What is Business Insurance?

“Insurance coverage that protects businesses from losses due to events that may occur during the normal course of business. There are many types of insurance for businesses including coverage for property damage, legal liability and employee-related risks. Companies evaluate their insurance needs based on potential risks, which can vary depending on the type of environment in which the company operates.”

Business Insurance can protect your employees, equipment and your business as a whole. However, there is not one all-encompassing insurance policy called Small Business Insurance. The type of insurance needed for your business varies greatly depending on the type of business because some may require coverage that others may not. An exterminator may have a small fleet of trucks to insure, but a small shop may not have any vehicles at all. A florist may have a small amount of inexpensive equipment to cover whereas a dentist would have a lot of state-of-the-art equipment that would be expensive to replace. It may also be the case that one business owner may have more of a personal stake in their business than another and would want more insurance coverage to provide for that. Your Small Business Insurance should fit your business like a glove. It shouldn’t be too big and provide coverage that you don’t need nor should it be too small and not give you enough coverage of all of your assets or potential risk.

Assessing your entire business may seem complicated and overwhelming but a reputable insurance professional can consult with you to determine your company’s risk and come up with a customised policy to cover your business and give you the assurance that you’re covered in case of an emergency.

Why Small Businesses Need Small Business Insurance

All small businesses need Small Business Insurance, whether you’re a business owner or you’re a sole trader doing business in a trade, the hospitality business or contractors. Every day, small business owners are faced with a huge number of risks that they may not even be aware of that could put their livelihood in danger. Even the most careful business owner who keeps his staff trained on all of the proper safety procedures can find himself in an unexpected situation that requires an insurance claim. In fact, there are many ways other than injuries that you could cause loss in your business. Do you sell a product? What if your supplier has a fire in their warehouse? Even if you hadn’t yet paid for the product, you still may be facing a loss while you wait for your supplier or in the interim while you find a new supplier. Interruption of Business coverage would help get your company through this loss. Any business is at risk of theft whether it is merchandise, money or even your office equipment whether by an employee or an outsider and should have Theft Coverage. Although some areas may be more at risk for a natural disaster than others, they can occur anywhere and at any time so adequate Property Insurance is necessary.

Without proper coverage, your business is vulnerable to any number of risks that could be detrimental to it. A single lawsuit or natural disaster could cause even the most successful business to be forced to close its doors forever. If your business is just starting or doesn’t have available funds, it could take much less than that to cause your business to fold.

Opening a small business is a challenging and exciting endeavor. There’s so much to do to get your company up and running smoothly. You need to find a space to do business, hire the right staff, purchase all the necessary equipment and make sure it is a safe work environment. Even if you’re the only employee, you want your business to be successful. Why would you put all of that hard work at risk by not having adequate Small Business Insurance coverage to protect you and your business?

The idea that insurance is too expensive for smaller businesses is a myth. Small Business Insurance is affordable because you only buy the type of coverage that fits your needs. A good insurance agent will sell you only the coverage you need to protect your individual business.

Types of Business Insurance Small Businesses Need

There are many types of coverage that an agent would recommend for your business.

The first two listed are compulsory, as stated by the Australian government. The others may be recommended depending on your type of business:

1. Worker’s Compensation. Worker’s Compensation Insurance provides protection for employees who may become injured or sick at work. It can replace wages and provide medical benefits as well for the employee.

2. Compulsory Third Party Vehicle. If you operate even a single vehicle for company business, Compulsory Third Party insurance is required for registering and operating the vehicle and protects you from claims made against you for any personal injuries related to the use of the vehicle. Though not required, it is recommended that you obtain additional insurance to cover things such as damage to property or vehicles including your own.

3. Public Liability. Public liability insurance covers your business in the event that someone is injured or someone else’s property is damaged during your normal work activities. This is an important cover in this time of rampant litigation because it provides some security in case of a lawsuit resulting from the injury.

4. Professional Indemnity. This is an important coverage to have if your profession involves providing a service or giving advice because it could protect against financial loss, injury or property damage that may have resulted from your services.

5. Property Insurance. This coverage protects you in the case of damage to your equipment so it can be replaced as quickly as possible. It also covers any damage to your building due to accident, fire or natural disaster.

6. Theft coverage provides protection against theft of stock, money, office equipment, etc. which may be costly to replace. It covers both outside theft and internal theft, which unfortunately is on the rise.

7. Business Interruption. This important coverage protects businesses against loss of revenue due to an unforeseen circumstance that has disrupted your normal business activities.

8. If your building has large custom windows, they are not only expensive to replace, but if they accidentally break, they can pose a physical danger to your customers, but they can leave your products and interior exposed to the elements and to potential theft. Glass insurance would protect you.

9. Personal Accident. Whereas Worker’s Compensation covers your employee if they are injured, Personal Accident Insurance covers you when you need to hire someone to temporarily take that employee’s place and may help minimize the impact that loss has on your business.

10. Commercial Vehicle Insurance. If you have vehicles that you use to transport employees or your equipment, protecting them with the proper coverage can protect them against theft or damage.

11. Cyber Insurance. For many companies, their data is private information. Cyber Insurance can help protect you against cyber attacks that could compromise your data and could result in revenue loss not only due to the lost information but due to your company’s tarnished reputation as well. You may be facing lawsuits from your customers because of the breach and Cyber Insurance will provide you protection.

In the fast-paced business world, it’s more important than ever for small businesses to be prepared for any eventuality that may befall them. Just as you would purchase the proper Homeowner’s Insurance coverage to allow you to fix any damages caused by an accident or a disaster, protect yourself from a lawsuit if someone slips on your stairs, or to rebuild your home if necessary, you should obtain the same adequate protections for your business. You may only need a few of the mentioned coverage’s to fully protect your company.

Consult with your insurance broker to determine your business’ risks and receive a policy that will fit your needs. You hope that your business never experiences any kind of damage or theft or loss but having a comprehensive Small Business Insurance package will give you the peace of mind needed to be able to focus on making your business a success.