to run your company. Additionally, your firm’s inability to meet deadlines for your clients will usually result is some form of compensation on your part. Disgruntled clients can also withdraw their business and influence others to do the same. Nothing happens in a vacuum, and there are few second chances in the business world.

  Business interruption insurance helps you cover the costs of business that occur during a work stoppage. Some causes of an interruption to your company workflow are exempt based on the specifics of your policy.

Your Insurance Needs at a Glance

It is helpful to line up the specifics of your business to assess what cover will help you the most and what policies you can likely skip. Here are six questions that are helpful for business owners who would like to learn more about the most applicable insurance policies for their company.

1. Do you offer services to customers at your location or in public? If so, you would benefit from a public liability insurance policy.
2. Does your firm produce goods later sold to the public? Yes, then product liability cover could be advisable for you
3. Do you have employees at your business? A company with employees must have workers compensation insurance. Additionally, employee fraud insurance could be a good idea.
4. Is offering professional advice a part of your business? If so, you should consider a professional indemnity insurance policy.
5. Is a large percentage of your business conducted online? When you depend on the virtual world for your business, cybercrime and cyber liability insurance are essential ways to protect yourself and your firm. Additionally, cover for computers and other electronics can be useful.
6. Do you have specific items that need specialised cover? Yes, depending on what you need to protect, machinery and equipment insurance, computer and electronics insurance, deterioration of stock insurance, or glass insurance may apply to your enterprise.

Please note that this post is for informational use only. It contains a general overview of information and is not intended to replace or supersede expert information or professional advice.