Business insurance at a glance - by Jamie Stumpo
What is business insurance?
A business takes years to build – but an accident or disaster could destroy it all in minutes. That’s why businesses should help protect themselves with a quality business insurance pack.
With the right cover in place, owners can run their business with confidence, knowing that their premises, stock, equipment and reputation are protected by insurance.
Who should consider it?
"Having the right insurance will help protect your business and minimise its exposure to risk. This may include insuring your business, your income and your commercial risk."
“The scale and reach of malicious cyber activity affecting Australian public and private sector organisations and individuals is unprecendented. The rate of compromise is increasing and the methods used by malicious actors are rapidly evolving.”
Department of Innovation, Industry and Science, 2018
Did you know?
The cost of natural disasters to Australian business, government and communities is estimated to reach $33 billion by 2050.
(Australian Business Rountable, The Economic COst of the Social Impact of Natural Disasters, 2016)
According to Inside Small Business, only 16% of SMEs have a financial back-up plan in place, while 35% said they’d need to cut spending and limit their lifestyle if they were unable to work.
(Inside Small Business, ‘Seven insurance issues small business owners should consider in 2017’, 2017)
Among small to medium sized businesses that have experienced a successful infiltration of the corporate network by ransomware, 22% reported that they had to cease business operations immediately (identical to the global average), and 18 percent lost revenue (higher than the global average).
(Second Annual State Of Ransomware Report: Survey Results for Australia, Ostertman Research 2017)
What can it cover?
Business insurance packs can offer general protection for a business, which may include cover against:
- Property Damage - Repair or replacement of rpoperty damaged
- Business Interruption - Loss of trading profit following insured damage to property and additional costs and expenses incurred during a claim
- Theft - Repair or repalcement of property stolen
- Money - Loss of money
- Public or products liability - Your liability to pay compensation for personal injury and property damage as well as the costs involved in defending a claim triggered by the policy
- Glass - For replacing glass inside or outside your premises, including your shopfront windows, mirrors or display cases
- Transit - For stock that is in transit on the road, in the air or by the sea
- Electronic equipment breakdown - For repairing or replacing electronic equipment that breaks down
- Machinery breakdown - Cover for costs assocaited with machinery breakdown
- General Property - To cover your tools of trade, including laptops and tools that you use for your profession or trade
- Tax audit - To cover the costs of being audited by the ATO
- Employee dishonesty - Direct financial loss of the business caused by the dishonest or fraudulent conduct of an employee which is first discovered during the period of insurance
What usually isn't covered?
Exclusions, and the excess you need to pay, and limits of liability can vary greatly depending on your insurer and the requirements of your business.
Rohan owns a shop in the city. One night a water pipe bursts, flooding the building and damaging his stock. Even worse, the building must be evacuated and renovated to repair all the water damage. This means that Rohan is unable to trade for six weeks.
Rohan’s business insurance covers the cost of the renovations. And, because he has business interruption insurance, he receives a payout to cover the income lost while he’s unable to trade.