5 Insurances you should consider for yourself and your business
Please note: Perfectly Organised NT is not an insurance broker. These are general statements. Please do your due diligence and contact professionals to get sound legal advise tailored to your specific needs.
Insurances are often seen as an expense without any value to it. While most people in general and business owners in particular dislike the idea of spending money on insurances, the true value can be unmeasurable when they are truly needed.
Business owners are often not sure what insurances they are required to have and which ones are highly beneficial for the type of business they are running in Australia.
Generally, protecting your business, your customers and your income is down to having the right insurances.
Types of insurances
Insurances you / your small business are required to have by law (e.g. workers’ compensation insurance)
Insurances you / your business may require because people you deal with may require it (e.g. public liability insurance)
Insurances to reduce business risk
Insurances to protect business related items (e.g. assets, earnings, customers, employees)
Where can you get advice on types of insurances?
Licenced insurance brokers
Licenced business advisors
Insurers
business.gov.au/risk-management/insurance/business-insurance
Insurers and insurance broker are also able to offer packages tailored to your small business needs.
Professional financial advice is not mandatory but is highly recommended when it comes to picking the right insurances for your business. All below listed insurances are specific to Australia.
Workers’ Compensation Insurance:
As an employer, you must have workers’ compensation insurance to cover you and your workers against financial hardship due to an accident or illness. This specific type of insurance is compulsory and regulated by state and territory governments in Australia.
There is no shopping around for a cheaper option with this insurance. The insurance cost is based on how many employees your business has during a year, type of employment and income.
Sole traders also need to consider that they are usually not covered under workers’ comp insurance and they need to sort personal insurance to cover illness, death, disability or similar.
Professional Indemnity Insurance:
If your business provides any form of professional advice, you are very likely to need Professional Indemnity insurance.
It will cover your business in case of legal action due to your professional advice.
Public Liability Insurance:
Public liability insurance covers you and your business for third party death, injury or damage.
Most business will need this insurance which comes with different options, covering from $5M up to $20M.
Product Liability Insurance:
If you sell, supply or deliver goods than product liability insurance covers you if any of your products fail.
Usually, product liability is incorporated into public liability insurance.
Business Vehicle Insurance:
A minimum of third party personal injury insurance is compulsory for any business motor vehicle. Third party insurance is usually part of the vehicle registration fee. However, business vehicles normally carry products, tools, etc. and may require additional insurance to fully cover the vehicle and its contents.
Personal or loss of income insurance:
There are many types of personal insurances available, which can be specifically tailored to your personal needs and requirements.
Consider income protection, life insurance or disability insurance.
Loss of income can be protected partially with an insurance covering business interruptions and employee dishonesty.
Asset insurance:
From buildings & contents insurance to cover from burglary, deterioration of stock or goods in transit - there are endless options available to cover the assets of your business.
Simply put, does your business have the money on hand to replace any asset in case of emergency? If not, an insurance might be the right choice.
Cybercrime Insurance
Technology and the world wide web are essential parts of any business nowadays. Protecting your small business from cybercrime can be just as important as protecting your physical assets.
There are many ways of portecting yourself and your business in Australia with the help of insurances. Start small, but keep it regularly and don’t wait until something happens. Strategic planning and periodic reviews are a great start to implement those strategies.
Perfectly Organised NT can assist with a financial review and strategic business planning & management. Find out more!
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