Business insurance is a type of coverage that protects businesses of all sizes from financial losses caused by unexpected events or liabilities. There’s a wide range of different insurance types designed for a variety of needs. From a small baking business’ batch of muffins causing people to fall ill to a large consulting firm fighting claims of negligence in court, business insurance can help you out.
With the right policy, you can safeguard your business’ assets, employees and reputation, giving you peace of mind and greater financial security. Compare quotes side by side to help you lock in the best deal for your business!
Is business insurance compulsory?
In most cases, having business insurance isn’t usually mandatory by law. However, there are some situations where it’s compulsory. These are:
- Workers’ compensation insurance for all businesses with employees
- Compulsory third party insurance for all businesses using motor vehicles
- Industry-specific public liability insurance (depends on the nature of your business and which state or territory you’re operating in)
You’ll need to check with your industry body or a professional business adviser or insurance broker if you’re unsure which policies are required. The Federal Government’s adviser finder helps you locate professionals and organisations close to you.
Regardless of whether it’s compulsory, having the right cover is essential for several reasons:
- Asset protection: your company's assets, including physical property, equipment, inventory and intellectual property can all be protected against damage or theft.
- Liability coverage: accidents happen. If your business is held responsible for causing property damage or injury to a third party, insurance can cover the cost of legal proceedings and settlements.
- Business continuity: insurance can help keep the lights on in the face of costly interruptions and lost income.
- Peace of mind: knowing that your business is adequately protected by insurance is worth the cost of the policy for many owners.
Why compare business insurance policies through Savvy?
How much does business insurance cost?
There’s a range of factors that can impact the cost of your insurance policy, including:
- The type of insurance you buy: each policy is different, so some will naturally cost more than others.
- The sum insured: insuring more valuable assets will naturally lead to a costlier premium.
- What your business does: businesses with lower risk profiles will be cheaper to insure. For example, an electronics store is at greater risk of theft than a novelty gift shop.
- The size of your business: operations with more moving parts will often attract high premiums compared to small businesses and sole traders.
- Your business’ location: whether your business is in an area prone to flooding, natural disasters or theft is of great importance to insurers.
- Your past claims record: businesses that have avoided frequent claims in the past are likely to be offered cheaper insurance premiums than those with a long list of claims.
According to business insurance broker BizCover, the average cost of an insurance package purchased through them in NSW sits at $96.43 per month for retail businesses and $132.75 per month for food businesses. These are just two examples, but they show how different businesses have different coverage needs and risk profiles.
We’ve partnered with BizCover to bring you a range of business insurance policies to help you compare them side by side.
The types of business insurance and what they cover
Workers’ compensation insurance
Claims of injury or illness to employees while working and any lost wages.
Public liability insurance
Claims of injury or damage to belongings while on your business premises or because of your activities.
Professional indemnity insurance
Claims of negligence or errors in the professional services you provide to clients.
Product liability insurance
Claims of injury or damage to belongings caused by products you produce, supply or sell.
Commercial property insurance
Damage to your business property’s structure due to a covered event like fire or theft.
Business contents insurance
Loss of or damage to your business’ contents, such as stock, fixtures or fittings, due to a covered event like fire or theft.
Business interruption insurance
Loss of income or increase in operating costs due to a covered event, such as one that forces your business to temporarily close or relocate.
Management liability insurance
Claims of mismanagement or wrongdoing made against company management from within the business.
Business equipment insurance
Loss of or damage to your business’ equipment, such as plant and machinery, as well as portable equipment like tools and stock, due to a covered event.
Cyber liability insurance
Financial losses to your business or losses and liabilities to customers as a result of a cyber breach or attack.
Tax audit insurance
Costs related to a tax audit carried out by the ATO, such as accountants and other professional fees.
Small business insurance
Usually a package of one or more types of cover to provide small businesses with the cover they need.
What insurance do I need for my business?
Every business is different when it comes to their specific insurance needs. It’s important to ask yourself a few questions to determine which coverage types you might have to take out:
- Do you have employees? If so, workers’ compensation insurance is mandatory regardless of where you’re operating.
- Is your business customer-facing? Having a physical business premises where people meet you or meeting them at their homes will likely call for public liability insurance.
- Do you provide professional advice? Professionals like financial advisors, lawyers, doctors and accountants should all have professional indemnity insurance (and may be required to).
- Do you manufacture or sell goods? Product liability insurance is a must, as you could be on the hook if someone falls ill from your pies or ruins their laptop due to your leaky cup.
- Do you own your business premises? Commercial property insurance may be a requirement, especially if you’re still paying off the purchase much like home insurance.
- Do you keep inventory on-site? Taking out a business contents insurance policy will help protect against damage to your stock, especially if it’s valuable.
- Have you taken the time to compare policies? Once you’ve decided which policy or policies your business needs, it’s crucial to compare offers between providers. Consider things like the cost of premiums, maximum payouts, inclusions and exclusions. You’ll be able to do just that by viewing deals side by side through Savvy.
- Types of business insurance – business.gov.au
- Adviser finder – business.gov.au
- How Much Does Business Insurance Cost? – BizCover
- Deductions for operating expenses – Australian Taxation Office
