Small business owners know your business is your livelihood, and protecting it helps to protect yourself, your family and your future success. You face a wide variety of risks and challenges, some which you can anticipate, mitigate and prevent.
Others are unpredictable and unpreventable.
Sometimes these events can result in damage to your property or assets, or worse, to people. Most small businesses wouldn’t financially survive a significant event with the resources you have on hand, and that’s where insurance is designed to kick in and play its part.
Below is a list of some of the typical insurances that we would recommend for Australian small businesses:
- Business interruption – can your small business sustain an unexpected closure or disruption? For how long? According to a survey of 500 small businesses, CGU found that 1 in 4 would NOT survive if they had to close their doors for three months due to a major disruption such as a fire or storm. Business interruption insurance covers the shortfall in gross profits caused by the interruption to a small business from insured events. It helps pay ongoing costs and protects your profit margins until you’re back on your feet and operating at the profit level you were before the interruption.
- Commercial vehicle insurance – third party insurance is mandatory if you own a motor vehicle. If your company uses a vehicle for work purposes such as transporting your people or your equipment, you should consider insurance to cover things like damage or theft. If your employees drive their personal vehicles for work purposes, non-owned vehicle liability can protect your small business from being held liable to pay should your employee be involved in a collision.
- Cyber insurance – if you use the internet or a computer in your small business, it’s very likely that you have cyber risk. You are responsible for protecting sensitive and private information about your people or your customers if you are storing it and you could leave yourself exposed if you experienced a breach, hack or even accidental loss of a laptop containing data. Cyber liability insurance covers your small business for the costs associated with data breaches (such as legal costs or forensic investigation).
- Professional liability (also called professional indemnity or errors and omissions insurance) – this type of insurance protects you and your small business against claims for alleged negligence or breach of duty arising from an act, error or omission in providing a professional service that results in a financial loss, injury or property damage. If your small business provides advice or a service, this cover may be relevant to you.
- Property insurance – this is crucial cover to protect your building from damages, theft, fire or vandalism. If you’re leasing your space (i.e. you don’t own your building), property insurance can also cover the valuable assets that you do own, such as the office equipment, computers, inventory or tools that your small business relies on.
- Public liability – this type of insurance covers your small business in the event that damage to property or injury to a person (a member of the public, not one of your employees) occurs on your premises or is caused by the actions of your business.
- Workers’ compensation – if you employ people, you are required to have workers’ compensation to protect them in the event of a workplace-related sickness or injury. Workers’ compensation provides wage replacement and medical benefits to those who are injured while working and protects your small business from facing legal action following an incident.
Hopefully the above is helpful in understanding some of the typical insurances that small businesses might want. Remember that every business is unique, which means you face unique risks and challenges and should get advice from your trusted insurance broker about the type of insurance solution that’s right for you.