Running a business isn’t always easy. Even when you’ve complied with all the legal requirements, unexpected things can still happen. This is where having insurance can help your business bounce back from any unexpected events. However, insurance comes in many different forms and it can be difficult to know which type of insurance suits you*. The right insurance will be reflective of your business’s type, size and also the legal requirements of the industry you operate in. We have described below seven of the more common types of business insurance.
1. Public Liability Insurance*
As one of the most common types of business insurance, public liability insurance covers you and your employees if your business activities (including your products) cause injury or damage to a third party. For example, having public liability insurance will cover compensation payments and legal costs if a customer sustains an injury whilst shopping in your store.
2. Professional Indemnity Insurance*
Professional Indemnity (PI) protects those who work in professional industries against liability. They also protect against the legal costs arising from claims involving an allegation of breach of professional duty. Your Public Liability policy does not provide protection against these types of allegation. Professional Indemnity Insurance is applicable to many professions, such as lawyers, consultants, engineers, architects, and accountants. In many professions it is a requirement to hold a PI policy in order to render your services.
3. General Business Insurance*
General business insurance is a package that enables you to cover different parts of your business. These include property, contents, portable equipment and glass. This type of insurance will help protect your material assets if events such as natural disasters and robberies occur. Having insurance which protects your contents also means that office equipment such as laptops, phones and printers will also be protected.
4. Business Interruption*
It’s one thing to have insurance which covers your business if your assets are stolen or damaged, but sometimes events may occur which result in your business not being able to trade at all. However, even if your business isn’t open, you’ll still have to manage many of the overhead costs involved with running your business. This is where insurance which covers you for interruptions to your business can help. Having this type of policy can cover you for income lost and additional costs you incur whilst keeping your business afloat.
5. Management Liability Insurance*
Senior Managers and Directors of a business have huge responsibilities, but things can go wrong from time to time. If someone on your management team makes a serious mistake, management liability insurance can protect your directors and your company. Some common situations where this type of insurance will cover you and your team include:
- Harassment and unfair dismissal claims
- WH&S issues
- Penalties for non-compliance
- Other legislative breaches
- Employee fraud and theft
6. Cyber Insurance*
Most businesses these days have websites where customers can make purchases or find out important information. However, business websites are also often the target of cyber attacks due to the valuable customer information they hold. Beyond having a privacy policy on your website, it’s also a good idea to consider having cyber insurance to compensate you if your website gets hacked or a data breach occurs. Cyber insurance will cover you for business interruptions due to a hack or breach, as well as for fines and penalties and claims which arise from a privacy breach.
7. Tax Audit Insurance*
Many businesses dread the moment they are told their business will be audited. However, tax audits are becoming more frequent for small businesses, with the ATO cracking down on businesses which aren’t reporting their taxes correctly. Tax Audit Insurance covers professional fees incurred by your business in responding to a tax audit. Costs can very quickly escalate when hiring accountants and similar professionals to help you get your financial records together, so having insurance to protect your business if this happens can make a huge difference.
Conclusion
Risk minimisation is an important element of running a business, and one of the best ways you can do this is by being insured. However, as with any other type of insurance, it’s wise to compare different business insurance policy types to make sure your policy is the right fit. Whether it’s protecting your business online through cyber insurance or having a safety net if your business experiences a severe disruption, being adequately insured will give you peace of mind to keep doing what you do best if your circumstances suddenly change.
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Browse now*As with any insurance, cover will be subject to the terms, conditions and exclusions contained in the policy wording. The information contained on this web page is general only and should not be relied upon as advice.
