What Insurances Should You Consider For Your Business?

Running a business comes with plenty of risks, but the right business insurance can offer peace of mind and essential protection when things don’t go to plan.

In this guide, we explore the key types of insurance every business owner should consider to safeguard their operations, assets, and people.

Worker’s Compensation Insurance

Worker’s Compensation insurance provides benefits if a work-related incident occurs, so it’s essential to have it for anyone you pay or employ in your business.

As the business owner, it’s up to you to purchase Worker’s Compensation to protect you and your workers.

Anyone who employs paid workers is required to take out a worker’s compensation policy, unless the worker:

• Is a contractor under the definition used in that state. Read more here about the difference between an employee and contractor. 
• Earns less than a specified amount per year. This amount is generally less than the equivalent of full-time minimum wage, so you will usually be above this amount with normal employees in normal circumstances.

Worker’s Compensation insurance won’t pay out benefits when…

• Injury results from serious and wilful employee misconduct.
• The injuries were deliberately self-inflicted. 
• The employee provides false information.
• You’ve taken reasonable action as a business owner.

Public Liability Insurance

Public Liability insurance protects you if someone dies or gets injured as a result of your negligence.

If you interact with the public and/or customers for your business operations, you will need this insurance.

It covers things like legal costs and compensation if, for example, a customer slips and falls at your premises or their property is accidentally damaged during your work.

But what doesn’t it cover?

It doesn’t cover injuries to your staff, damage to your own property, or claims related to professional advice or services.

You will need other insurances mentioned in this blog for that!

Third-Party Personal Injury Insurance

If you or your employees operate motor vehicles for your business, then it is mandatory to have Third-Party Personal Injury insurance. This covers you if a personal injury claim is made against you due to a motor vehicle.

You will need to pay for this when you purchase the vehicle.

It’s important to remember that Third-Party Personal Injury insurance does not cover any damage to your own car, someone else’s vehicle, or any property involved.

These business insurance types will heavily depend on your business type and the industry you’re in. Please speak to your Aintree Group adviser to discuss which insurances are needed for your personal circumstances.

Building and Contents Insurance

Building and Contents insurance covers for any damages to your business premises in the event of a natural disaster or break-in.

Business Expenses Insurance

Business Expenses insurance provides a monthly sum of money to the business owner if they’re unable to work. This will be paid out for a year so that bills and other expenses can still be paid.

Business Interruption Insurance

Business Interruption insurance covers loss of income due to disruptions in business operations, such as natural disasters or other unforeseen events.

Burglary Insurance

If you experience any theft or a break-in at your business, Burglary insurance covers any losses relating to it.

Cyber Insurance

Cyber insurance covers your business for any losses relating to cybercrime, such as a data breach.

We’ve all seen the impact the recent cyber attacks have had on large, well-known businesses – this insurance may be worth investing in if you hold customer data.

Employee Dishonesty Insurance

Employee Dishonesty insurance protects an employer from financial losses caused by fraudulent or dishonest acts committed by employees including stolen money or property, embezzlement and fraud.

Life Insurance

Life insurance covers you in situations such as death, severe illness or injury.

There are four main types of life insurance:

• Income Protection insurance provides a replacement income if you are unable to work due to illness or injury.
• Total and Permanent Disability insurance: If a person is permanently disabled and unable to work, they can receive a lump sum payment to cover the cost of rehabilitation and living expenses.
• Trauma insurance covers you if you’ve been diagnosed with a severe illness such as cancer or a heart attack.
• Death/Life cover: An amount of money is paid to a nominated person if you pass away to assist them financially.

Machinery/Equipment Breakdown Insurance

Machinery or equipment breakdown insurance covers the cost of repairing or replacing machines or equipment that break down unexpectedly.

Management Liability Insurance

Management Liability insurance covers the business for any unethical or illegal acts performed by managers or directors.

Professional Indemnity Insurance

Professional Indemnity insurance is essential for businesses providing professional advice or services to protect against claims of negligence or breach of duty.

Note: We have Professional Indemnity Insurance at Aintree Group for all business units as we provide professional advice to our clients!

Product Liability Insurance

If your business sells products, Product Liability insurance protects against claims of injury or damage caused by those products.

Property Insurance

Property insurance covers damage to business property due to events like fire, theft, or natural disasters.

Stock Deterioration Insurance

Stock Deterioration insurance helps cover the cost of spoiled or damaged stock like food or medicine if your fridge or freezer breaks down, or there’s a power outage.

What happens if you don’t have the mandatory business insurances?

Running a business without insurance leaves you vulnerable to many risks, including financial loss from injuries obtained in the workplace, property damage, natural disasters and cyber attacks.

Business insurance protects you from unexpected events and incidents so they’re crucial to business sustainability – you never know what’s around the corner!

If you don’t have the compulsory business insurances like worker’s compensation insurance, you could face legal and financial consequences.

Is business insurance tax-deductible?

The Australian Taxation Office (ATO) states that businesses can claim a tax deduction on any operating expenses of the business. And business insurance falls under their definition of ‘operating expenses’.

Note: As always, please get tax advice from your adviser about your deductions and the ATO’s rulings.

Unsure which insurances your business needs? Get in touch with our team today!

This is general advice only and has not been prepared with your situation and needs in mind. For individual and personalised advice, we highly recommend that you seek out proper professional advice from your financial adviser.