The risky business of insurance

What are the real costs to Australian small business?

Small business owners tend to be juggling many balls – managing clients, cash flow, staff, stock and future planning.

Managing business risk and ensuring that a business can survive unforseen events, should also be top of mind. Yet many small businesses are uninsured or underinsured and the Insurance Council of Australia estimates that 70% of these affected by a major event never recover.

So how does a small business owner make savvy insurance decisions?

Define “must haves”

It’s important to distinguish between ‘must have’ and ‘nice to have’ insurance.

Examples of “must have” insurance:

Public Liability – protects against legal and court costs in the event that someone is injured, or has their property damaged while you are providing a service to them. Every business should have PL

Professional Indemnity – protects against losses for any legal action taken against your business for advice or services you have provided. All businesses providing advice should have PI

Business Insurance – insures your business for financial losses resulting from unexpected events or damage. If you have valuable or substantial assets you should insure them

Cyber Insurance – Protects your business against the expenses and legal costs associated with data breaches, being hacked or the theft of client information. Any business which relies on their networks should have cyber cover

Workers Compensation – provides cash benefits and/or medical care to staff that are injured or become ill as a direct result of their job. Any business with employees are required to have WC

How you buy insurance can save you time and money

Shopping around to compare what’s covered is an important part of the process; there can be hundreds of dollars difference on seemingly identical policies. These days most people choose one of two other options: using an insurance broker or using a free online comparison site like BizCover.com.au.

It is estimated that 40% of businesses now buy their insurance online because it is proven to be efficient, transparent and competitive. Online insurance experts BizCover cover over 2,000 occupations and have over 25,000 clients. They provide general advice backed by an experienced service team.

Michael Gottlieb, Founder of BizCover says, “Within a couple of minutes you can compare policies and prices from a number of different providers online, and instantaneously buy one that suits you.”

Gottlieb’s top three tips to assessing your insurance needs are:

1. Analyse your specific risks: identify what the risk could cost your business and insure against those;
2. Identify your current insurance and assess if there are gaps or insurance you no longer need;
3. Identify if your specific occupation or business has any contractual or legal requirements for insurance