If you’re wondering what business insurance is for, it’s a type of policy designed to offer cover to businesses for business-related risks. This can come in a variety of shapes and forms, each of which can serve a different purpose and include protection for a separate set of unexpected circumstances (provided they meet your insurer’s qualification criteria and terms and conditions). Some of the policies which are available to Melbourne businesses include:
Public liability insurance
Public liability insurance can cover your business if a member of the public is injured or their property is damaged as a result of your business activity, subject to the terms and qualification criteria set by your insurer. You can generally choose your level of coverage, which will generally either be $5 million, $10 million, $20 million or a greater sum as negotiated with your insurer if you need it.
What it covers:
- Third-party personal injury claims
- Third-party property damage claims
- The legal costs of defending yourself
Product liability insurance
Product liability insurance may be able to offer your business protection against claims a product you supplied, whether manufactured by you or imported and sold, caused harm to a third party or damaged their property. This type of insurance may come with similar levels of cover available to public liability insurance.
What it covers:
- Claims that a product you supplied caused sickness or injury
- Third-party property damage claims
- Legal fees to defend yourself against such claims
Professional indemnity insurance
Professional indemnity insurance can offer cover against claims the advice you gave or service you provided was negligent, sub-standard or caused loss or harm. It may also cover circumstances such as mistakes, incorrect diagnoses, miscalculations and breach of duty. Cover can start at $250,000 and may go up to $10 million (though more may be available by individual negotiation).
What it covers:
- Payment of compensation
- Payment of damages
- Legal defence costs
- Cost of defending yourself during investigations
General business insurance
General business insurance is an insurance package which can offer coverage against other risks facing your business, such as your physical premises and assets.
What it covers:
- Fires, storms, water damage
- Explosions and impacts
- Accidental damage
- Theft following forceable entry into a locked building
- Theft of equipment which is securely attached to a vehicle
There’s also a variety of insurance types which can be included under your general policy, which may include public and product liability and professional indemnity insurance. There are other insurance types which may be included either for an added premium or automatically, such as:
- Commercial property insurance (which may offer a higher level of protection for your business premises)
- Glass breakage (which is a common business insurance exclusion)
- Business interruption (which can cover your bills if you have to close your business while recovering from an insured event)
- Cyber liability insurance (which can protect you from many forms of cybercrime)
- Tax audit (which can cover some of your costs if you’re subject to an ATO audit)
- Management liability (which can offer cover to business owners and directors against claims of mismanagement)
Accident and sickness insurance
Accident and sickness insurance can cover self-employed individuals who are injured or suffer an illness which prevents them from working and earning a living. The way the benefit works is slightly different to other policies in that it can offer an ongoing payment worth up to 85% of your income (provided it meets your insurer’s terms and conditions). You may be able to choose a benefit period of either one or two years and a waiting period of between seven and 28 days.
What it covers:
- Loss of income as a result of illness
- Loss of income as a result of an accident
- Optional extras including death and disablement benefits