I often chat to clients who are about to start a business or have just started one. Generally, when you start a new business, insurance is the last thing on your mind. It is however, vital that you get the right cover in place from day one.
Here are some of the common types of cover you might be able to take out, if they are applicable to your business. (this is not a comprehensive list and professional advice is always recommended)
Workers Compensation Insurance
If you employ staff, you will require workers compensation insurance. In South Australia this is mandatory and through ReturnToWorkSA.
As an employer, it’s your responsibility to make sure employees do not face financial hardship if they have an accident or die on the job. It covers medical costs and lost wages when your employee cannot work.
Professional Indemnity Insurance
Professional indemnity cover protects your business in the case of mistakes or errors made while serving clients through the advice that you have provided. If a client/customer sues for negligent or careless acts or errors that they believed caused them a loss. Professional indemnity cover will cover related legal costs and settlements. It is a must have for professionals such as doctors, lawyers, financial advisers and etc.
Public Liability Insurance
Public Liability insurance protects your business against the financial risk of being found liable for negligence, and causing third party injury or harm. As an example, let’s say you own a cafe and a customer slips on a drink that had been spilled on the floor earlier, sustaining an injury. Your business can be held liable for the resulting injury, including medical treatment and any legal costs. Without an insurance policy, the business owner will likely have to pay these costs out of pocket and, could cost thousands of dollars and potentially bankrupt a business.
Commercial Property Insurance
While public liability insurance protects you in the case of third party injuries or property damage, Commercial Property Insurance protects your business’s own property. That could include a physical office space, restaurant or retail store location, as well as equipment and supplies. If you own or intend to purchase a building or any personal property that is used for business, you’ll want to purchase Commercial Property Insurance, which will cover costs resulting from things like fire and theft.
Cyber Insurance has increased dramatically over the last few years as cyber attacks have become increasingly common. If you store customer data electronically, such as credit card details or personal information. You’re at risk of a data breach, which could cost your business significant cash or downtime. For example, an employee could accidentally click on a phishing email and reveal confidential customer information to a hacker.
Directors Insurance (Management Liability)
Directors Insurance covers the managers, executives and board members of your company. In the event that they are sued for decision’s, they made while working for your business. If a company goes bankrupt, vendors could sue directors for the company’s failure to collect debts. In these cases, with no cover, directors could be held personally liable and face risk to their own assets. It’s a terrifying situation and one that most directors don’t want to wind up in.
As with anything, it is always best to get advice from a professional to best mitigate your risks. An insurance broker we use and recommend is Andrew Wong from Lion Insurance Services.
Along with the above, it is always best to review your life insurance, total and permanent disablement, income protection, critical illness (trauma), key person cover and buy/sell insurance.
Book an appointment at our Adelaide office, Broken Hill or Skype by clicking here