The Right Cover: What Insurance Will Small Businesses Need?

September 15, 2020
Small Business
The imar Difference

The coronavirus outbreak has reminded business owners of one thing: you have to be prepared for anything and everything that could happen. It put all economic movement on hold for months. But now that the country is adjusting to the new normal, businesses are starting to reopen. While you adapt to the circumstances, this is also a good time to revisit your business’s preparedness in different situations.

The model WHS laws state your duty to look after the welfare of your staff, contractors, volunteers and all others who go to your workplace. This means assessing all risks and implementing appropriate control measures for risk management. This also means having proper resources to address any situation that you may find yourself responsible for.

Protect your business from the financial impact of any crisis with the right insurance policies.

Before choosing or renewing your insurance policy, however, take a closer look at your insurance needs. Work out whether it’s something that you would benefit from in the long run, or if a different type of policy is more suitable to protect your assets, earnings, employees and customers.

You can arrange for your policy provider to tailor an insurance package for your unique business needs. But pay closer attention to the three compulsory types of insurance namely workers compensation insurance, public liability insurance and third-party personal injury insurance.

Take time to understand your options before deciding on the best one for your business.

Asking the Right Questions: How Do You Determine the Need for Insurance?

All businesses should consider the need for adequate protection with the right insurance. Even the most careful businesses are exposed to the risk of fire and water damage, theft and robbery, personal injury lawsuits and many other risks that affect your assets due to business liability.

Protect your assets from these risks by investing in a competitive small business insurance package which typically includes these three:

  1. Workers compensation insurance, which protects your employees in case of work-related accidents or illnesses
  2. Public liability insurance, which covers liability to a third party who was injured or whose property was damaged due to your products or services
  3. Third-party personal injury insurance, which covers vehicle-related personal injury claims if your business operates with motor vehicles.

Your choice of insurance policy also depends on other significant factors, such as the sector you belong to, the size of your business and the operational structure of your team. Different businesses will face different types and levels of risks, and knowing what those are will be crucial to the evaluation of your insurance needs.

Ask the right questions to determine which types of insurance can best protect your business.

  • Do you manufacture products for public consumption? If you do, then you may be interested in product liability insurance. This type of insurance protects your business from property damage and personal injury claims caused by your product’s unintentional faultiness or failure.
  • Do you provide services at your premises or in public? In this case, you want to be ready for any possible scenario that involves a client, a customer or any other third party. Public liability insurance covers the cost of claims and protects you from compensation payouts and legal costs.
  • Do you provide professional advice or services? When you give advice or provide services in full professional capacity, there may be a risk of your clients suffering some type of loss. Professional indemnity insurance covers your legal costs and damages if the situation escalates.
  • Does your business significantly operate online? Now more than ever, businesses are going online. The shift makes it easier to reach your audience, but it also makes you more susceptible to data breach and other forms of cyberattack. Cyber liability insurance makes it easier for you to recover.
  • Do you maintain commercial property or an establishment? You may be unable to protect your premises and whatever is in it from insured natural calamities and accidental damage however, you may be able to cover your business from related damages and losses if you consider a tailored comprehensive property insurance.
  • Do you stock products in a facility? Have peace of mind by knowing that a theft insurance policy covers all losses and damages to your products, or other contents of your facility, due to theft or burglary. You may arrange for the policy to cover specific items or all properties in your facility.
  • Do you have equipment that needs protection? Machinery breakdown insurance or electronic equipment insurance might be ideal if your business requires a specific type of machinery for daily operations. It covers any repair or replacement costs in case your equipment breaks down.
  • Do you transport commercial goods? Transit insurance covers losses and damage to commercial goods during shipment within Australia and overseas. This type of insurance covers different modes of transport, such as land, sea and rail, based on how your business operates.
  • Do you use vehicles for everyday business operations? Commercial motor insurance is beneficial for businesses that use vehicles to deliver products or transport materials and equipment on a regularly. It protects you from costs related to motor accidents or vehicle theft.
  • Do you have a team that regularly works for you? Even though you work with a trusted team, you still have to look out for your business first and foremost. Consider investing in employee fraud or dishonesty insurance to protect yourself from losses due to employees’ dishonest actions.
  • Do you employ staff to work at your premises? If you do, workers compensation insurance is compulsory. It provides compensation, treatment and rehabilitation for work-related accidents and illnesses. It applies to your full-time employees and may extend to contractors as well.
  • Do you feel the need to heighten protection of your personal assets? The success of your business relies on the competence of your personal assets. Management liability insurance protects your company and its managers against allegations of misconduct and legislative breaches.
  • Do you have concerns about tax audits and investigations? Consider a tax audit insurance policy, whichprovides protection by covering your tax audit or investigation expenses, which can otherwise cost you thousands of dollars.

Any crisis will affect any business. Although you can’t stop the negative effects, you can mitigate their impact. Insurance is the best form of business protection. But that protection has to suit your unique needs.

Diving Into the Details: What Does a Tailored Insurance Package Mean for You?

Some common types of insurance are compulsory for Australian businesses. But a ‘one-size-fits-all’ package may not cover all your concerns.

The most effective insurance policies are tailored to your unique business needs.

Your insurance policy provider should help protect your assets by basing the package on the type of business you run, the size of your company, the location of your premises and your risk appetite. Your policy should also be influenced by the unique challenges that your industry may encounter.

Consider all your options before purchasing an insurance package. Determine how it can protect your business, your assets and yourself first.

  • Protect all aspects of your business

Insurance encompasses the most important aspects of business, such as management liability, employee fraud and tax investigation. It also protects you from the financial toll of third-party personal injury and property damage cases that result from your alleged negligence.

If you run an online business or an e-commerce site, insurance could enhance your cyber security measures. It can cover product damage while in transit, too.

  • Recover from damage to your assets

The best way to secure the future of your business is to consider insuring your assets. One option might be topurchase an insurance policy that protects you from the financial toll of property theft and damage.

Damage insurance typically covers fire and water damage, natural disasters, malicious damage and other unforeseen situations. Theft insurance may include both employees and third parties.

You may also want to include plant and equipment insurance to minimise work disruptions.

  • Protect your future with personal insurance

The coronavirus situation shows that no matter  how successful your small business is or how efficient your staff is, the risk of unforeseen events will prevent you from earning an income for an extended period. This is where personal insurance becomes relevant.

In addition to your business insurance package, consider adding income protection insurance to the suite of covers that protect you and your employees regardless of the future.

The right cover protects your small business from a major financial blow and from an interruption that could see it shutter.

You could be reopening your business as lockdowns are lifted. Or maybe you’re finally putting plans of expansion into motion. Whatever the case may be, this is a fresh start for your small business. Secure its future success by protecting your assets, revenue and liabilities with a customised cover.

IMAR works hard to protect your business in Australia. Our experienced team will take time to understand your operations, your potential areas of risk and what it could face before we recommend a customised cover. We’ll provide you with a level of cover that suits your sector.

Get the right insurance policy at the right price. Get a quote today.

To the extent that any material on this page may be considered advice, it does not take into account your objectives, needs or financial situation. You should consider whether the advice is appropriate for you and review any relevant Product Disclosure Statement and policy wording before taking out an insurance policy.

Related articles

November 6, 2023
Small Business
Navigating Insurance Policy Changes for Small Business
Insurance is an important aspect of any small business. Whether you’re self-employed or who work for a company, you should…
Read more
Commercial Motor Insurance
July 10, 2023
Small Business
What are the 4 Types of Insurance that all Small Businesses Should Consider?
Whether you’re in construction or martial arts, making sure your small business is covered for unforeseen events is of the…
Read more
July 7, 2023
Small Business
What is the Best Type of Insurance for a Small Business?
There is an abundance of different types of insurance that can be useful for many businesses. But which one should…
Read more