As a small business owner, make sure you are covered by these insurances.
As a sole trader, the perks of having a business you can steer however you like is something many people enjoy and strive for. You can run it how you please without interference from others and retain all the profit made from the business. However, unlike a Pty Ltd company, you and your business are a single legal entity. This means that if anything goes wrong in your business, the cost can impact your personal finances and life. In order to avoid any inevitable bumps when running your business, make sure you are covered by these essential insurances.
Public Liability Insurance
Public Liability Insurance is essential for any business owner as it protects you and your business against personal injury and/or property damage from third parties. These damages can be costly if you are not covered.
Product Liability Insurance
Generally, Product Liability Insurance is included as part of a Public Liability Insurance Policy. This insurance is essential if your business manufactures products that are sold in the general market. Even if your business is taking extra measures to ensure the product is safe, unexpected events could happen that could result in a lawsuit due to damage caused by your product. This insurance is tailored to cover your specific type of product.
Bushfires, cyclones and floods are unfortunately common in Australia, so make sure you are covered with Property Insurance. Whether your business owns or leases the space, this insurance is required to cover damages to your equipment, signage, inventory or furniture. It will come in handy throughout the year as it can also cover any unforeseen damages such as theft, water damage or fire damage.
Workers’ Compensation Insurance
As your business progresses and starts to expand, you’ll need to hire employees to help operate it. Once you’ve hired your first employee, consider covering yourself and the business for Workers’ Compensation Insurance. This insurance covers any medical treatments, disability and death benefits if an employee is injured or dies as a result of working at your business. Even if your employee is working at a low-risk job, medical conditions such as carpal-tunnel syndrome can result in a costly claim to you and your business.
Home Business Insurance
If you are operating your business from home, ask your insurer if they can cover you with Home Business Insurance. Unfortunately, standard home insurance does not cover home-based businesses in the same way Property Insurance does. This insurance usually covers any damages to your equipment or inventory and protects you from any claims against you and your business. If you suffer an injury or illness that prevents you from working, they provide you with an income protection as home-based businesses don’t usually have sick leave.
If your business uses a company vehicle, it should be insured to protect the business against liabilities if there is an accident. However, if you are using your own personal car for your business, your own personal insurance should cover it in the event of an accident.
Business Interruption Insurance
This insurance helps cover any financial losses due to a lawsuit or catastrophic event. Disasters such as floods or cyclones can prevent your business from operating. In turn, your business will suffer a loss of income as you and your staff would not be able to work either at the office, work site or factory. This insurance is essential to businesses that have a physical location and it compensates for the lost income during these events.
Have a chat to your insurer to see if there are any package deals better tailored to your business. You can then have peace of mind knowing that you and your business are covered should anything go wrong.