What insurance does your business need?
The following table gives an overview of the different types of insurance and the types of businesses they're appropriate for.
|Personal accident and sickness insurance, revenue insurance||WorkCover insurance||Property and assets insurance||Professional indemnity, public liability insurance||Product liability insurance||Third party personal injury and vehicle insurance|
|Business with no employees||Yes||No||Yes||Yes||No||No|
|Business with employees||Yes||Yes, compulsory||Yes||Yes||No||No|
|Advisory-based business||Yes||Yes, if have staff||Yes||Yes||No||No|
deals with customers
|Yes||Yes, if have staff||Yes||Yes||Yes||Yes, if using motor vehicles|
|Business that owns company/business vehicles||Yes||Yes, if have staff||Yes||Yes||No||Yes|
|Business dealing with customers||Yes||Yes, if have staff||Yes||Yes||Yes||Yes, if using motor vehicles|
|Independent contractors||Yes||Yes, if have staff||Yes||Yes||No||Yes, if using motor vehicles|
Read on for an overview of the main types of insurance policies you could consider for your business.
Victorian WorkCover insurance
Victorian WorkCover insurance is compulsory for Victorian employers. The insurance covers employers if their workers are injured or become ill because of their work.
You must take out a WorkCover policy if you:
- expect to pay more than $7500 a year in rateable remuneration, or
- have one or more apprentices or trainees
If you're hiring contractors, you need to figure out if they're considered to be a 'worker' by WorkSafe Victoria. If the person is considered a worker, you effectively become their employer for the purposes of WorkCover, and you must include the money you pay them in your total remuneration
Personal accident and sickness insurance
Personal accident and sickness insurance covers you for loss of income if you have an accident or illness that stops you from doing your work.
This is especially useful for independent contractors who may not be entitled to workers compensation.
Public liability insurance
Public liability insurance is useful for any business that interacts face-to-face with customers.
It covers your potential liabilities to members of the public for personal injury or property damage if you or your business is found to be negligent.
You should consider getting public liability insurance if your organisation requires that:
- your customers or the general public visit your home or business, or
- you visit customers' premises
Owners and operators of organisations have a responsibility to those visiting or engaging in activities on their premises. This is called a 'duty of care'.
Product liability insurance
Product liability insurance covers you against claims for injury or damage as a result the failure of any of your products.
This type of insurance might be required if your business sells, supplies or delivers goods, even if you're just repairing or servicing those products.
Vehicle insurance for businesses
If your business uses motor vehicles, it is compulsory to insure the vehicles for third-party injury liability. Your cover must also be for commercial or business use.
The cost of your policy will depend on the:
- type of vehicles you use
- goods they carry
- frequency of use
- type of use
For example, businesses transporting dangerous goods require a very different policy to document couriers.
Professional indemnity insurance
Professional indemnity insurance protects professionals in many industries against negligence claims made by a client. It covers the costs and expenses of defending a legal claim and any damages payable.
Professional contractors often need professional indemnity insurance if working with government bodies, local authorities or private consulting firms.
Revenue insurance covers a business for reduced profits that result from disruptions to their business due to things like:
- major computer failures
It's sometimes also called 'consequential loss' or 'business interruption' insurance.
Property and assets insurance
Whatever the size of your business, it's a good idea to insure your assets such as your:
This will help you to continue operating if any of these assets are damaged, stolen or destroyed.
If you own your premises, it's likely to be your single largest business asset. This is usually true whether it's a factory, warehouse, shop or your home.
Many policies can help protect your premises against hazards like fire, lightning, storms, wind or water damage, explosions and vandalism.
Contents and equipment insurance
Contents and equipment insurance can help you replace vital business equipment, such as computer systems, manufacturing equipment, files, tools or machines.
This type of insurance can ensure you get back to business quickly.
Goods in transit insurance
If your business involves transporting goods by road, sea or air, you should consider insuring against potential damage that may occur once the product leaves your control and is in transit.
Get professional advice
Not all insurance types will apply to your situation. An insurance broker can assess the risks of your business and help secure the insurance you need.
Revenue insurance (also called 'consequential loss' or 'business interruption' insurance) helps compensate a business for reduced profits caused by interruptions like a fire, flood, accident, burglary or major computer failures.
Find a broker
Find an insurance broker through one of these networks.
Disputes with your broker
Insurance brokers legally must act as your representatives and work in your interest, whereas insurance agents may act in the insurance company’s interest. If you have a dispute with your insurer, you can contact the Australian Financial Complaints Authority for help.
Going direct to the insurer
If you choose to go directly to an insurance company, the Insurance Council of Australia has online insurance information, as well as contact details for its 56 member groups.