Regardless of business size or the industry they operate in, business owners have to deal with risk on a daily basis. Their potential to thrive and ultimately succeed in the long-term depends on their ability to manage and mitigate these risks.
Insurance is an essential part of managing risk. For SME business owners, insurance can be the difference between the business succeeding and failing if an unforeseen incident occurs.
There are a huge number of insurance policies on the market, so finding the right cover for your business can be difficult. The most appropriate cover for your business will depend on a number of circumstances but as a starting point, here are 7 types of insurance your business should know about.
1. Public & Products Liability Insurance
Liability insurance is a necessity for every business, even home-based businesses. It covers both defence costs and any compensation payout if your business, your employees or your products or services cause bodily injury or property damage to a third party.
2. Property Insurance
Property Insurance covers the business premises as well as business property such as office equipment, computers, inventory or tools from fire, vandalism, theft, smoke damage and other perils. You may also want to consider business interruption/loss of earning insurance as part of the policy to protect your earnings if the business is unable to operate.
3. Business Car Insurance
Taking the risk of driving without insurance is not only illegal, but it can also have far-reaching impact on your business’ financial standing. Business Car Insurance covers a range of circumstances, which may include damage to the business vehicle, damage to 3rd party property caused by the business vehicle, emergency repair to the business vehicle and replacement of the vehicle after a total loss. Policies may also offer cover for costs associated with theft of keys as well as the cost of towing and storage for the business car after an accident or theft.
4. Professional Indemnity Insurance
Professional Indemnity Insurance provides financial cover for defence costs and damages payouts that arise as a result of an act, omission or breach of professional duty. Professional Indemnity Insurance is most common in professional industries that offer advice as part of their service, such as lawyers, accountants, consultants, real estate agents, insurance brokers, and technology providers.
5. Directors and Officers Insurance
Directors and Officers offers liability cover to top level managers, who have to make difficult and complex decisions that impact the whole business. This type of policy protects the directors and officers in a company in the event that their actions negatively affect the profitability or operations of the company by covering legal costs or damages lost as a result of a lawsuit.
6. Cyber Insurance
Most businesses today rely to some extent on the Internet, email, websites and computer software to operate. However, any business that relies on technology is susceptible to a cyber attack. Cyber Insurance is a specific insurance policy designed to cover against losses incurred as a result of data destruction, extortion, theft and hacking. It covers key issues that modern businesses face in relation to using and protecting data and utilising digital media and communications.
7. Tax Audit Insurance
The possibility of being subject to a random Tax Audit is increasing every year. If this happens to your business, not only can it cause significant disruption, but it can also incur huge costs. Tax Audit Insurance is a specific type of insurance policy that covers professional accounting fees that arise as a result of a Tax Audit conducted by the Australian Taxation Office (ATO) or any other Australian (Federal, State or Territory) government agency, which has the statutory responsibility to conduct audits in relation to taxation, duties, or levies.
Speak to your insurance representative at PSC Insurance Brokers for more information on the above policies.
Conditions apply for each policy and the information expected from you for a policy to trigger. Coverage may differ based on specific clauses in individual policies. Please ask your broker to explain the additional benefits and exclusions pertaining to your policy.
The information provided is general advice only and does not take account of your personal circumstances or needs. Please refer to our financial services guide which contains details of our services and how we are remunerated.
