When starting up a business, there’s often so much to do that the importance of taking out business insurance might not even cross your mind. But there’s actually a lot to be said for the peace of mind that business insurance brings with it. So what do you need to know?
What types of business insurance are there?
There is a huge range of business cover options available in Australia. Depending on what you need, you can take out any of the following:
- Professional indemnity insurance. This is for professionals who offer their expertise as a service to clients.
- Public liability insurance. Designed for businesses that have a physical premise, to cover negligence.
- Management liability insurance. Provides cover for businesses with key stakeholders.
- Voluntary workers cover. For businesses that solely rely on volunteers.
- Construction insurance. This is for companies in the construction industry.
- Business expenses insurance. Most SMEs are eligible for business expenses insurance. It’s basically for companies that rely on a main business owner.
- Cyber liability insurance. Businesses with online data or that rely on software should consider cyber liability insurance.
- General liability insurance. Provides cover for accidents and illnesses that take place on the premises.
- Income protection insurance. This protects employees from loss of income in the event of an unexpected illness or injury.
What’s actually covered?
Business insurance basically ensures that in the event of a serious setback, you can receive coverage for any unexpected costs that arise. This could include costs associated with property damage caused by fire, explosions or theft as well as costs incurred by legal claims or disputes made from third parties for damages or an injury that takes place on your premises.
Some business insurance policies extend to protect key team members. If a key employee is suddenly lost, you should be able to receive coverage for this. Similarly, if a sudden serious illness or injury arises that leaves you unable to work for an extended period of time, business insurance can help you cover unexpected costs.
The financial burden of footing the bill for these setbacks could be so great that your business might not be able to afford it. This is where business insurance comes in. Depending on how much coverage you opt for when you take out your policy, you should be eligible for some kind of benefit to help cover the costs.
What are the downsides?
Business insurance isn’t for everyone. It can be expensive (depending on the level of cover you’re after) and there’s no certainty that you’ll need it. However, the reality of business is that you can never really know or predict if or when things will go wrong, so business insurance is something that should be considered by everyone.
Unexpected setbacks can arise at any time and there’s no certainty that you’ll be completely prepared or able to afford the damage control that may be necessary. Sometimes it’s nice to have a bit of peace of mind.