The Insurance Council of Australia has estimated that 70% of businesses that are currently under-insured or uninsured will NEVER recover if they are affected by a major event such as a legal claim, fire, storm or earthquake. Your small business is your livelihood, and you need to be able to protect your assets in the event of an insurance claim. These figures indicate that the best way to protect your business is to choose the right insurance. To help you, Elliott Insurance Brokers have compiled a list of seven questions that every small business owner should ask themselves right now.
Do you have employees?
You have just taken on your first employee (congratulations!). If you are in Victoria you will need to update your business insurance immediately to include Worksafe Cover as it is compulsory. Worksafe Insurance covers employers if your workers are injured or ill as a cause of the work. It is compulsory if you pay your worker more than $7,500 per year such as apprentices, and even if you have just one worker.
Businesses in other states can obtain an equivalent of Workers Compensation Insurance in their respective states by consulting a broker. This covers the business similarly, for payment of medical bills or other related payouts due to the employee being unable or limited to work as result of injury or illness from the job.
All businesses also will need to make sure they have Revenue Insurance which is sometimes referred to as ‘Business Interruption Insurance’. This covers your business for the usual profits and running costs such as paying for employee wages during the period of hardship.
Is it a professional business whereby you advise clients?
You are an accountant, legal advisor, marketing executive or other professional giving advice. This means that you are giving clients guidance that can potentially go wrong (we all make mistakes sometimes). You need to make sure you have Professional Indemnity Insurance to cover any slip ups and negligence claims.
Do you supply, sell, or deliver products?
Did you know that if you import a product from overseas you are liable as a manufacturer in Australia? You will need to apply Product Liability Insurance to your business if you supply, sell, or delivery any product.
Speaking to your insurance broker can help you clarify any questions regarding the products you sell and the insurance implications affecting them.
If a customer buys your product (or your service is repair or maintenance) and the goods cause injury, death, or damage, you may become liable to pay the costs. If any of these events happen as a result of your product failing, then you can also be held liable.
Also, if you are transporting products it is best to obtain a Goods in Transit Insurance to cover the event of potential damage during the transportation process.
Do you have a company car?
You will need to ensure you have Motor Vehicle Accident, Vehicle Insurance, and 3rd Party Personal Injury Insurance if you own a vehicle for operation within your business. It might be a promotional vehicle with stickers, a vehicle to drive for work, or a vehicle that is driven to carry equipment.
The insurance you apply to your business will depend on the type of vehicle, the goods which are carried (if any), the frequency of use, and the way it is used. It is best to discuss the specifications with your insurance broker to determine what type of cover applies to your particular vehicle. All covers will need to include a commercial or business use clause.
These vehicle insurances cover your business in the event that your vehicle is in an accident, it is stolen or damaged, or your vehicle causes death or injury to a third party.
Do you have a set place of business or operate from a vehicle?
If you have a set place of business need to take our premises and assets insurance. Premises insurance ensures that your place of business is covered in the event of a loss from damage, theft, or other incident. For example you may have an office, a warehouse, a shop, or work from home. If you have items inside such as computers, stock, equipment, or files these can be protected by assets insurance covering contents and equipment. These all need to be covered in order to prevent the interruption of trade.
If your business transports any goods you should also consider obtaining Goods in Transit Insurance in order to avoid loss in the case off potential damage or loss via the transportation process. This might be by land, sea, or air.
Do you deal with customers?
Dealing with customers can open your business up to a variety of risks. If you have face-to-face contact with customers, you will need to obtain Public Liability Insurance. Public Liability will cover your potential legal responsibility in the instance of a third party being injured, property damage, or if you business is found to be negligent. It is your ‘duty of care’ to ensure that your place of business is safe for those visiting and public liability will cover you in the case that it has not been.
Are you an independent contractor?
Personal Accident and Sickness Insurance covers you in the case of loss of income because of accident or sickness that has stopped you from performing your job. This is important for independent contractors as they are not always entitled to workers compensation insurance.
After you have the answers
All businesses have different insurance risks and needs. Not all the types of insurance discussed above will apply to your business, and there may be more specific types that we have not mentioned that do apply. In the event of a business interruption such as fire, flood, accident, theft, equipment failure, injury, or other major loss your business could face significant reduced profits and revenue.
A dedicated Australian insurance broker can accurately assess what your business risks are and act on your behalf to secure the correct policies in your interest. If you need help assessing your small business risks or insurance needs, contact Elliott Insurance Brokers today to ensure your business is not disrupted and does not fall short financially.
