Find out what the different types of business insurance available in Australia are with Savvy today.
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If you own a small business, there are many types of business insurance that you may need to consider. Deciding which type is most appropriate for you may seem a daunting task, so it's important to understand how each of these types of cover works.Â
You can find out more about what business insurance policies you can choose from right here with Savvy. Our comprehensive guide breaks down the different types of cover to help you understand how each of them works and determine which are most suitable for your needs with more confidence.
These are the main types of business insurance that can protect every aspect of your company:Â
Workers compensation insuranceÂ
Workers compensation is compulsory insurance in Australia which covers the cost of workers’ wages if they’re unable to work because they are hurt or injured, and provides compensation if they suffer permanent injury or even death due to a work-related incident. It also covers the cost of rehabilitation and any modifications needed to the person’s home or office to assist them to cope with a permanent disability. Â
Public liability insuranceÂ
This is another form of business insurance that may be compulsory for certain businesses and public events. Public liability insurance protects you and your staff against legal action in the event a third party is hurt or injured, or their property is damaged, whilst on your business premises. This includes another person’s property which was in your care or possession at the time it was damaged.Â
Professional indemnity insuranceÂ
If your line of work includes giving advice or performing a service, professional indemnity (PI) insurance is a must-have. It protects professionals from being held liable for damages and covers the expense of defending yourself in court against claims of negligence, omission or breach of duty while doing your job. This can include anything from unsuccessful surgery to giving financial or legal advice which turns out to be incorrect.Â
Product liability insuranceÂ
Product liability insurance will protect you against claims that your goods are faulty, dangerous, or caused harm to a third party. It can include any type of claim from an allegation of food poisoning at your restaurant to a building collapse due to the steel or concrete you supplied for the foundations. Note that you don’t have to manufacture the faulty product yourself: you can still be found liable for supplying a faulty product even if you just packaged, advertised or retailed it on behalf of the manufacturer.Â
Building and contents insuranceÂ
This insurance covers your basic assets from events such as storms, fires, impact damage, accidents, theft and malicious damage. If you’re renting your business premises, ask your landlord if they have insurance that covers your actual building, as you may not need building insurance as a renter. However, you may still need building contents insurance, which can cover all the business equipment in your shop, factory or office. Check whether your contents cover includes items that may not be in the office when they suffer damage, such as laptops and other mobile equipment. Â
Business interruption insuranceÂ
If your business is unable to earn revenue due to an insured event like a storm, fire, flood or impact, business interruption insurance can pay your workers’ wages, your utility bills and the cost of relocation and rent if you have to move whilst your usual place of business is being repaired or replaced. It can protect your business and allow it to recover from a catastrophic event that would normally prevent your business from operating.Â
Commercial vehicle insuranceÂ
Choose from third-party property, fire and theft or fully comprehensive insurance to protect your commercial vehicles including cars, utes, lorries, vans, trucks and tractors. Insurance for commercial vehicles is entirely different from the retail car insurance policy you may have which protects your family car.Â
Cyber liability protectionÂ
This protects all your online systems and data from cyber attacks, which could involve a hacking attempt, your website being defaced or stolen, client data compromised, or a ransomware or data hijack attack. Cyber liability insurance will cover the cost of repairing the damage, retrieving your stolen data and defending your company's reputation through legal action or investigation should you suffer such an incident.Â
Management liability insuranceÂ
Management liability insurance protects the company plus the managers and directors against the risks and exposures of running the business. It covers liability for mismanagement, including allegations and acts of misconduct, legislative breaches, claims of unfair dismissal and sexual harassment. It includes the cost of defending your company and managers’ reputations against defamation and can cover the cost of fines and penalties imposed if there is a negative legal outcome.Â
Small business insuranceÂ
General business insurance, often called small business insurance, is a package encompassing a range of different types of insurance which a small business may need. It can include cover for such items as building contents, general property, glass breakage, portable possessions such as mobile phones and laptops and provides generic cover against fire, theft, storms and accidental damage. Â
It may or may not include public liability insurance, or this type of insurance may be offered as an additional optional extra if required. It can even include such extras as tax audit protection in case the tax office decides to conduct an audit of your business.Â
There’s no ‘one size fits all’ when it comes to business insurance, as all businesses carry different risks. The type of business insurance you need will depend on:Â
As discussed, there are many different types of insurance which can cover all aspects of running a business. Broadly, these protect the fundamentals of any business, which are:Â
To work out which types of business insurance you may need, ask yourself the following questions to narrow down your options:Â
Do you have staff or employees working for you?Â
If the answer is yes, you’ll need workers compensation insurance, as this is compulsory in Australia for all employers. Â
Do you sell goods directly to the public?Â
The definition of ‘goods’ is very broad, and includes not only single products for sale but food, drinks and consumables too. This includes restaurants, cafes and takeaway food businesses such as bakers and pizza shops. Intangible goods such as downloadable music or e-books are also included in this definition. If your answer is yes, you should consider product liability insurance. Â
Do customers or clients come to your business premises?Â
If you have any contact with the public at all, which includes visiting customers or clients or dealing with their property, you should strongly consider public liability insurance.Â
Do you give advice, offer a professional opinion or provide a professional service?Â
This covers many different occupations such as medical, legal and financial practitioners, but also allied health professionals such as occupational therapists or fitness coaches. If you’re in any profession which offers advice or service, you should consider professional indemnity insurance. Â
Do you do most of your business online or rely on technology to provide your main source of living?Â
This could apply to any business which mainly involves IT, relies on databases or computer systems, or involves the transfer of information. Examples include most online businesses, banks, other finance and insurance businesses and computer-dependent occupations such as graphic artists and illustrators. If this describes your business, you should consider cyber liability insurance.Â
Once you’ve decided what type of insurance you need, it’s time to work out which exact policy is the best one for your business. Here are some aspects of insurance you should compare:Â
It’s important to look at all areas of your business, so carrying out a risk assessment may be a great way to start to qualify what type of insurance coverage you really need.Â
Think about which items really matter to your business, and what you could possibly do without if you had to. Those essential items that first spring to mind are your basic business assets and deserve the most comprehensive coverage.Â
What would stop you from doing business? Are power interruptions your greatest threat, or the possibility of losing your business premises? Consider how you generate revenue and protect this aspect as a matter of priority.Â
Workers compensation insurance is compulsory in Australia, so if your employees are hurt or injured, they will be covered. However, could your business still survive if certain key people were suddenly absent? Consider the importance of people to your company and ensure they have sufficient protection where necessary.Â
Once you’ve decided what type of insurance you require, it’s time to compare policies. Get a range of quotes from some of Australia’s leading insurers through Savvy so you can compare them and get the coverage your business needs with more confidence today.Â
Find the best possible insurance coverage for your business quickly and easily here with Savvy's 100% free comparison service.
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Disclaimer:
Savvy is partnered with BizCover Pty Ltd (ABN 68 127 707 975, AFSL 501769) to provide readers with a variety of business insurance policies to compare. Savvy earns a commission from BizCover each time a customer buys a business insurance policy via our website. We don’t arrange for products to be purchased from these brands directly, as all purchases are conducted via BizCover.
Savvy does not compare all business insurance policies or providers currently operating in the market. Any advice presented above or on other pages is general in nature and doesn’t consider your personal or business objectives, needs or finances. It’s always important to consider whether advice is suitable for you before purchasing an insurance policy.
For any further information on the variety of insurers compared by BizCover or how their business works, you can read their Financial Services Guide.
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