Business Insurance in Australia – What Should You Consider?
It’s not a big secret that running a business is highly challenging with your own finance always at risk, unlike when you are employed and get a regular salary irrespective of how much hard work you put in. In such a situation, it’s logical to minimise risk and uncertainty and protect your valuable source of income.
A great solution to this is business insurance which can protect your machinery and equipment you need for your business. It also can ensure that you, your staff and other people with whom you deal with for your business are protected from the risk you have as a business owner.
Business insurance bought with the help of a good insurance broker can also provide you financial support if you have to stop running your business due to an unforeseen circumstance such as a natural disaster or fire.
Have you ever thought of how you would face a situation in which your equipment, stock or even your premises were damaged or destroyed beyond repair? Could you run your business any further? Could you recover from the monetary loss?
To protect businesses from such potential losses, insurance companies provide a range of insurance products which vary according to the types of businesses e.g. small businesses, professionals, tradespeople, hospitality business etc. Depending on your business type you should find a correct type of business insurance.
Types of Business Insurance
You can change a business insurance policy and customise it to your specific business requirements. There is a wide range of cover available that can be tailored specifically to suit the needs of business owners. For small businesses, there is no one-size-fits-all solution of insurance, so, you have to look for a policy that can meet your needs and if there are provisions to change a policy according to your needs.
Compulsory Business Insurance
Two types of insurance are obligatory for almost all Australian businesses.
1. Workers’ Compensation
A Workers’ Compensation Scheme is operated by every state and territory. This scheme offers protection to employees in the event of sickness or accident. The requirements differ from jurisdiction to jurisdiction. You can visit the workers’ compensation authority of your state or territory to know more about this.
- Australian Capital Territory: www.worksafe.act.gov.au
- New South Wales: www.workcover.nsw.gov.au
- Northern Territory: www.worksafe.nt.gov.au
- Queensland: www.workcoverqld.com.au
- South Australia: www.workcover.com
- Tasmania: www.workcover.tas.gov.au
- Victoria: www.worksafe.vic.gov.au
- Western Australia: www.workcover.wa.gov.au
2. Compulsory Third Party
If you run a vehicle, Compulsory Third Party car insurance protects you from personal injuries caused by your car. This kind of insurance is required while registering and running a vehicle.
To get protection from other risks, you should consider other types of automobile insurance cover, such as damage to property or vehicle of your own or another person.
Each state and territory has a different CTP scheme. You can know more about it by visiting the vehicle registration authority of your state or territory.
- Australian Capital Territory: http://www.treasury.act.gov.au/compulsorytpi/index.shtml
- New South Wales: www.maa.nsw.gov.au
- Northern Territory: http://www.tiofi.com.au/wps/wcm/connect/tio/website/mac/
- Queensland: www.maic.qld.gov.au
- South Australia: www.mac.sa.gov.au
- Tasmania: www.maib.tas.gov.au
- Victoria: www.tac.vic.gov.au
- Western Australia: www.icwa.wa.gov.au
Important Kinds of Business Insurance
Majority of types of business insurance are centred on revenue and assets, personnel and liabilities. Here are some important sorts of business insurance.
Businesses that sell, deliver or supply goods, even though in the form of repairs or services may need protection against claims of products causing injury, damage or death.
Public Liability Insurance
Public liability insurance protects your business from compensation costs and legal costs that you might need to pay if you are liable to someone because an injury or death, damage or loss to their property, or financial loss caused by you because of your negligence.
This insurance protects you against loss or damage to buildings and stocks resulted from accidental damage and insured events.
This insurance covers the replacement costs of internal and external glass and also specified glass objects.
Deterioration of Stock Insurance
This insurance covers businesses from the loss caused by deterioration of refrigerated, chilled or frozen goods and stock if a freezer or refrigerator unit that stores the goods stops working and so, items are spoiled.
Business Interruption Insurance
This type of insurance protects businesses that suffer a loss owing to stoppage of trade for a period due to damage or loss from a natural disaster, fire, flood or other insured interruptions.
Tax Audit Insurance
This protects you against the costs incurred by your registered tax agent or accountant when notified by the Australian Taxation Office to perform an investigation or audit into your tax liability.
Mandatory Motor Vehicle Accident Personal Injuries Insurance
This insurance is required by every state and territory for all business or company vehicles.
Commercial Vehicle Insurance
In this insurance, there are many different policies; hence you’ll have to ensure you know the options before buying one. The most common options are:
- Third party, theft and fire
- Third party property damage
Theft and Burglary Insurance
Theft and burglary insurance usually protects your business against damage or loss to your contents or stock if another person trespasses your premises or gets into your premises deceitfully. This insurance generally doesn’t protect you against cash losses, for which you may have to get a separate cover.
This insurance protects you from the theft of money in your premises, at your residence or in transit.
Employee Fraud or Dishonesty Insurance
This insurance offers protection against dishonest or fraudulent actions performed by employees that directly cause loss of goods, money or negotiable instruments.
Professional indemnity insurance covers you in the event of a legal action against you if another person suffers a loss after acting upon your professional advice or because of receiving your service.
Workers’ Compensation Insurance
This is compulsory in all states and territories for all businesses with a specific number of employees.
Computer and Electronic Equipment Insurance
This protects you from the loss caused by accidental loss or damage to computers and other electronic equipment and data.
Thus, you can see that you have so much to consider while buying insurance protection for your business. But a careful study and thought will result in proper decision making which will give you true peace of mind for years to come.