Business insurance protects the assets, equipment and goods that you require to operate your business. All businesses in Australia must have Worker’s Compensation to cover employee injuries and Third Party Insurance for their commercial vehicles. Beyond that, you will need to consult with an insurance broker to determine which non-compulsory insurances make financial sense for your business. If your business is at risk of suffering a loss, the premiums paid for insurance often pale in comparison to the potential consequences of operating uninsured.

What insurances are available to me?

In addition to the compulsory insurances, there are many options available to protect business assets and income. These include:

• Professional indemnity insurance
• Property insurance
• Public liability insurance
• Product liability insurance
• Theft and burglary  insurance
• Money insurance
• Commercial vehicle insurance
• Tax audit insurance
• Business interruption insurance
• Stock insurance
• Employee fraud insurance
• Machinery/equipment insurance
• Property in transit insurance
• Computer and electronic equipment insurance

The type of business you are operating, the value and importance of your equipment, the number of vehicles you own, the amount of cash you keep on premises and the number of employees you have will all impact which insurances make sense for you. Financial planners often have relationships with Insurance Brokers who can guide you towards the correct policies for you.

What ongoing insurance considerations are there?

Insurance policies need to be reviewed and renewed each financial year. There are a number of considerations as the end of the financial year approaches:

• All insurance policies need to be reviewed in full, checking in particular policy inclusions and exclusions.
• Business inventory and valuations must be updated to reflect current values and costs
• New vehicle and equipment purchases, as well as any new properties, must be reviewed and included in any valuations or policies.
• Vehicles, equipment and properties that have been sold must be removed from policies
• Business risks must be reviewed to cover changing circumstances, regulatory changes and likely events. For example, businesses in semi-rural areas may be at particular risk of fire damage, and businesses in wetlands may be at a greater risk of floods. Both of those businesses may be at increased risk of having their data compromised if there is a change in privacy laws. It is important to review risks regularly.
• Ensure that you have a contingency plan if your business cannot operate. That contingency plan may be a large emergency fund or a second source of revenue, but if these are not available then insurance can protect you in the event your business is interrupted.

I run a home-based business and have a home and contents insurance policy - do I still need business insurance?

Yes, as home and contents insurance policies often don’t cover your business activities and assets in the event of accident, damage or loss. Depending on the size and nature of your business, you may be able to cover the business as an extension of your home insurance, though it is often better to seek out specialised business insurance options. Insuring a home business is vital, though it is often overlooked by new business founders. If you are at all unsure about your insurance needs, you should seek advice from a qualified insurance broker.