One of the most important ways to protect your business against risk is to carry sufficient insurance. A business insurance policy is available for just about any risk that might be faced by your business. With small business insurance, you don’t have to worry about whether your insurance will provide enough cover if the worst happens.
Business insurance and its importance:
Business insurance is a group of commercial insurance coverages that protect businesses against a variety of work related risks that could result in devastating financial damages and lawsuits. It is taken out by many business owners to ensure they are protected from unexpected events such as theft, fire, equipment breakdown, accidental damage, third party cover, property damage and much more.
Businesses must deal with risk on a daily basis, regardless of their size or industry type. Business insurance is an essential part of managing such risks, and for small business owners who are not insured at the time of the accident, the resulting cost can be tremendous and can often lead to the closure of their business. If you are a small business owner, having business insurance can help you minimise risk and allow you to focus on running a successful business.
Who needs business insurance:
Most small business owners, tradespeople, hospitality operators, professionals and contractors need some type of business insurance to be legal and protected.
Policy features:
Key features of a small business insurance policy include:
a. Cover for various risks
b. Selection of cover of your choice
c. Small businesses like auto mechanics and repair shops, independent contractors, business service environments, business and professionals, and food service and hospitality establishments are eligible to obtain business insurance covers.
Types of small business insurance policies:
Depending on the nature of your business activities, there are a range of insurance policies available to cover you against everyday risks that your business may face. In the event of a such a risk materialising, small business insurance is there to minimise the impacts the event may have on the day-to-day operations of your business, and to also assist you financially. Some types of business insurance policies are mandatory for Australian businesses in certain situations or industries. Common types of business insurance include but are not limited to:
Public & Products Liability
The operations or activities of your business can place people or property at risk of injury or damage. If you are a business owner, it is important to ensure you are covered against such risks as the consequences can quite often be costly and have a large impact upon your business without the correct level of cover. Public and products liability may protect you from such impacts.
Professional Indemnity
If your business or profession involves providing a service or advice, it is more than likely you will require professional indemnity insurance. This type of policy may help protect you against any potential financial loss, bodily/personal injury or property damage resulting from an act, error or omission in the professional service you have provided.
General Property
General property insurance is available to provide you with the assurance that in the event of your equipment being accidentally damaged, you have the resources to be able to replace it as quickly as possible so that your business can continue to operate with minimal disruption.
Material Damage
For many small businesses, damage to your building or property is a real threat. It is therefore important to ensure you are covered in the event of an unforeseen circumstance such as fire occurring. This type of insurance may help to recover the costs associated with replacing the contents of your building and property if it is destroyed under such circumstances.
Theft
To protect your business against potential theft, a policy that provides coverage for stolen contents and/or stock can mean the difference between continuing to operate as per normal or the disruption of the day to day running of your business which can be costly.
Business Interruption
A business interruption insurance policy is designed to potentially provide financial protection for the consequential loss of revenue that may result after an unforeseen circumstance has occurred and disrupted the normal daily operations of your business.
Money
Provides cover for losses associated with money including credit cards, cheques and vouchers to name a few.
Glass
If you are a cafe owner for example, having a shattered glass shop front can not only be a danger for your customers but can also leave your contents exposed. This type of policy may cover you for accidental breakage of fixed glass and the replacement and/or temporary security required to protect your premises in the meantime.
Personal Accident
If you as the business owner, or one of your employees has an accident while at work, personal accident insurance may help to minimise the impact on your business. Key person insurance is another common policy small businesses may choose to engage as it helps to cover the loss of a key member of staff in the company.
List of some common business insurance claims made by small businesses:
a. Slips, falls and other accidents: It is the most common type of claim, but also can be preventable by ensuring the spills are cleaned regularly and walkways are sufficiently lit.
b. Property losses: Commercial property is the biggest asset of any business owner. Although, there is no sure way to prevent property loss, you can ensure enough coverage for your property. This includes your inventory too.
c. Natural disasters: A flood or a fire can end your business. So, it is a good way to develop a risk management plan to prepare for a possible disaster.
d. Harassment: Harassment is a serious problem in small businesses. Getting a business liability insurance can protect the business from any such lawsuits.
