We all know the adage – what can go wrong, will go wrong. When it goes wrong in business, it can go very wrong. If you run a business, a lot depends on things going right. Your suppliers, your investors, your people, and your livelihood. Losing a day or two of productivity can often mean the difference between being in the black or being wiped out entirely. Insurance protects not only you, but your people, equipment, data, physical property, and intellectual property.
That’s why you need comprehensive and thorough business insurance – though you may have premiums in place, there could be some areas you haven’t considered. We cover all the major types, so you aren’t caught out.
Public liability insurance
These two insurance policies are likely the biggest ones you’ll need – and likely make a claim on (fingers crossed you don’t!) Public liability protects your business against claims of injury or harm the public claims happened at your premises due to negligence. This covers the cost of compensation or legal fees and or restitution. For example, let’s say you run a fruit shop. Public liability insurance will protect you in the case of a customer alleging a piece of fruit caused them to slip over and break their arm. If they take you to court and are successful, you won’t be on the hook for paying their compensation or legal fees.
Professional indemnity insurance
Similar to public liability insurance, professional indemnity insurance covers you for alleged breaches of duty or negligence due to improper advice or conduct of your business. Let’s say you’re a financial adviser and you inadvertently misplace documents with their financial information. This type of insurance would cover you for compensation, legal costs, and the costs of investigating your case so lawyers can better defend your position. Of course, this does not cover intentional damage – something you did maliciously.
Worker’s compensation insurance
In Australia, having workers compensation insurance is a legal requirement for nearly every business with employees. This guarantee that employees are safeguarded in the event that they contract a sickness or suffer injuries at work. Employees who work from home are also covered – so make sure your policy extends to every employee, no matter where they work for you.
Commercial property insurance
This type of insurance covers your property or building where your business takes place. Much like home and contents insurance, it covers the premises and contents against fire, flood, theft, and other damage. It can also cover goods or product spoilage in the event of equipment failure, e.g., food becoming inedible due to fridges losing power. This is especially important if you run a business that relies on equipment, such as manufacturing. If you run a warehouse and all the stock is destroyed, this type of insurance covers the loss.
Product liability insurance
If you make physical products and/or work in hospitality or food, product liability insurance covers you in the event of causing illness or injury to someone who has used one of your products. For example, if a patron alleges a dish you served them made them sick, it will cover any compensation or legal costs you’re liable for.
Cyber liability insurance
This type of insurance is relatively new but no less important than the other premiums. Cyber liability covers you in the event of data breach, cyber-attack or hacking, or ransomware attack. This protects your company from losses arising from downtime (e.g. your website goes down or your payment systems fail) or customer damages, such as hackers releasing customer personal information. It also covers costs of hiring developers or cybersecurity practitioners to restore your systems.
Remember to speak to a professional insurance broker
When looking for your next business insurance policy from all these areas, always consult a professional broker. Small business insurance firms are glad to help with the finer points. Risk evaluations are done by brokers and insurance specialists – and may be beneficial when you are renewing your insurance. These are usually a set of questions to determine what level of coverage you need so you aren’t caught out.
The advice here is general in nature and is not a substitute for a professional consultation.