Operating your own business often means wearing many hats and making important decisions about your business every day. From managing the books to looking after your staff and everything else in between there is a lot to think about.
While the thought of sorting out your business insurance may feel like an overwhelming task, it is a one of the vital areas of your business that needs your attention.
Just like any successful business, there are business plans in place to help ensure the longevity and stability of your company, and this is where business insurance comes into play. In our article we explore the benefits of business insurance and how it can protect your business for the long-haul.
1. It can provide financial peace of mind
When you are first starting out and setting up your business, it can be like a rollercoaster. You’ve got lots of aspects of the business to handle and can still feel unsure whether things are really going to take off like planned. With everything going on, the last thing you need is the worry of what to do if your business was involved in an accident or incident.
All it takes is for a customer to slip or trip at your business premises, or for you to accidentally damage their property to cause a claim. It’s not only the financial impact that you need to consider, but the effect upon your business reputation too.
One of the common types of business insurance to consider is Public Liability insurance*. It provides peace of mind and is designed to provide 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.
This is a quick overview of what is typically included and excluded in a Public Liability insurance policy:
What is typically included?**
Compensation for:
- personal injury suffered by a third party (e.g. a customer, supplier or member of the public); and
- damage to property owned by a third party due to your negligent business activities
- legal and defence costs associated with a covered claim
What is typically not covered?
- Injuries to your employees
- Damage to your own property
- Costs of rectifying faulty workmanship
- Professional negligence
- Contractual liability
- Events occurring before or after the policy period
2. It can help keep your business going
If your business relies on specialised equipment and assets to get the job done, can you imagine the havoc caused if something were to happen to them, causing a halting stop to your business operations?
Depending on the type of business you operate, there are certain assets that may be essential. For example, tradies require their tools, cafes need fridges and coffee machines, and hairdressers need scissors to do their job. Fortunately, there are various types of coverages available to help protect your business assets. Here’s a quick look at some of the main ones:
Contents insurance*: Covers your business contents or stock if they were damaged in a fire, storm or due to malicious damage or some other defined event listed in the policy.
Money cover*: Protects your business money (which will include not only cash and cheques, but also items such as lottery tickets, gift cards, postal orders and stamps) by providing cover for loss or damage to it whilst on your premises or in transit.
Portable Equipment*(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.
Machinery Breakdown*: This insurance covers the cost to repair or replace specified machinery following a breakdown.
Electronic Equipment*:Electronic equipment insurance covers the cost to repair or replace specified electronic equipment following a breakdown. You can also choose to insure the additional costs to your business or business interruption expenses caused by a breakdown of electronic equipment.
Goods in Transit*: Covers subject to a specified limit, the loss or damage to goods owned by you which are damaged in transit by road in Australia in a vehicle owned or operated by you and caused by insured events such as collision, fire, flood or theft by forcible entry.
3. It can help to safeguard your personal assets
As much as we hope that it never happens, the reality is any kind of business is exposed to the potential risk of a claim occurring. All it takes is a fire to damage or destroy your business premises or an upset client to claim negligence to possibly cripple your business. Could you afford to not have some form of protection in place?
Take a moment to consider the cost if, for example, you had to repair or rebuild your business building or cover the related costs for a client’s claim against you for negligence.
You’ve worked hard to get your business up and running, the last thing you want to do is jeopardise your personal assets and savings to pay for a claim and its related expenses. Unfortunately, this can be a reality for many business owners who haven’t protected their business with insurance.
Investing in business insurance helps protect your business, your back pocket and your reputation, something all business owners need to consider.
4. It’s there for when disaster strikes
Disaster doesn’t necessarily only refer to fires or storms, it can be anything that causes disruption to your business, throwing it into turmoil. It can arise from a client claiming your business didn’t complete its agreed services to the expected standard, experiencing the theft of expensive equipment to accidentally causing damage to a customer’s property.
This is where it is important to understand the types of risks your business may face and what kinds of insurances are going to be the most appropriate to have in place. Different businesses have different needs and not every kind of coverage is going to be suitable.
Once you have the appropriate types of cover in place, you can rest easy knowing that you have taken the steps to insure your business, helping your business stay in the game.
5. It can help reduce down-time
If your business had to close up shop due to an insurable event, could you still manage to earn an income and keep your business going? Not only do you have to worry about the paying the rent or mortgage bills, but there’s the staff wages, and utilities to think about too.
That’s where Business Interruption cover* can provide some relief. 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 also designed to assist your business to recover from an insured event by paying ongoing expenses.
Please keep in mind that Business Interruption cover is an additional cover option which is usually available when you take out a Business Insurance policy.
6. It may help protect reputation
Your business reputation is priceless, so the last thing you want is anything to damage or destroy it. No matter how much pride and care you may take in your business, things can still go wrong. Protecting your reputation is another aspect of your business that business insurance can lend a helping hand with.
These are some of the types of coverages you may need to consider:
Professional Indemnity insurance*
If your business involves providing professional advice and services then Professional Indemnity insurance is a no-brainer. It 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.
Professional Indemnity claims can arise from simple things like giving incorrect advice, a miscalculation, incorrect diagnosis or treatment.
Management Liability insurance*
If you own or are engaged in the management of a company, there are specific responsibilities which may leave you personally liable if you breach them.
Management liability insurance* protects directors and officers and the insured company itself from the many exposures relating to the management of a company.
While Professional Indemnity insurance provides cover in relation to the advice and services you provide to your clients, Management Liability insurance covers the risks that occur when running your business.
This is an example of some of the areas of your business Management Liability insurance may provide cover for:
- OH&S dramas
- Unfair Dismissal
- Sexual Harassment
- Statutory breach of duty
- Defamation
- Statutory fines & penalties
7. It gives you the confidence to plan for the future
Having the right kinds of business insurance in place not only helps safeguard your business today, but it helps provide stability, allowing you to confidently plan for the future. While you may not be able to control all aspects of your business, taking the proper steps to protect your business is one thing you can do.
If you would like to find out more about different business insurance options to protect your business contact BizCover today. We provide multiple quotes from some of Australia’s leading insurers, so you can compare and get covered in minutes.
**Many public liability policies also provide cover for product liability.
