As a small business owner, you already know there are plenty of ingredients that go into making a small business successful. Like a strong marketing plan, great customer service and organised systems in place just to name a few!
But one of the major things all small business owners need to consider is protecting your business for the long haul by having safeguards in place- like business insurance.
There are thousands of different types of small businesses helping turn the cogs of the Australian economy from our trusty tradies to personal trainers keeping us fighting fit, bookkeepers to keep the accounts squeaky clean and dog groomers making our fur babies look glam.
While they all may be very different types of businesses offering different services, they all have something in common and that’s the real risk of a claim occurring. That’s why it is important to understand the different types of business insurances available and how they can protect your small business and its unique needs.
What is business insurance?
Business insurance is designed to protect your business from potential losses caused by certain insurable events that may occur during the course of your business operations. There are many different types of business insurances available to protect your business from a variety of risks, for example accidentally causing injury or damage to a third party’s property (Public Liability insurance*), damage to your business assets (Contents*) and many more.
Examples of when your business may need business insurance
It may feel like an overwhelming process when it comes to knowing what type of business insurances your business may need to help protect it. These are some examples of when your business may require business insurance:
- If you work with clients and are interacting with their property you may need to look at protection against claims from third parties for accidental personal injury or damage to their property. This is usually covered by a Public Liability insurance policy
- When you take your tools of trade with you to operate on a work site or at a clients place for example, you may want some form of protection for your tools of trade in case they are lost, stolen or damaged
- It is a common request that certain types of business insurances may be required when taking on a contract
- Something no small business is immune from is the potential financial implications of a claim. Business insurance can provide peace of mind with financial protection in the event you are faced with a claim
- Dealing with clients means there is always a chance of a claims from unhappy clients for the professional services or advice you may have provided.
- It may also be a requirement to have certain kinds of business insurance in place as part of your rental agreement e.g., Public Liability or Glass cover.
- To become a member of certain professional memberships you may need a certain level of Professional Indemnity insurance in place to join
Why does my small business need business insurance?
Regardless if you are a sole trader or operating a small company, businesses of all shapes and sizes need to consider the importance of business insurance if you want to be around for the long run.
Most of the time, many small business owners aren’t even aware that are exposed to certain risks which could disrupt their business operations. Even if you take all the care in the world to ensure a safe working environment, unexpected accidents and incidents can still happen.
Business insurance provides a financial safeguard in the event that you were faced with a claim. Some claims could cause a major disruption to your business, enough to close the doors for good, a worry that no small business owner wants to be faced with.
What are some of the different types of business insurances?
Below you will find a snapshot of some of the main types of business insurances and what they provide cover for. Remember that you may not require all types of business insurance, it’s a good rule of thumb to focus on protecting your business from the risks your unique business may be challenged with.
Public Liability insurance
Public Liability insurance provides protection* for you and your business in the event a customer, supplier or a member of the public are injured or sustain property damage as a result of your negligent business activities.
Public Liability insurance is one of the major types of insurances that many types of business need to think about. It is applicable to many types of businesses, especially those that have interactions with third parties from clients to members of the public and suppliers.
Professional Indemnity insurance*
Professional Indemnity insurance is designed to respond to claims against your business for losses as a result of actual or alleged negligent acts or omissions in the provision of your professional service or advice. Professional Indemnity Insurance will also assist with the legal costs associated with responding to or managing claims which are covered by the policy.
Some examples of what may result in a Professional Indemnity insurance claim include:
- Providing the wrong advice
- Incorrect diagnosis or treatment
- A miscalculation
Business Insurance* is an insurance package designed to provide cover for your business contents, stock, tools and commercial premises when an insured event occurs (such as fire, storm, theft or even accidental damage).
Some of the different types of Business Insurances may include:
Contents*: Cover for loss of or damage to items such as business equipment, stock, plant and machinery, records and furniture belonging to you at the insured location.
Building*: If you own the building from where you operate your business this Covers you for damage to your building due to fire and other perils listed within the policy wording.
Portable Equipment*: Portable Equipment insurance (also known as General Property insurance) covers you for loss and damage to items of portable equipment associated with your business. These can include tools of trade and items of stock.
Tax Audit*: If your accounts are audited by the Australian Tax Office, you may need to hire external accountants to assist in the process. Tax Audit Insurance covers a business for specified costs in responding to an official tax audit.
Business Interruption cover provides protection 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 is designed to help your business recover from an insured event by paying ongoing expenses (such as wages or rent).
Running a small business is a rollercoaster of highs and challenges. It involves careful planning and many different tasks to keep your business up and going. At times it may feel like a balancing act trying to get it all right, but one less thing you need to worry about is shopping around to get your business insurance sorted.
Experience drama-free business insurance with BizCover. We understand small businesses and understand how busy life gets, so we’re here to the stress out of arranging your business insurance. Choose from multiple quotes from some of Australia’s most trusted insurers, select your policy and get covered in minutes. There’s no messy paperwork or insurance jargon, just insurance made easy. Get a quote today.
* This information is general only and does not take into account your objectives, financial situation or needs. It should not be relied upon as advice. As with any insurance, cover will be subject to the terms, conditions and exclusions contained in the policy wording.