Business insurance is an essential investment for every business, whether you’re a bustling start-up or well-established company. The type of insurance that will best serve your needs will vary, depending on your business type, size and your main trade.
Figuring out exactly what you need from your business insurance policy can get complicated – so here are the three must-have business insurance facts to consider.
1. Your personal insurance policies won’t cut it
This is a common mistake for entrepreneurs and home business owners in particular. It’s easy to assume that your own home, contents and car insurance policies will be enough to protect your business interests, especially in its early stages.
Personal insurance policies will rarely cover your business for financial losses, lawsuits, or any other bumps in the road you may encounter. Your business is a separate entity from your personal assets, so it needs a separate insurance policy.
2. There are some things every business needs insurance for
The insurance needs of individual businesses will vary greatly. But at the same time, there are some things that no business can afford not to insure. The must have-items on your business insurance policy include workers’ compensation, public and products liability and property insurance, according to business insurance providers like NRMA.
Workers’ compensation covers yourself and your employees for injuries sustained while working, including medical bills, rehabilitation and loss of income. Occupational health and safety and work health and safety laws in most first world nations require employers to provide their workers with adequate workers’ compensation in the event of a work-related accident or illness.
Public and products liability protects you from any negligence associated with your business that results in injury, death, damages or financial loss to a third party. Whether you employ trades people or you have a retail business, having public and products liability will protect your employees and customers.
Property insurance protects your business premises and contents against loss, theft or damage. This insurance item covers your property at your business premises and when you take property with you to a work site or client meeting. This type of coverage is essential for almost every business, but exactly how much you need will vary. Businesses with large investments in stock or premises will need comprehensive coverage, whereas businesses with little inventory have a basic cover option.
These three items make up the basic foundations of an effective business insurance policy. They protect you against events that could cause significant financial losses and damage to your business that could be difficult to recover from, as well as fulfilling your legal obligations.
3. The rest has to be tailor-made
Insurance for business will always come down to the type, size and rate of growth of your business. The scope of one business insurance policy will be vastly different to that of another, and for good reason. No two businesses are the same, and neither are their insurance needs or priorities.
Businesses in retail or hospitality will inevitably need much more coverage for their inventory and contents than consultancies or professionals. In contrast, consultancy-based businesses may consider more inclusive coverage for professional indemnity.
Once you have determined which parts of your business are at greater risk than others, you can begin to tailor the right business insurance policy for your needs.