When looking for Business Insurance, most small business owners typically worry about covering the major things such as their legal liabilities and top of mind assets such as their building, contents and stock.
But did you know you can get cover for most risks that a small business faces? Have you ever encountered a broken shop-front window? Or a broken-down fridge perhaps? Some of the more unusual types of cover may even be included in your current policy, so it’s wise to check it out.
Here’s our top picks of the not-so-run-of-the-mill covers that may well come in handy one day – probably when you least expect it!
1. Windows crashing (and not your PC windows!)
If you own a high street business it’s likely you’ll have a big, difficult-to-replace shop front window. And if you’ve ever had to repair or replace a window or door due to an accident or malicious damage you’ll know all too well that it can cost thousands of dollars. In fact according to QBE, the average amount of a glass claim is almost two thousand dollars.
A broken window can mean more than just replacing the glass – it can also cause damage to the window frame; damage to your stock; and having to repair or replace signage and resetting burglar alarms. You may also be charged a call-out fee from the security monitoring company. Not to mention, having a great big gaping hole in the front of your premises clearly leaves your business exposed to security issues, and could further encourage potential thieves to make themselves welcome.
Glass cover is often an option that can be taken out as part of your Business Insurance policy. In some cases may even be a requirement by your landlord. It not only covers repair or replacement of your shop-front windows but internal glass including counters, shelving, fixed mirrors, and ceramic and porcelain items too. It can also cover the cost of installing temporary shuttering, re-doing sign writing, replacing electrical signs and replacement of damaged property. Don’t forget to ensure you have your Public Liability cover in case a customer or member of the public is hurt or injured due to the broken glass!
2. Your machinery takes a holiday
Machinery is an integral part of many types of businesses, including manufacturing, hospitality, printing companies and laundry services, just to name a few. If your machinery breaks down, the cost of repair or replacement can be very expensive and can also affect your ability to operate, which can result in significant financial losses for your business. Consider a restaurant or cafe whose refrigerator has suddenly broken down just before the start of a busy period, or after they’ve received a huge order of stock. Or furniture manufacturer whose key piece of machinery has gone on the blink as the deadline for a large order is approaching.
Machinery Breakdown insurance is an important form of coverage for businesses who rely on machinery or equipment in their day-to-day operations, and can protect budget blowouts when your machinery unexpectedly takes a holiday. It covers the cost of repairing or replacing many types of machinery, such as air conditioners, pressure vessels, boilers, printing equipment, drills, grinders, refrigeration units, pumps, heating units, ventilation – the list is almost endless. A Machinery Breakdown policy can also cover additional costs, such as the hire of temporary equipment, express delivery or air freight so that replacement parts arrive quickly.
The cover can also apply to deterioration of stock if foodstuffs are spoilt due to breakdown of refrigeration. Machinery Breakdown is an essential cover for anyone who has a large amount of stock in cold storage.
It’s important to note however, that it does not cover the costs to repair or replace machinery that breaks down due to natural wear and tear, or whereby the equipment has not been maintained correctly.
3. Closed doors
There is a lot more to protecting your business other than insuring your physical assets. The same circumstances that can cause damage to your building, stock and contents – fire, storm damage, theft, vandalism – can also mean having to close your business temporarily.
It takes time to bounce back after a major disaster. Even a small setback such as loss of electricity can have significant financial implications. For example, the recent mass blackout in inner west Sydney, caused by a faulty piece of equipment in a nearby substation, meant hundreds of businesses were unable to continue trading for a number of hours. Think about whether your business would survive if you suddenly had to shut up shop due to an unforeseen event.
Business Interruption insurance is designed to compensate you for the money you lose when you are not fully operational due to an insured event. From loss of profits and ongoing expenses, such as rent and wages, to the costs associated if you need to relocate to a temporary premises. It provides much needed financial assistance when your business needs to bounce back quickly.
4. Cyber Ransom Demands
Previously, the word ‘ransom’ usually referred to tangible things such as people or property, but did you know ‘data ransom’ is one of the fastest growing events to affect businesses?
By now most people would be aware of such incidents following the “WannaCry” cyber attack, which held users’ files ransom by encrypting them, and only releasing them upon payment of the ransom amount in Bitcoin. Essentially anyone with an internet connection is at risk, but particularly small businesses with little or no network security, as cyber criminals know it’s easier to get in and get the information they’re after. And if you store sensitive information about your employees or clients you’re an exceptionally prime target.
Cyber Liability insurance is a ‘must have’ policy for all kinds of businesses that have an online presence. And although it won’t prevent ransomware attacks, it protects against the financial damage following an attack, and can include cover for extortion payments, as well as investigation and legal expenses involved with data breaches. It also provides access to cyber security experts, crisis management and PR experts.
5. The tax man comes knocking
With only a couple of weeks left until tax time (yes, it’s already that time of year again!), there might be a few worried business owners laying awake at night praying that the tax man isn’t going to pay them a surprise visit.
In particular this year, it is reported that the ATO is concerned about tax avoidance and are targeting SME’s with low incomes to ensure they are doing the right thing. They will be looking at publicly available information, such as social media accounts, to catch out business owners who report a low income but look to live a lavish lifestyle. Even if your tax records are squeaky clean, a visit from the ATO can cause nothing short of a major headache from all the stress and extra time you need to take out from working on your business in order to satisfy their requirements. Depending on the size of your business, a full audit could take anything from a few days to a few months.
If your business is the subject of a tax audit you are responsible for the costs involved, which is why Tax Audit insurance can be a nice little addition to your insurance portfolio. It covers the cost incurred from a tax audit or other official investigations by any Commonwealth, State or Territory department, body or agency, including professional fees for bookkeepers, accountants, lawyers and other associated costs.
Every business has different insurance needs depending on the industry you operate in, the kind of business you run, and the size of your business. You may not need cover for all of these things however, it’s important to assess your risks to determine what you do need to ensure your business is fully protected. To assist you in understanding what types of insurance policies are available to small businesses, you can download our FREE Business Insurance Checklist here.