As an employer, it is important that you protect yourself against the financial burdens of unforeseen incidents. Therefore, one of the most powerful tools that you can utilise is registering for insurance. The types of insurance that you can register for fall into two categories: legal requirements and recommended. Below is a list of these types of insurance.
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Workers’ Compensation Insurance
As an employer, workers’ compensation insurance is a legal requirement. This is because if a workplace accident occurs then neither the employee nor the business will suffer from any financial hardship. Insurance will compensate an employee who has suffered any physical or psychiatric harm at work. In doing so, it covers the costs of all necessary medical, hospital and rehabilitation treatment. It also compensates the employee for lost wages and non-economic loss. Since this is a legal obligation, it is your duty to ensure that this insurance policy is current and adequate to protect all of your staff.
However, if you are a contractor or a sole trader then these requirements vary. Read about your legal obligations here.
Public Liability Insurance
Public liability insurance is generally optional. Nevertheless, it is suggested that you consider this type of insurance if your business has the potential to cause harm to people or properties. The insurance policy will vary based on the nature of the business and the likelihood of legal action. Accordingly, you may find that a legal health check is necessary to determine whether or not you need this.
Nonetheless, if your business provides any of the following services then public liability insurance is mandatory:
- Accommodation and food services
- Forestry, fisheries and agriculture
- Administration and support
- Art and recreation
- Building and construction
- Finances and insurance
- Media and telecommunications
- Professional and technical services
- Real estate
- Manufacturing
- Transport, postal and warehousing
- Tourism
For information on the specific requirements for each sector, click here.
Professional Liability Insurance
Professional Liability Insurance protects your business from negligent claims. It is designed for businesses that provide advice or services to customers. It will protect you, and your employees, against any legal costs that you may incur from third parties due to negligence or a breach of your professional duties. This is important for a number of reasons. Firstly, it ensures that you are not faced with an immense financial loss if a damage claim is made against you or your employees. Additionally, it protects your reputation and time. This is irrespective of whether or not you are found to have breached your professional duties. This type of insurance is vital in a business like an accounting firm, where there a large number of graduates with less experience. Although the risk of error is higher, you and all of the employees will be protected.
Conclusion
As seen above, there are a number of incidents that you must consider as an employer. While workers’ compensation insurance is a legal requirement, the others are optional. Nevertheless, you may find that some of the insurance types are vital to the business’s operation. Getting a holistic insurance plan will ensure that you have a solid contingency plan in place. As we understand that this will come at a cost, we recommend that you consult one of our commercial lawyers for legal advice on the most suitable route for the business.
