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If you’re like most small business owners, you spend a lot more time running your business than worrying about insurance.
But you know insurance is important right? After all, there’s no point putting so much blood, sweat and tears into your business if you could potentially lose the lot.
So to keep things simple we’ve put together a list of the top 5 forms of small business insurance that you should know about.
Keep in mind that this list is definitely not a replacement for proper advice from an insurance broker, but it should at least get you thinking.
1. Public liability insurance
The nightmare scenario for most small business owners is not having enough money to pay the bills, and then having the business go under.
Of course this would be a disaster, but a worse scenario would be for your business to be responsible for the death or disablement of another person.
Just imagine if your business activities resulted in someone’s death? The damages awarded against you could be well into six figures, and potentially over one million.
For most small businesses this wouldn’t just see your business go under, but could potentially also see you lose your house and tip you into bankruptcy depending on the circumstances.
Even a lesser injury could cost your business tens of thousands in damages.
It is this situation that makes public liability insurance so important for a small business.
If your business is found to be responsible for death or injury to another person, your public liability insurance can cover the costs up to your maximum sum insured.
Not only does public liability cover personal injury and death to others, but it also provides the same cover for property damage caused as a result of your business activities.
Glass coverage is an extremely straightforward type of insurance, but if you operate from leased premises it is absolutely vital.
Virtually all lease agreements will require that you have two forms of insurance; public liability and glass.
Glass insurance covers all of the fixed glass within your premises, regardless of whether it’s part of the building, such as windows and doors, or your own fittings such as glass displays.
The types of glass which are not covered are those which are designed to be portable, such as drinking glasses and vases etc.
One of the biggest investments in your business will be all of the physical assets you hold.
This could be anything from the stock and shelving in your retail store, to the machinery and equipment in your factory.
When we talk about property insurance in this case we are actually talking about a number of different coverage types.
These different types include business contents, general property, plant & equipment, stock, food deterioration and more.
The specific type of property cover you require will depend on the type of property you are insuring.
4. Professional indemnity
Whether or not you require professional indemnity insurance really depends on whether or not you are providing expert advice to your clients.
Typical occupations and business types requiring professional indemnity including accountants, doctors and financial planners.
In recent years however it has become apparent that many more occupations could potentially require cover, especially since more people are willing to take legal action these days.
If any of your clients see you as a provider of professional services or expert advice, you may be exposed to legal action if your advice results in them suffering a loss.
The best option here, and with most forms of insurance for that matter, is to speak with an insurance broker who has a good understanding of professional risks.
5. Income protection
The final type of insurance on our list is not technically a form of business insurance at all.
Income protection is actually classed as personal insurance, but it is also one of the most important forms of insurance that a small business owner could hold.
As a small business owner you may not have access to sick leave or workers compensation, so if you cannot work due to injury or illness, you could find your income drying up very quickly.
Income protection for the self-employed is a great way to protect yourself and your family in the event that you cannot work in your business for a period of time.
Unlike the other forms of insurance mentioned in this guide which are looked after by insurance brokers, income protection is looked after by financial advisers.
When choosing a firm to look after your insurance needs, it could be a good idea to use one which has access to both an insurance broker and a financial adviser.
We can put you in touch with the right people to talk about all of the forms of cover listed in this guide.
With so much at stake, we very strongly recommend that you seek professional advice on your small business insurance needs rather than attempting to do it yourself.