Business Insurance Explained: Common Types of Cover for Australian Small Businesses 

Running a business comes with risk. Whether it’s a customer injury, a cyberattack, accidental property damage, or a costly professional mistake, unexpected events can affect even the most well-run business. 

According to the Australian Bureau of Statistics, there were more than 2.7 million actively trading businesses operating in Australia in 2025, most of them small businesses. As legal, regulatory, and cyber risks continue to evolve, insurance remains an important part of business risk management. 

With the right business insurance, you can safeguard your business from unforeseen risks and mitigate the financial impact. 

Why business insurance matters 

Business insurance helps protect your business from the financial impact of unexpected events. While some types of insurance, such as Workers’ Compensation and Professional Indemnity insurance for certain occupations, may be required by law or industry regulators, others may be needed to meet contractual obligations or client requirements. 

Without the right cover, a claim, lawsuit, cyberattack or other unexpected event could result in significant financial costs and disrupt your business. Having appropriate insurance can provide greater peace of mind and a financial safety net, helping you recover and continue operating when the unexpected happens. 

Common types of business insurance 

1. Public Liability Insurance

Every business should consider Public Liability insurance, including freelancers and home-based businesses. If your business interacts with customers, suppliers or members of the public, accidents can happen even if you’ve done nothing intentionally wrong. 

Public Liability insurance provides protection for you and your business in the event a customer, supplier or a member of the public brings a claim against you due to an injury, death or property damage as a result of your negligent business activities. For example, a customer could slip and fall at your premises, or you could accidentally damage a client’s property while carrying out work. 

Related: Public Liability Insurance explained

2. Professional Indemnity Insurance

Professional Indemnity insurance (also known as PI insurance) protects you against losses claimed by a third party due to alleged or actual negligence in your professional services or advice.  

Any businesses providing a professional service or advice should consider PI insurance. It provides protection for professional services providers, such as consultants, accountants, architects, engineers, IT professionals and healthcare providers. 

Related: Professional Indemnity Insurance explained

3. Product Liability insurance 

Product Liability insurance provides protection in relation to claims by third parties due to personal injury or property damage caused by products sold or supplied by your business. Reasonable costs incurred in defending a covered claim will also be met. It is typically available as part of a Public Liability policy. 

Even if a business did not manufacture the product itself, it may still be named in a claim. Product Liability insurance is often included within a Public Liability policy. 

4. Cyber insurance 

Cyber Liability insurance helps protect you from claims and supports your profitability after a cyberattack or data breach, including costs associated with defending a cyber claim. You can also add optional cover for Social Engineering, Phishing or Cyber Fraud. 

Potential costs following a cyber incident may include legal expenses, customer notification costs, data recovery expenses, and business interruption losses. 

The Australian Cyber Security Centre received more than 84,000 cybercrime reports during 2024–2025, demonstrating the growing relevance of cyber risk for businesses of all sizes. 

5. Business Pack insurance 

A Business Pack insurance combines multiple insurance covers into a single policy package. 

It is designed to protect you for materal damage losses from unexpected events such as fires, storms, theft and accidental damage. Depending on the insurer, this may include contents cover, theft, glass, portable equipment, money, electronic equipment, and business interruption insurance. 

6. Management Liability insurance 

Management Liability insurance protects the company and the people who manage the company, such as directors, officers and senior managers, against wrongful acts — your liability for mismanagement. 

Management Liability insurance is essential for private companies, family businesses, and growing SMEs where owners and managers can be personally exposed to certain claims and investigations.

7. Business Interruption insurance 

Business Interruption insurance provides cover for the loss of income and increased costs of operating your business caused by a specified insured event (such as property damage or fire). It’s designed to assist your business to recover from an insured event by paying ongoing expenses, like wages or rent. It is also known as business continuation insurance. 

8. Tax Audit insurance

Tax Audit insurance covers a business for specified costs in the event that it is selected by the Australian Tax Office (ATO) for auditing. The policy covers the costs of accountant and other nominated professional fees incurred in the course of an audit. 

9. Building and Contents insurance 

If you own the building your business operates from, Building insurance can protect it against damage caused by insured events such as fire, storm and malicious damage. It can also cover permanent fixtures and fittings, as well as structural improvements like fences, gates and pathways.  

Contents insurance protects the items your business relies on every day, such as furniture, equipment, machinery and stock, if they’re damaged by an insured event. Depending on your business, this cover can help you recover more quickly after an unexpected loss and get back to business sooner. 

10. Personal Accident & Illness insurance 

Personal Accident & Illness insurance can provide benefits when a business owner or insured person cannot work because of injury or illness. It can also provide a lump sum benefit in case of accidental death or permanent disablement. 

Personal Accident & Illness insurance is an important cover for sole traders, self-employed professionals and contractors who are generally not eligible for Workers’ Compensation and don’t have access to paid sick leave. 

11. Portable Equipment insurance 

Portable Equipment (also known as General Property) insurance helps cover business equipment that is stolen, lost, or damaged. 

It is an important cover to consider for businesses that regularly take their tools or equipment on the road. It’s useful for tradespeople, contractors, photographers and other businesses that work across multiple locations. 

Portable Equipment insurance is also referred to as General Property insurance. 

Additional insurance to consider 

Workers’ Compensation insurance 

If you employ staff, Workers’ Compensation insurance is generally required by law in Australia, although requirements vary by state and territory. It covers costs such as medical expenses and lost wages if an employee suffers a work-related injury or illness. 

Commercial Motor Vehicle insurance 

If your business owns or regularly uses vehicles for work, Commercial Motor Vehicle insurance protects you against the financial impact of accidents, theft and damage. 

How to get the right business insurance 

Choosing insurance starts with understanding your business’s risks. So it’s important to do your research. Remember, cheaper doesn’t always mean better 

The type of work you perform, the clients you serve, the equipment you use, and the legal obligations you face can all influence which covers may be relevant. 

Buying insurance doesn’t have to be a chore. BizCover is the number one online marketplace for small business insurance. We have access to Australia’s leading insurers to help find the right cover for your business. 

Frequently asked questions 

Do I need business insurance as a sole trader? 

Many sole traders need business insurance because they remain personally responsible for business-related liabilities and financial losses. 

Does business insurance cover home-based businesses? 

Some policies may cover home-based businesses, although cover can vary significantly between insurers and policies. 

How much does business insurance cost? 

The cost of business insurance depends on factors such as industry, turnover, location, business activities, and the types of cover selected. 

Can businesses bundle different types of insurance? 

Yes. BizCover offers Business Pack insurance policies that allow multiple cover types, such as Contents insurance, Business Interruption, Portable Equipment, Theft, Tax Audit and more, to be combined within a single policy. 

How often should I review my business insurance policies? 

Many businesses should review their insurance annually or whenever there is a significant change to their operations, staffing, turnover, or assets. 

 

As with any purchase you make, doing your homework and shopping around is the best way to ensure you get the right cover for your business – and at the right price. The best way to do this is to use a comparison site where you can compare products closely and choose one that meets all of your small business needs. At the end of the day, having the right protection could mean the difference between continued success, and being left high and dry should you need to make a claim.