Businesses must deal with risk on a daily basis, regardless of their size or industry type. If you're operating a small business, having insurance can help reduce your risk and allow you to succeed in the future.
If you own a business, you may be liable for damages or injuries to another person or property. Though liability insurance is optional in most cases, it is strongly recommended for businesses in all industries as the likelihood of being sued is unpredictable and potentially very costly.
There are several types of liability insurance to consider including:
- Public Liability - protects you and your business against the financial risk of being found liable for negligence.
- Professional Indemnity - helps to cover the cost of litigation.
- Product Liability - protects you and your business if you sell, supply or deliver goods that cause injury, death, property damage or nervous shock.
It is a good idea to talk to a number of insurance companies and brokers to discuss your options.
Assets and revenue insurance
To protect your assets and income, you should consider insurance for your motor vehicles.
It is compulsory to insure all motor vehicles and fleets that your business uses on public roads. Many different types of policies are available, so it’s good to make sure you understand each before making a decision.
There are four basic options:
- Compulsory third party (injury)
- Third party property damage
- Third party, fire and theft insurance
- Comprehensive insurance
Find out more about assets and revenue insurance.
The following types of insurance aren't compulsory, though it is recommended that you consider all options:
- Building and contents
- Business interruption or loss of profits
- Deterioration of stock
- Electronic equipment
- Employee dishonesty
- Farm insurance
- Goods in transit
- Machinery breakdown
- Tax Audit
- Property in transit
Find out more about insurance in your state or territory.
Risks to your business can exist anywhere and it can be hard to predict when they will occur. Managing risk is an important part of business, and planning for risks before they occur is often the easiest way to do this.
For example, as a business owner you may want to plan for when interest rates or prices increase, skilled staff leave your business or new competitors may enter the market.
There are standard procedures and processes to handle risk management in business. Standards Australia has developed a Standard, AS/NZS ISO 31000:2009, Risk management - Principles and guidelines that outlines procedures and processes to implement.
It is a good idea to develop a risk register to document each potential problem, its level of seriousness, what costs are required to fix it and who will fix the problem.
Download the Good Security - Good Business booklet for information on risk management and business continuity.
Making an insurance claim
Making insurance claims can seem daunting to many business owners, particularly for those with no accident history. As the insurance claim is the first step to recovery, it's important to understand what to do.
Before making an insurance claim, it’s good to get evidence to support your claim. Depending on your circumstances, this may include taking photographs, making notes, getting copies of computer logs.
After getting evidence to support your claim, you should quickly inform your insurance provider, and if necessary, report any incidents to the police or other relevant authorities. It is a good idea to make sure you have detailed documentation about how and when the incident occurred, and how it has affected your business.
If you need to undertake emergency repairs to minimise or prevent further damage to your business or your assets, check your policy details first to be sure that any repairs you make will still be covered. Keep copies of all invoices and bills so you can provide these to your insurance provider.
You should also consider whether paying for any repairs or replacements yourself will be better value for you than paying your excess for the claim.