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Running a business is a challenge, and it often involves putting your own finances at risk. It makes sense to manage risk, reduce uncertainty and protect your livelihood.
Business insurance can protect the equipment and machinery you need to stay in business. It can ensure that you, your employees and any members of the public with whom you interact in your business are protected from the risk you face as a business owner.
And it may also provide financial support if your business is unable to operate following an unexpected event such as a fire or natural disaster.
Think about how you would manage if your stock, equipment, or even your premises were badly damaged or destroyed. Would you be able to continue running your business? Would you be able to recover from the financial loss?
Insurance companies provide a variety of policies that cover small businesses, tradespeople, professionals, hospitality operators and more.
Different types of business require different policies to protect company assets and to protect against legal liabilities. Make sure you know what kind of insurance you need for your business.
Business insurance policies can be changed and customised to suit your business needs. You can choose from a wide range of insurance cover specifically tailored for business owners.
Many products are also designed to meet the needs of specific industries.
Insurance companies that offer business insurance will often offer packages that bundle different types of insurance policies together. These are designed to meet the needs of small-to-medium-sized businesses and may be less expensive than purchasing policies separately.
There is no one-size-fits-all insurance solution for small businesses. Your insurance needs will vary according to the industry, trade and type of business you are operating.
For example, the risks a home-based sole trader will face will be very different to those faced by a coffee shop, landscaping business or a construction company.
Compulsory business insurance
Two forms of insurance are compulsory for most Australian businesses.
Every state and territory operates its own Workers’ Compensation scheme, which protects employees in the event of an accident or sickness. Each jurisdiction has different requirements. For more information, visit your state or territory’s workers’ compensation authority:
If you operate a vehicle, Compulsory Third Party car insurance covers you for claims made against you for personal injuries arising from the use of your car. This type of insurance is a requirement for registering and operating a vehicle.
You should consider other forms of motor vehicle insurance to cover other risks and liabilities, such as damage to property or your own or another person’s vehicle.
Each state and territory CTP scheme is different. For more information on these schemes, visit your state or territory’s vehicle registration authority:
Common types of business insurance
Common types of business insurance focus on assets and revenue, liabilities, and personnel. These include:
Protects you from legal action taken against you if someone suffers a loss after following your professional advice or as a result of your receiving your service.
Covers damage or loss to buildings, contents and stock caused by insured events and accidental damage
Covers your business for legal costs and compensation costs that you might have to pay if you are found liable to someone because you caused death or injury, loss or damage to their property, or economic loss due to your negligence
Covers damage or loss to buildings, contents and stock caused by insured events and accidental damage
Businesses that supply, deliver or sell goods, even in the form of services or repairs, may need cover against claims of goods causing damage, injury or death. Product liability cover protects you if any of these events happen to another person or business by the failure of a product you are selling
Theft insurance generally covers your business against loss or damage to your stock and contents if someone forces their way onto your premises, or uses deception to get in to your premises. It usually does not cover cash losses, which can be covered separately
Covers your money for theft at the premises, in transit and at your private residence
Every state and territory requires mandatory motor vehicle accident personal injuries insurance for all company or business vehicles.
Many different types of policies are available, so make sure you understand the options before making a decision. Consider the three most common options below:
Covers costs incurred by your accountant, or registered tax agent, when notified by the Australian Taxation Office to conduct an audit or investigation into your tax liability
Covers businesses that suffer a loss because they cannot trade for a period of time due to loss or damage from a weather event, flood, fire or other insured interruptions
Covers businesses for the deterioration of chilled, refrigerated or frozen goods and stock if a refrigerator or freezer unit storing these goods breaks down and spoils the items
Covers the replacement of external and internal glass, as well as specified glass items
Covers against fraudulent or dishonest actions committed by employees that directly results in loss of money, negotiable instruments or goods
Workers’ Compensation insurance is compulsory in all states and territories for businesses with a certain number of employees. For more information click here
Covers machinery and equipment used in your business. Some policies may also cover stock damages as a result of the breakdown
Covers the loss of, or damage to, goods you buy, sell or use in your business when they are in transit by road, rail, air and sea. It also covers damage to property – such as tools and equipment – while in transit within a defined set of geographical limits
Covers accidental damage or loss to computers and electronic equipment and data
Thanks to the Insurance Council of Australia for their valuable content.
The information provided on our website is a summary and contains general advice about our products only. It has been prepared without taking into account any person’s particular objectives, financial situations or needs. Products issued by Sami Insurance Trading Pty Ltd. You should read the relevant Product Disclosure Statement, which contains full details of conditions, limitations and exclusions and consider whether the product is appropriate to you before making any decisions about whether to buy or continue to hold a policy. AFSL *** ***. ACN 646 774 129.