Operating a business, any business involves risk. All sorts of untoward things can happen and those can seriously jeopardize your finances and your plans for the future. Therefore, it only makes sense when a business owner takes measures to reduce uncertainty, manage risk and shield his business from unforeseen events to protect his livelihood. And business insurance is the tool to achieve this. Business insurance can protect your stock and contents. It will safeguard the machinery and equipment you need to stay in business and provide coverage for any damage or loss to your business premises. At any time, if you are found liable to someone (a customer, an employee, or any member of the public you interact with as part of your business) because you caused injury or death, economic loss, damage or loss to their property due to your negligence, the right type of business insurance will ensure that you won’t have to pay all those hefty compensations or legal costs out of your pocket (the kind of money that can put much small and mid-sized business out of operation). Finally, business insurance will also provide adequate financial support if, at any time, you are forced to shut down operations temporarily in the wake of an unforeseen event such as fire, flood, or other natural disasters like hurricanes, etc.
Business Insurance Solutions: The Basics
Different types of businesses, however, require different insurance policies to safeguard company assets and to shield themselves against potential legal liabilities. When it comes to business insurance solutions, there is no ‘one-size-fits-all’ type of thing. What type of insurance you’ll need will depend on the industry, trade, and the specific type of business you are running. Insurance providers offer a variety of policies that are designed to cover small- to mid-sized businesses, independent contractors, professionals, tradespeople, and more. It is important from a business owner’s point of view that he researches his options well when it comes to insurance policies. What sorts of policies are best suited to the type of business he is operating? Should he buy them separately or as a bundle? Which companies are best to go to as per his requirements? The research will help you with all these queries and will make sure that you make an informed decision before the purchase. Alternatively, you may opt to hire a brokerage service that will manage everything related to your business insurance. Leveraging the power of their extensive network, the best business insurance brokers will help you find the best policies as per your needs and will work on behalf of you and not the insurance company. You stand to enjoy several other benefits as well (we’ll touch briefly upon it later) as long as you engage the services of a reputable business insurance broker. For Australian business owners, we recommend Smart Business Insurance, a business insurance adviser service that provides comprehensive business insurance solutions to small business owners, sole traders, consultants and contractors (from all the different industries/sectors) and which enjoys an excellent reputation with its clients.
Types of Business Insurance You Will Need
As already mentioned, there are many different types of business insurance policies designed to meet the requirements of specific sectors, industries and professions. The most common of these include:
- Public liability
- Product liability
- Property
- Workers’ Compensation
- Business Interruption
- Theft and Burglary
- Professional indemnity/liability
- Commercial vehicle mandatory personal injuries insurance
- Deterioration of stock
- Tax audit insurance
- Employee fraud or Dishonesty
- Glass
- Equipment/machinery breakdown
- Electronic and computer equipment
- Property/Goods in transit
Of all the above, two types of insurance are considered mandatory for all Australian businesses (when the form of insurance is relevant to the business). These are Workers’ Compensation and Compulsory Third Party motor vehicle insurance for commercial vehicle operators.
As for all the others, which and how many of them you will need and should opt for will depend on the nature of your business. For instance, the risks faced by a construction company vary significantly from those of, say, a landscaping business or a coffee shop. Again, a commercial vehicle owner will require a different type of coverage than a legal consultant or a home-based sole trader.
Again, your insurance broker can help you decide exactly what products you need to invest in to safeguard your business. Many insurance providers also offer different packages in a bundle. These bundle offers are typically designed for small and medium-sized business owners, and they come at an easier cost than if you purchased the policies separately. Depending on the insurance provider as well as the nature of the applicant, the policies can also be customized and changed to suit your business requirements. Most large businesses, for example, use tailored and structured insurance programs that are unique to their requirements. However, customized business insurance solutions (albeit at a smaller scale) can also be availed of by small and medium-sized business owners.
Why Hire a Business Insurance Broker?
A reputed business insurance broker will handle everything related to the insurance side of your business. They will source multiple competitive quotes (on suitable policies for your business) from major insurance providers. They will perform all required negotiations (for customized coverage, bundle packages, and others) with the insurance company on behalf of you and also take care of all payments (these include premiums and monthly payments as well as claims payments).
Also, importantly enough, your broker will help you with the EOFY or the end of the financial year assessment and review. In short, when you hire a business insurance broker, the latter will perform all the legwork for you with regard to your insurance tasks and responsibilities. This means peace of mind for you as you can focus solely on other aspects of your business, knowing that your insurance requirements are well taken care of by your broker.
Finally, some businesses (such as boarding houses, caravan parks, backpacker hostels) have unique and niche requirements and need specialized business cover that are hard to obtain from major insurers. However, thanks to their extensive network of insurers and underwriters, experienced brokerage services can still arrange the necessary policies for these types of businesses as well.
