A responsible business owner needs to understand what types of commercial insurance a small business should have in place to avoid significant losses. Knowing which insurance policy fits their business can help the company and its employees recover from major accidents and reduce losses in the event of certain risks materializing. If you're a small business owner who's just starting out, this guide is for you.
What Types of Commercial Insurance Does a Small Business in Australia Need?
When it comes to small businesses, it is important for them to understand the types of insurance that are available for their industry. Commercial insurance is a type of business insurance that provides protection from financial loss due to physical damage, destruction, or legal liability that the business may incur in the course of its operations. Let's take a look at some of the commercial insurance that a small business in Australia should have.
General Liability Insurance
This type of business insurance provides coverage for general liability claims, including the threat of claims from customers and vendors. In simple terms, this means that should a business physically or legally damage another person or their property, general liability insurance can cover such costs. It is a form of business insurance that is critical for all businesses, as it protects them from costly lawsuits.
Income Benefits Insurance
Income benefits insurance provides income protection for business owners and key employees. This type of insurance is designed to ensure that business owners receive a certain amount of their income should they be unable to work due to sickness or injury. This means that should an employee suffer a job-related accident or sickness and be unable to work, they will receive the amount of income they need to cover their bills.
Business Interruption Insurance
This type of insurance is designed to protect businesses from losing out on their business income should they suffer a loss of trade due to damage or destruction of the premises. This type of business insurance also includes additional expenses, such as leasing and operation of temporary premises.
Equipment Breakdown Insurance
This type of insurance covers all business equipment, which includes computers and other equipment that is vital to the operation of a business. It is important for a business to carry this type of insurance to ensure that the company's equipment is covered if the company suffers a loss.
Employer's Liability Insurance
Employer's liability insurance pays out if an employee makes a claim against the company. This type of insurance covers any claim by former employees or subcontractors, such as unpaid wages or unfair dismissal. It is vital for a business in Australia to carry the right amount of commercial insurance.
Is it Better to Invest in Commercial Insurance?
Buying commercial insurance for your company is like buying car insurance: everyone will tell you that it's a must. But the fact of the matter is that a business owner will have to decide whether it is really necessary. Business insurance is not cheap. After all, it must pay for all the losses and damages that your business may encounter.
The best way to answer the above question is by looking at the way your company conducts its business. If you're running a business that's risky, then you might need insurance. However, if you're running a safe business, then getting insurance may not be at the top of your list.
Conclusion
Commercial insurance is a must for any business, whether it's in Australia or anywhere else in the world. For a small business that is just starting out and may not have the funds to pay for a policy, a business insurance broker can help.
New Wave Insurance works with several insurance providers to bring you the best possible solutions. We are one of Gold Coast’s premier insurance brokers helping businesses find the right insurance vehicle for them. If you're interested in taking out a business insurance policy, our team is ready to assist you. Contact us today to book a free 15-minute consultation!