Business insurance can be divided into three categories:

• assets and revenue
• liability
• personnel.

There are many different insurance policies available to small businesses, though few businesses will need all the types available.

Commonly used insurance policies are:

Fire and other perils – designed to cover the building, contents and stock of the business against fire, earthquake, lightning, storms, impact, malicious damage and explosion.

Business interruption or loss of profits – provides cover if the business is interrupted through damage to property by fire or other insured perils. Ensures that anticipated net profit is maintained, pays employee wages and pays additional costs of alternative facilities.

Burglary – covers theft of property and damage from break ins.

Workers’ compensation – compulsory for businesses employing staff. Workers’ compensation insures employees against injury or death in the workplace. The workers’ compensation system in New South Wales is administered by WorkCover.  

For more information, contact the WorkCover Assistance Service on 13 10 50.

Personal accident, income protection or sickness – self-employed business owners or subcontractors are not covered by workers compensation insurance. Consider insurance to compensate for loss of income because of death, illness or accident of the business owner or a key employee.

Money – covers loss of money being taken to and from the bank and while held on business premises.

Public liability – covers compensation for non-employees (third parties) property damage, injuries or death as a result of business operations. This is usually a compulsory requirement by Landlords.

Directors and Officers' Liability – protects the individual director and officer against legal costs and possible damages in defending allegations of Wrongful Acts in their capacity as a director or officer in the management of a company.

Electronic equipment – to cover loss or damage of equipment vital to business operations.

Machinery breakdown – covers breakdown of mechanical and electrical plant.

Professional indemnity – protects the business from legal action taken for losses incurred as a result of following advice from the business. This insurance is expensive but vital for consultants and professionals

Product liability – covers damage or injury caused to another business or persons through failure of a product sold, imported or modified by the business.

In determining the insurance needs of a business, consult a knowledgeable Insurance broker. They can understand your business and advise you of the costs and benefits  of insurance premiums.