How to insure your business
There are many different types of business insurance that are designed to cover your needs, which can be grouped into four main areas:
- Employers liability or Workers' Compensation insurance
- Property or assets insurance
- Public/product/professional liability insurance
- Car insurance
Employers' liabiltiy or Workers' Compensation
Workers’ Compensation insurance is a mandatory requirement for all businesses that employs staff on a casual, part-time or full-time basis. It provides cover for the financial costs of claims made by a staff member for work-related injuries, disease, illness or even death.
Property insurance covers the costs associated with the repair or replacement of your physical assets, including your building, equipment, furnishings, fixtures, inventory, computers, and business documents and records.
Fire & perils insures against destruction or damage to your business, including building and contents, from a specified insured event, including fire, explosion, storm, earthquake or water damage.
Business interruption covers you if your business is interrupted due to damage to your premises, from an insured event, which affects the trading results of the business.
Burglary covers loss of business stock, contents, and machinery by theft following a forcible and violent entry into the business premises.
Engineering equipment or machinery breakdown insures you against the cost of breakdown of machinery, computers and electronic equipment owned and operated by your business.
Loss of money protects you against the loss of or damage to your business' money from theft, armed hold-up or fire, either while the money is on your premises or in transit.
Goods in transit covers against loss or damage to your property whilst it is in transit. This is available for Australia only or worldwide, depending on your business needs.
Glass breakage covers accidental loss or damage to internal and external fixed glass including Perspex signs which you own or for which you are legally responsible.
Employee dishonesty (fidelity guarantee) protects you against fraudulent or dishonest conduct of employees acting alone or in collusion with others. This mainly relates to theft or misappropriation of money or other items owned by you by your employees.
Electronic equipment covers specified equipment such as computers, faxes and electronic cash registers against accidental loss or damage including theft and breakdown.
Third party injury liability (Compulsory Third Party) protects your business from any legal liability arising out of an accident involving one of your vehicles that results in injury to another person.
Public/product/professional liability insurance
Public and product liability insurance and professional indemnity insurance protect the owners and operators of a business from their financial liability to third parties arising out of an event or occurrence that they are legally covered for during their operation.
Car insurance
Comprehensive car insurance insures you against loss of or damage to your vehicles due to a collision and other accidental damage, theft, fire, and also includes indemnity for any legal liability for third party property damage.
Provided by Allianz Insurance.
written by jsimpson121, October 19, 2010
For a quick overview, insurance is broken down into LIFE and GENERAL, life being the obvious:
- Personal Accident & Illness
- Income Protection
- Life Insurance (no surprises with this one...)
General:
- Being Everything Else
As far as a business is concerned, you would have cover for;
Assets:
- Buildings, Fixtures & Fittings
- Gear & Equipment
- Machinery Breakdown
- Electrical Breakdown (Fusion)
- Tools of Trade
- Stock
- Business Interruption
- Motor Vehicles (Registered & Unregistered)
Liability:
- Public Liability
- Products Liability
- Baileys Liability (Care, Custody & Control)
- Professional Indemnity (Professional Risks Insurance)
- Employers Indemnity (Workers Compensation)
:- Seafarers Compensation for 'workers' on 'prescribes ships'
A 'Business Pack' policy is a basic policy suitable for small business, any business with assets in excess of $2,000,000 would (and should if the business has a half decent Insurance Broker) have their insurance placed on an ISR (Industrial Special Risks) insurance policy, which is a far broader and superior policy. The key difference between the two is that a Business Pack is worded to specify insurance cover and specify exclusions, by contrast, an ISR is worded to 'Insure everything except as excluded' i.e. if an event or item is not irrefutably excluded under the policy than it is covered.
Further to 'Biz Covers' comment on Professional Indemnity (PI) insurance, you are largely correct, but to be a little more succinct; PI insurance provides cover for 'claims made' within the period of insurance provided that the event which gave rise to the claim occurred after the 'retroactive date'. PI does more than simply pay claims for as you described 'breach of professional duty', it affords cover for 'contractual commitments', 'libel & slander', amongst many other extensions but in my view the most important / useful cover under a PI policy is cover for 'Defence Costs' i.e. a long and expensive legal battle will ensue prior to any award being given to a third party. The expenses of such legalities (lawyers Fees, Court Fees, Professionals Costs, etc.) will generally be covered by a PI policy irrespective of any wrong doing, alleged or otherwise, on the insured behalf. With PI however the cover provided is an 'Aggregate Limit' and once used up, it is gone; unlike a Public Liability policy where the insured could have a $20m claim everyday for the policy period.
In the above I have barley touched on a fraction of insurance, covers, exclusions, warranties, errors & omissions, onus of proof, proximate cause, limits, sub-limits, extensions and how the contracts business enter into almost always adversely affect the insurances.
Contact an insurance broker - dont do it yourself! (I’m happy to refer you to reputable brokers if your after second opinions or alternative quotes m: 0411 869 803)