Starting a business exposes you to certain risks. Fortunately, however, all businesses have access to a wide range of insurance types, to protect them from the dangers that could wipe out a small business before it has had a chance to take off. An experienced Business Insurance Broker, can assist you in reducing your exposure to risk, and find an insurance program that is aligned to your specific needs and objectives.
There is no one-size-fits-all insurance solution for small businesses. Your insurance needs will vary according to the industry and type of business you are operating.
Here are the types of business insurance that every small to medium business owner should have.
Compulsory business insurance
Two forms of insurance are compulsory for most businesses.
Workers’ compensation
Workers’ Compensation schemes protect your employees in the event of an accident or sickness. Once the first employee has been hired, workers’ compensation insurance should be added to the business’s insurance policy.
Third-party
If you operate a company vehicle and cause injury to another person, third-party car insurance covers you for claims made against you for these personal injuries. Third-party insurance is a requirement in order to operate a vehicle. Business owners can also purchase Commercial Auto Insurance, to protect other vehicles that carry your employees, products of equipment.
Common types of business insurance
Professional Indemnity/Liability:
Liability insurance is the cornerstone of your business insurance scheme.
Every business, even if home-based, needs to have liability insurance. This form of insurance protects you from legal action taken against you if someone suffers a loss after following your professional advice or as a result of your receiving your service.
Property Insurance:
Covers damage or loss to buildings, contents and stock. Property insurance is vital to protect your building, office equipment, computers and inventory. Property insurance can also cover business interruption/loss of earning insurance if your business is unable to operate after a theft or other event.
Public Liability Insurance:
Covers your business for legal and compensation costs if you are found liable for an injury, death or economic loss as a result of your business’s negligence.
Product Liability Insurance
Businesses that supply, deliver or sell goods, will need cover against claims of their goods causing damage, injury or death. Product liability insurance works to protect a business in such a case. Consult with your business insurance broker to answer your business insurance questions, and tailor your insurance specifically to the type of product you provide.
Data Breach Insurance:
Storing sensitive client information on computers or servers, makes the business legally responsible for protecting that information. If an electronic breach occurs, a data breach policy will provide financial protection against the loss.
Life Insurance:
If you have life insurance, your insurer will pay a certain amount of money to your chosen beneficiaries upon your death. As a small business owner, you may be the breadwinner for your family. Having life insurance ensures that your family will be financially secure after you pass.
Business Interruption Insurance.
If a disaster or catastrophic event does occur, your business’s operations may be interrupted. The loss of income during this time could be enough to put you out of business forever. Business Interruption Insurance compensates a business for its lost income during these events. This type of insurance is therefore vital for any business that requires a physical location in order to operate.
By having the right insurance in place, a business can avoid major financial losses due to a lawsuit or other unforeseen event. Some businesses have unique or niche needs and therefore may find it difficult to obtain business insurance from major insurers. In this instance, Business Insurance Brokers can help you find the right policy that will suit your specialised cover needs.
Bio: Laura Costello is in her final year of a Bachelor of Law/International Relations at Latrobe University. She is passionate about the law, the power of social media, and the ability to translate her knowledge of both common and complex topics to readers across a variety of mediums, in a way that is easy to understand.
