Types Of Business Insurance

Find out what the different types of business insurance available in Australia are with Savvy today.

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, updated on July 17th, 2023       

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If you own a small business, there are many types of business insurance that you may need to consider. Deciding which type is most appropriate for you may seem a daunting task, so it's important to understand how each of these types of cover works. 

You can find out more about what business insurance policies you can choose from right here with Savvy. Our comprehensive guide breaks down the different types of cover to help you understand how each of them works and determine which are most suitable for your needs with more confidence.

What are the different types of business insurance and what do they cover?

These are the main types of business insurance that can protect every aspect of your company: 

Workers compensation insurance 

Workers compensation is compulsory insurance in Australia which covers the cost of workers’ wages if they’re unable to work because they are hurt or injured, and provides compensation if they suffer permanent injury or even death due to a work-related incident. It also covers the cost of rehabilitation and any modifications needed to the person’s home or office to assist them to cope with a permanent disability.  

Public liability insurance 

This is another form of business insurance that may be compulsory for certain businesses and public events. Public liability insurance protects you and your staff against legal action in the event a third party is hurt or injured, or their property is damaged, whilst on your business premises. This includes another person’s property which was in your care or possession at the time it was damaged. 

Professional indemnity insurance 

If your line of work includes giving advice or performing a service, professional indemnity (PI) insurance is a must-have. It protects professionals from being held liable for damages and covers the expense of defending yourself in court against claims of negligence, omission or breach of duty while doing your job. This can include anything from unsuccessful surgery to giving financial or legal advice which turns out to be incorrect. 

Product liability insurance 

Product liability insurance will protect you against claims that your goods are faulty, dangerous, or caused harm to a third party. It can include any type of claim from an allegation of food poisoning at your restaurant to a building collapse due to the steel or concrete you supplied for the foundations. Note that you don’t have to manufacture the faulty product yourself: you can still be found liable for supplying a faulty product even if you just packaged, advertised or retailed it on behalf of the manufacturer. 

Building and contents insurance 

This insurance covers your basic assets from events such as storms, fires, impact damage, accidents, theft and malicious damage. If you’re renting your business premises, ask your landlord if they have insurance that covers your actual building, as you may not need building insurance as a renter. However, you may still need building contents insurance, which can cover all the business equipment in your shop, factory or office. Check whether your contents cover includes items that may not be in the office when they suffer damage, such as laptops and other mobile equipment.  

Business interruption insurance 

If your business is unable to earn revenue due to an insured event like a storm, fire, flood or impact, business interruption insurance can pay your workers’ wages, your utility bills and the cost of relocation and rent if you have to move whilst your usual place of business is being repaired or replaced. It can protect your business and allow it to recover from a catastrophic event that would normally prevent your business from operating. 

Commercial vehicle insurance 

Choose from third-party property, fire and theft or fully comprehensive insurance to protect your commercial vehicles including cars, utes, lorries, vans, trucks and tractors. Insurance for commercial vehicles is entirely different from the retail car insurance policy you may have which protects your family car. 

Cyber liability protection 

This protects all your online systems and data from cyber attacks, which could involve a hacking attempt, your website being defaced or stolen, client data compromised, or a ransomware or data hijack attack. Cyber liability insurance will cover the cost of repairing the damage, retrieving your stolen data and defending your company's reputation through legal action or investigation should you suffer such an incident. 

Management liability insurance 

Management liability insurance protects the company plus the managers and directors against the risks and exposures of running the business. It covers liability for mismanagement, including allegations and acts of misconduct, legislative breaches, claims of unfair dismissal and sexual harassment. It includes the cost of defending your company and managers’ reputations against defamation and can cover the cost of fines and penalties imposed if there is a negative legal outcome. 

Small business insurance 

General business insurance, often called small business insurance, is a package encompassing a range of different types of insurance which a small business may need. It can include cover for such items as building contents, general property, glass breakage, portable possessions such as mobile phones and laptops and provides generic cover against fire, theft, storms and accidental damage.  

It may or may not include public liability insurance, or this type of insurance may be offered as an additional optional extra if required. It can even include such extras as tax audit protection in case the tax office decides to conduct an audit of your business. 

How do I work out which types of insurance my business needs?

There’s no ‘one size fits all’ when it comes to business insurance, as all businesses carry different risks. The type of business insurance you need will depend on: 

  • what industry you’re in 
  • the type of business you run 
  • where you’re located 
  • how many people you employ 
  • what products or services you offer

As discussed, there are many different types of insurance which can cover all aspects of running a business. Broadly, these protect the fundamentals of any business, which are: 

  • your physical assets – buildings, vehicles, plant and machinery 
  • your people – customers, clients, employees and workers 
  • your income – the ability of the business to continue to make money 
  • your liability – the risks you take when you offer any product or service to the public 
  • the intangibles – your reputation, goodwill, intellectual property, business secrets, cyber security

To work out which types of business insurance you may need, ask yourself the following questions to narrow down your options: 

Do you have staff or employees working for you? 

If the answer is yes, you’ll need workers compensation insurance, as this is compulsory in Australia for all employers.  

Do you sell goods directly to the public? 

The definition of ‘goods’ is very broad, and includes not only single products for sale but food, drinks and consumables too. This includes restaurants, cafes and takeaway food businesses such as bakers and pizza shops. Intangible goods such as downloadable music or e-books are also included in this definition. If your answer is yes, you should consider product liability insurance.  

Do customers or clients come to your business premises? 

If you have any contact with the public at all, which includes visiting customers or clients or dealing with their property, you should strongly consider public liability insurance. 

Do you give advice, offer a professional opinion or provide a professional service? 

This covers many different occupations such as medical, legal and financial practitioners, but also allied health professionals such as occupational therapists or fitness coaches. If you’re in any profession which offers advice or service, you should consider professional indemnity insurance.  

Do you do most of your business online or rely on technology to provide your main source of living? 

This could apply to any business which mainly involves IT, relies on databases or computer systems, or involves the transfer of information. Examples include most online businesses, banks, other finance and insurance businesses and computer-dependent occupations such as graphic artists and illustrators. If this describes your business, you should consider cyber liability insurance. 

How do I compare different types of business insurance?

Once you’ve decided what type of insurance you need, it’s time to work out which exact policy is the best one for your business. Here are some aspects of insurance you should compare: 

  • Cost – naturally, this is a major consideration, but the cheapest policy isn’t necessarily the best. Concentrate on the coverage the policy offers first, but make sure you aren’t paying more than you need to. 
  • Inclusions – this is the most important aspect of your policy. Read exactly what benefits the policy offers and make sure it covers all areas where you feel insurance is important. 
  • Exclusions – it's just as vital to check out what isn’t included in your policy as what is covered. Common exclusions include glass breakage and flood damage if you happen to live near the sea or a major river system.  
  • Limitations and maximum payouts – find out how much monetary coverage the policy offers you and if there’s a maximum payout figure provided. Compare these limits and ask for more cover if you feel the amount on offer is insufficient. 

How to choose the right type of insurance for your business

Types of business insurance

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More of your frequently asked questions about types of business insurance

What is a business insurance multi-product discount?

A multi-product discount is offered by some insurers to entice customers to bundle their insurance with the same company. It’s a way of rewarding loyal customers for having all their insurance with one insurer.  

Can I get business insurance for a one-off event?

Yes – public liability insurance is frequently offered for one-off events such as music festivals or concerts, street parades, community fairs or garage sales. This insurance is usually quite cheap and covers the event organiser for a specific event on a named day. 

Which factors impact the cost of business insurance?

The cost of your business insurance will be impacted by the following: 

  • the type and nature of your business 
  • the size and turnover of your business 
  • how many employees you have 
  • which state you are in 
  • whether you’re in a remote country or city location 
  • your insurance claims history


Although workers compensation insurance is compulsory across Australia, the cost of it will vary from state to state. For example, if you employ workers in Perth and wish to get insurance in WA, the premium rate is 1.82%. In other states, however, this rate is up to 2.2% of the combined value of your wages bill. 

Is a small business insurance package worthwhile?

Business insurance packages often offer the best value for money and are a cheaper form of insurance than having multiple policies. It’s also possible to get a no-claims bonus applied if you already have another form of insurance with the same company. However, make sure you aren’t paying more than you’d otherwise need to for insurance which isn’t necessary. 

What type of insurance do I need as a sole trader?

The type of insurance you’ll need as a sole trader is not so much reliant on the size of your business, but rather the risk your business activity poses. If you deal with customers, you may need public liability insurance. If you visit clients and work a mobile business, you may need portable equipment insurance to cover the tools of your trade. 

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