Small businesses are the engine of Australia’s economy. Small and medium-sized businesses employ 4.8 million Australians (44 per cent) and are significant GDP contributor.
Insurance is an essential part of running a successful company, but it’s not just about protecting yourself from liability; it also allows you more control over what happens if something goes wrong financially or technically that interrupts day-to-day operations.
You might not think that you need small business insurance, but it is vital for your company. Small businesses may face more risk than big companies because they have less financial backing and are often run by one person. Small business insurance is a topic of great detail and complexity.
There’s more than just one type of small-business insurance out there; what kind you need will depend on the nature of your company or organisation, as well as its specific needs. There are general types such as liability coverage which covers lawsuits by people injured because of something related to your work (such as slip-and-fall accidents), property damage from storms or fires caused by faulty wiring, theft due to robbery at an event you sponsored, etc., but it also might include specialised policies like cybersecurity. In this post, we’re going to cover some basic concepts that may help simplify your decision process for small business owners looking into protecting their assets.
Business Interruption Insurance
Most people have never heard about business interruption insurance, but it can protect you from certain catastrophic losses to your company if something happens such as fire, earthquake, vandalism or theft ̵(especially valuable for those who operate their business from home). It is just one type of coverage that may help when disaster strikes, and most other types will not cover these dire circumstances.
Product liability insurance
Product liability insurance covers personal injury, property damage and other losses caused by a defective product. Product Liability insurance is designed to help when your products cause someone to sustain personal injury or property damage. It also covers you if someone gets sick from food or drink they consume on your premises.
Professional liability insurance
Professional liability insurance is for professionals such as doctors, lawyers, accountants and architects. Professionals who are experts in a specific area require this insurance because general liability insurance does not cover against claims arising out of business, such as negligence or poor design.
– Most small business owners are not aware that the major difference between commercial and general liability insurance is their respective exposure limits: $100,000, for example, for a typical commercial policy versus $500,000, for example, for a typical general liability plan. The higher limit will cover more potential damages in case of an incident involving bodily injury or other losses for which they might be responsible from day-to-day operations at work (e.g., slip & falls).
– While all businesses should consider having some form of coverage to protect themselves against lawsuits arising out of professional negligence, this type of protection may also come into play if you provide goods/services not related to your main line of business.
General Liability Insurance
General Liability Insurance helps cover a company’s potential losses from lawsuits or claims brought on by bodily injury to property damage caused by the business. It provides protection in situations where an employee causes harm through their job duties but also includes other coverage, such as outside contractors performing services at your office building when they injure someone else while there.
Professional indemnity covers breaches of professional duty, including misleading and deceptive conduct. It is designed to protect you against the financial and legal risk of a claim or lawsuit. Having the right level of insurance cover is just as important as having the right type of insurance. Your business needs to make sure it complies with legal requirements.
Know What You Are Covered For!
Fact: Your homeowner’s policy will only protect your home and its contents, but it won’t provide protection for the building or any of the equipment in that building if it’s a small business. This is why many people use something called an “All Risk Policy.”
An all-risk insurance policy covers and protects from all risks or perils that could damage your home or contents and personal property.
The amount of risk a small or large company is taking on, as well as the perceived value of their property and assets, needs to be determined when establishing an appropriate level of commercial coverage. This means it’s important that you do some research before deciding what type of policy would work best with your business plan because not all policies are created equally.
In other words: ensure yourself adequately so that if anything goes wrong, you’re covered!
This can help avoid costly consequences down the line, which could potentially put your business in jeopardy and even lead to bankruptcy (which we don’t want!). Always get professional advice from someone who knows what they’re talking about.
How Much Is Small Business Insurance?
The cost to insure a small business can depend on many factors, including your industry and the location of the business itself. Some businesses may qualify for lower rates due to their low risk or because they have been in existence longer than other companies without any claims filed against them. Additionally, you can save money by bundling your policies with one provider instead of going through numerous providers separately.
Insurance is an essential aspect of running a successful company, but it’s not just about protecting yourself from liability; it also allows you more control over what happens if something goes wrong financially or technically that interrupts day-to-day operations.
Speak to TBI today for expert advice on what types of insurance your business needs to ensure you are covered for anything that can go wrong.