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Help get your business insurance up to scratch

3-minute read

For every business owner, cash flow is the beating heart of your operation. But without adequate safeguards in place to protect against the unexpected, businesses can quickly find themselves floundering – or even failing. That’s why it’s essential you have business insurance to help cover your potential losses.

Help get your business insurance up to scratch (PDF 82KB)

Key take-outs

  • More than 1 in 3 business owners only check their insurance policy if there’s a change in their premium.
  • There are a number of compulsory insurance requirements for business owners in Australia.
  • To help get complete coverage, it’s worth investigating a variety of insurance options to keep your assets protected.

Are you checking your business insurance regularly?

Australian business owners are, by and large, on top of their obligations when it comes to insuring themselves. If you're one of these, well done. You've taken the first step to safeguarding your business.

But just because you’ve taken out a policy, it doesn’t mean it’s the right fit for your business. This could also be the case if you haven’t checked your policy in a number of years.

The 2018 SME Insurance Index found a number of trends in business owners who rarely review their insurance policy once it’s instated:

  • 37% of SMEs only review if there’s a change in premium or an incident has occurred.
  • 26% of SMEs only review their insurance when a significant business change occurs.
  • 16% of SMEs claimed they ‘set and forget’ their insurance.

Rather than finding out your current policy doesn’t cover all the damage you’ve incurred after an even, make it a point to review your insurance policies at least annually, and update them accordingly.

Compulsory insurance requirements

There are three forms of mandatory insurance that may be applicable to your circumstances. If you don’t have the relevant insurance, you run the risk of severe fines and even prosecution if a claim is made against you:

  • Workers’ compensation: If you employ anyone in your company, this insurance is mandatory.
  • Public liability insurance: Depending on your industry type, this may be mandatory as it covers you for third-party death or injury.
  • Third-party personal injury insurance: Sole traders aren’t exempt from compulsory insurance – if you own a motor vehicle and use it for work, you must pay third-party personal injury insurance. This is usually factored into your vehicle registration fees.

There are a number of additional insurance options that could help protect your precious assets and keep your business running smoothly in the event of an unexpected incident.

Could these additional insurance options protect your business?

It’s important to factor in your business type and your company’s exposure to risk while exploring additional insurance options.

Different businesses will have their own specific requirements, so it’s best to get professional advice before committing to a particular product.

The below are three common additional insurance options that may be offered by some insurers.

  • General liability: Covers against legal liabilities in the event of personal injury, property damage or advertising issues.
  • Commercial crime: Protects against fraud, theft and extortion from employees and outside threats. Depending on your policy, it may also cover costs associated with lost interest and data restoration.
  • Professional indemnity insurance: Covers you if you or your business makes an error, omission or act that leads to negligence or breach-of-duty damages.

There are a number of additional insurance options that could help protect your precious assets and keep your business running in the event of an unexpected incident.

Business insurance is a vital tool to help protect your company’s day-to-day operations and could help you get back on your feet if the worst happens.

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Things you should know

This information does not take into account your personal circumstances and is general. It is an overview only and should not be considered a comprehensive statement on any matter or relied upon. Consider obtaining personalised advice from a professional financial adviser and your accountant before making any financial decisions in relation to the matters discussed in this article, including when considering tax and finance options for your business.