Top 7 Insurance Questions for Small Business Owners, Answered Here

For many business owners, business insurance can be a bit of a head-scratcher. Do you need it if you work from home? What’s the difference between Workers’ Comp and Personal Accident & Illness insurance? How much cover is enough, anyway?

If you’ve ever typed one of these questions into Google, you’re in the right place. We’ve answered some burning questions small business owners have about insurance. So you can make smarter choices when it comes to protecting your business.

1. Is business insurance required by law in Australia?

Some types of business insurance are required by law, while some depend on your business, clients or industry regulations. For example if you hire employees, Workers’ Compensation is a legal requirement in every state and territory.

Meanwhile, there isn’t an overarching law mandating Public Liability insurance. However if you’re a tradie, you maybe be required to hold Public Liability insurance as part of your licensing or registration process. Your clients may also ask for Public Liability insurance before signing a work contract with you.

Professional Indemnity insurance may be required by licensing boards, government entities or professional bodies. For example, the Design and Building Practitioners Act 2020 will require all building practitioners in NSW to hold Professional Indemnity insurance from July 2026.

2. Do I need both Public Liability and Professional Indemnity insurance?

These two policies cover different risks, and some businesses may need both.

Public Liability insurance is important for businesses who interact with clients or the public on a frequent basis. It covers you if a third-party is injured or their property is damaged because of your business activities.

Professional Indemnity insurance is designed for people who give advice or offer professional services. It kicks in if you receive a claim of errors, negligence or breaches of duty that caused your clients financial loss.

If you’re a consultant who meets clients face to face, or a tradie who also provides design advice, you might want to consider both.

3. Is Personal Accident & Illness insurance the same as Workers’ Compensation insurance?

They cover similar situations, but they’re not the same.

Workers’ Compensation insurance is mandatory if you have employees. It covers both yours and your employees’ medical bills and lost wages if they’re injured or get sick on the job.

However, here’s the catch. Workers’ Compensation can only be purchased if you have employees so  if you’re a sole trader, in a partnership or a company director for example, you cannot obtain cover.

That’s where Personal Accident & Illness insurance comes in as can be suitable for self-employed people who don’t have access to sick leave or Workers’ Comp. Personal Accident & Illness insurance will help cover your loss of income if you’re unable to work due to an injury or illness, so you can keep the lights on while you recover.

4. How much cover do I need?

The right amount of insurance depends on the risks that you face and how much it will cost to mitigate these.  You should consider factors like the size of your business, your location, your turnover, the type of clients you have, and most importantly the specific risks you face day to day and the financial impact these risks will have on your business.

A home-based graphic designer might only need a small amount of cover. A contractor working on multi-million-dollar commercial projects might need a lot more.

Some industries or government regulators may set minimum cover amounts for Public Liability or Professional Indemnity. It’s worth checking if those apply to you.

5. If I hire staff or subcontractors, do I need to consider extra cover?

The answer is probably yes. At the very least, it’s advisable to review your current cover.

Generally speaking, if you’re hiring employees, Workers’ Compensation insurance is legally required in most states. It can cover costs like medical fees and lost income if they get injured or ill on the job.

Even though subcontractors are not employees, they might still be representing your business or working on your job sites. That means your Public Liability or Professional Indemnity insurance may need to be updated to cover the work they do for you. Otherwise, you may want to make sure your subcontractors have adequate insurance on their own.

6. Do I need business insurance if I work from home?

It’s a common assumption among business owners that having Home and Contents insurance will cover them if something goes wrong. But many Home & Contents policies exclude business-related claims. So if a customer gets injured on your property or your business equipment gets damaged or stolen, your insurer might reject the claim entirely.  You should check your individual policy to see whether it covers business-related activities.

If you’re running a business from home, it may be smart to consider cover like Public Liability insurance, Cyber Liability insurance or a Business Insurance pack. These policies can help cover the gaps your personal insurance doesn’t.

7. How often should I review my insurance policy?

A good rule of thumb is to review your business insurance at least once a year.

But you don’t have to wait for a calendar reminder. Any major change in your business could be a good reason to check your cover. Maybe you’ve added a new service, started hiring staff, taken on bigger clients, or had a jump in revenue. These changes can impact your risk and leave gaps in your cover. Regular check-ins keep your cover up-to-date and give you peace of mind that your business is properly protected.

End your insurance uncertainties with BizCover

And there you have it! Some of your most pressing insurance questions answered.

Business insurance doesn’t have to be confusing or time-consuming. Whether you’re just starting out or running a growing team, BizCover makes it easy to get covered without the usual drama.

With BizCover’s online platform, you can compare multiple quotes from leading Australian insurers in minutes, buy online and get covered instantly. It’s fast, affordable and trusted by over 270,000 small businesses across Australia.