Business Insurance Explained
Business insurance as the name suggests protects your business from any loss as a result of accidental damage, fire, theft or vandalism. Business insurance is necessary as all the items you own that relate to your business have to be covered by a business insurance policy before they can be claimed. Regardless of the type of business you own you will need a business insurance policy to be able to survive without being ravaged by civil lawsuits.
A great mistake people make is that have a home based business and they assume that their office equipment is covered by the basic home contents insurance policy. This is incorrect. If you have a home based business you need both a home contents insurance policy and business insurance.
Who is a potential candidate for business insurance?
Business insurance is an option for any business owner who wants to have protection for their business from legal action and from damage or theft of their business property. Many small to medium enterprises are vastly underinsured in this area as they try as save money. Usually, these same businesses fail as they have insufficient funds to defend themselves in a court action, or can’t afford to replace all the equipment they had stolen.
What typically does a business insurance policy cover?
Business insurance has a broad set of inclusions as standard. You should be covered for accidental damage, loss or theft of property from your business. You should also be covered for liability from your employees, contractors or business partners and all legal, medical and compensation costs will be also be covered.
What typically does a business insurance policy not cover?
A typical insurance policy will give you a fair amount of cover in areas where you will need it but each industry is different and each business is different. Find out if your particular business will be covered by basic business insurance policies. You will find that if you are in a primary industry like farming and fishing you will need specialized cover. If you are in high risk industries like aviation, engineering, construction or the military then you will invariably not be covered by a basic policy.
Additional insurance products that policy holders might take out in this area
Depending on your particular type of business, you may need professional indemnity insurance and public liability insurance. Professional indemnity insurance will protect you from mistakes you make in the course of your business that cause a financial loss to another individual or company. Public liability insurance covers you against injury caused to any member of the public at any of the premises of your businesses.
Additional coverage for a business insurance policy
In business some of the most valuable items are not pieces of equipment or property but paper that contains valuable information. You can get extra coverage to ensure that in the event of damage or loss you can easily replace all your documents. Other coverage that may come in useful is incorporating any intellectual property you have in with your business insurance. This will ensure that you will suffer only minimal technical or intelligence losses to your business.
What will business insurance typically cost?
Business insurance is usually a percentage of your total insured cover. The size of the percentage is wholly dependant the industry you are in and the risk factors the insurance company believes to be true for your business. You may find that a smaller white collar business have a percentage around 1% of your total cover whereas large businesses who many staff members and a ‘dangerous’ industry may see premium at 4-5%. The exact percentages are then determined by the level of coverage required and the insurer you choose to go with
Where Can I find Business Insurers?
You can find a wide selection of Business Insurance brokers and agents at www.businessinsurance.net.au
Please note that this is not an exhaustive list of all available business insurers in the marketplace.
Other Types of Business Related Insurance
