The key role of business insurance is to offer protection against the risk of potential financial loss.
Generally, insurance provides protection in case someone else is harmed by the actions of your company, or if your business is damaged by incidents like fire.
Suitable business insurance is also important to show your business’s credibility.
For example, if you are a contractor, a client may only offer you a job on the basis that your liability insurance can cover any potential damages or injuries at his property.
If you don’t have public liability, they may not work with you and instead look for an insured contractor. Situations such as these can put a huge question mark over your credibility and viability as a business owner.
Commercial insurances are not a “nice to have” —they are essential as all small businesses deal with an element of risk daily, regardless of their type.
Here we have rounded up some of the benefits of having commercial insurance for your small business.
Ensuring Protection against Claims:
We live in a society where getting sued is getting more common – even over small issues. Not everyone is forgiving. In the event of a lawsuit or claim; without sound insurance in the place, your business could be over.
Maybe, you accidently damage your client’s property while installing their water pipes. Maybe your client gets injury after sitting on a broken chair at your business premises. Maybe a client sues you for the negligence or error in service.
You may have to fork out a lot of money to defend your case, let alone to pay any damages decided by the court.
Opting for the right business insurance can ensure protection against such claims. For example, professional indemnity insurance can protect you against legal costs and claims for any financial damage due to your professional advice or action. Public liability insurance can protect against the claims of injury and property damage that someone else suffers due to your business operations.
Required by the Law:
In Australia, it is mandatory for businesses to have certain insurances. For example, Workers compensation insurance is compulsory to protect your employees in the event of accident or illness. Third-party personal injury insurance is required to cover the personal injury caused by your business vehicles. Public liability insurance is also compulsory for certain businesses.
Improving piece of mind:
Business insurance gives you peace of mind against certain risks. And this helps your energy to your core business; without having to worry about potential threats. With a positive mindset, you can increase your productivity and focus on maximizing your profit.
Keeping Business Up and Running:
There are many risks that can bring your business to halt. If storm, fire or a major theft forces your business to grind to a standstill, or a minor emergency like a damaged water pipe affects your operations, how would you cope if you are covered with insurance?
Certain business insurances, like Business Interruption cover, can help you resume your operations. It can compensate for the loss of income, as well as covering operating business expenses of operating business such as wages.
Insurance can also help business partners run their venture after the death of one insured partner. For example, they can be provided with certain amount at the time of death. Each partner might be insured for the amount of his interest in the partnership and his nominees might get that amount at the death of the partner.
It is clear small business need suitable business insurance.
It is important to choose the right business insurance to cover your requirements. Ponder over your potential risk factors, budget and other things while considering small business insurance for your business. Talk to people in your industry and ask for recommendations, especially if you belong to high risk industries such as construction, food and professional services. Rates might vary based on insurers. Look for an insurer who can provide you appropriate coverage at reasonable rate. Also, make sure the insurer specializes in your industry and knows the ins and outs related to the risk and covers.
*Important: Cover may be available subject to meeting insurers underwriting criteria. Some of the covers listed may or may not be available or may have limitations or exclusions. Cover inclusions vary significantly from insurer to insurer. DO NOT rely upon the above. Check your policy schedule carefully for inclusions and exclusions and limitations. Talk to a business insurance broker for more information.
Romit Malhotra is the brand representative of Smart Business Insurance, a leading Australian insurance broker. A big foodie, he loves to travel the world. Also, a diligent businessman, Romit likes to pen down his thoughts on related topics whenever he finds some free time.