What Insurance Type Do I Need For My Business?

Insurance

Starting your business may be an overwhelming experience for most people. However one area in which you should never neglect is insurance. There are many types of insurance for your business, such as property insurance, liability, compensation, health, life and more. You can almost insure against anything. The most important you must realise is the risks you are taking. If you want to go "bare" (without coverage), that's fine, but you need to understand what the risks are."

The most common mistake that small businesses make, particularly during startup, is to carry inadequate liability coverage, which insures against bodily injury or property damage to others. Many people believe that just because your business is making little to no revenue your business wont need insurance. "If you are covered by liability insurance, the insurance company represents you in court, so in a way, you are also buying legal representation."

What insurance type do I need?

Common types of insurance coverage frequently purchased by small business owners include property insurance and liability insurance. Below are some more common insurance types:

Small Business Pack. is a typical composite policy for small business which usually covers fire and other perils, theft and loss of money, burglary, electrical and mechanical breakdown, and public and product liability.

Theft, Covers:

• Theft of property
• Damage by burglars
  (Does not cover theft by shoplifters and/or workers

Business Interruptions, Covers interruptions caused by:

• Damage of property
• Fire
• Others

Electronic equipment, Covers the breakdown of:

• Computers
• Hardware
• Software
  (Does not cover “wear and tear” breakdowns)

Public and Products Liability, Covers:

• A Public Liability insurance policy covers your legal liability arising out of the conduct of your business. This covers compensation or legal costs if a third party (someone who is not an employee) suffers death, injury or damage to property caused by you or your employees.
• A Product Liability insurance policy covers damage to another business and/or death or personal injury caused by the failure of your product or a product you sell. Even if that other product has only been modified or assembled by you, it is considered your responsibility. If your product was a component in an expensive piece of equipment that failed due to your product, the damages claimed against you could be high. You should note that if you have imported a product and the manufacturer has no representative in Australia, under the Trade Practices Act you could be deemed to be the product's manufacturer.
• You may be able to have your public liability policy endorsed to also cover product liability.

Partnership, Covers

• Death of a business partner

Glass, Covers:

• Cost of replacing broken glass
  (Does not cover injuries caused by the broken glass)

You may want to work with an independent insurance agent, or broker, who is familiar with your type of business. An agent should take the time to analyse your operations and coordinate all types of insurance coverage.