Business insurance is critical to the continuity and stability of your business operations. But which insurance is right for your business? There is no one-size-fits-all solution as each business has unique requirements. A building and trade business will have different needs to a medical practice or an accounting firm. Some insurances are compulsory, and some are advised but not mandatory.
Ultimately your business insurance should form part of your strategic plan for growth. At Port Phillip Group, we look at business insurance as a strategic investment that underpins the resilience and longevity of our business by complying with legal requirements, managing risk effectively, protecting our assets, and addressing potential liability issues.
Below is a checklist of the most important types of insurances for businesses.
Workers’ Compensation Insurance
If you have employees, then it’s generally compulsory to have Workers’ Compensation Insurance. This insurance is designed to protect employees by providing financial support in case of work-related injuries or illnesses. It covers medical expenses, rehabilitation costs, and a portion of lost wages for injured workers. Businesses can fulfill their duty of care towards their employees and ensure that injured workers receive the support they need.
Public Liability Insurance
While not mandatory, Public Liability Insurance is advised for businesses that interact with the public or operate in public spaces. This insurance covers legal costs and compensation payments in case a third party (such as a customer or visitor) suffers injury or property damage due to the business’s activities or on the premises.
Professional Indemnity Insurance
If your business provides a professional service, then Professional Indemnity (PI) Insurance is essential. It protects professionals against legal costs that may arise out of errors, omissions, or professional negligence. However, it does not protect against financial losses that arise from a breach of duty. PI insurance is important for professionals such as health and medical practitioners, consultants, lawyers, accountants and more. In some industries it is a mandatory requirement to have PI insurance.
Product Liability Insurance
Businesses that manufacture, distribute or sell products should consider product liability insurance to protect against claims for property damage or bodily injury caused by their products. Product liability insurance covers legal expenses, compensation payments and other costs associated with product-related claims.
Business Property Insurance
Property insurance protects your assets, building and contents against theft, accidental damage, fire, and storms. Business assets include but are not limited to the business premises, trading stock, tools of trade, electronic equipment such as computers and other assets required to run your business.
Income and Revenue Insurance/Business Interruption Insurance
If your business is exposed to an event such as a fire or a storm, this could bring your entire business operations to a halt. Business interruption insurance protects your revenue while you rebuild your business operations back to normal. It helps pay your ongoing expenses and maintains profits over the insured period. Business interruption insurance includes cover for loss of income and additional expenses incurred because of the unexpected event.
Tax Audit Insurance
Dealing with ATO audits can be time consuming, expensive, and stressful. Tax Audit insurance is designed to protect both individuals and businesses against the costs associated with a tax audit or investigation. This insurance typically covers the professional fees incurred in responding to the audit including those of accountants, tax advisors and lawyers.
Cyber Liability Insurance
In 2023, 60% of all cyberattacks were on small and medium businesses https://portphillipgroup.com.au/why-is-cybersecurity-important-for-small-business/ and the average time to resolve an attack increased from 23 days to 51 days. This is more than 100% increase in downtime to recover from a cybercrime against your business.
Therefore, this insurance is becoming increasingly necessary. Cyber liability insurance protects against cyber threats like data breaches, hacking, and ransomware attacks. It covers expenses for data recovery, legal fees, and regulatory fines.
Working with a professional business broker will help you develop an insurance strategy that strengthens the foundations of your business and gives you the confidence to grow. Having these key insurance policies in place will ensure that your business operates responsibly and mitigates potential liabilities, creating a safer and more secure business environment for everyone involved.
Give us a bell
We’re here to help if you need some advice on where to start. Please give us a bell on (03) 8790 7700 or email us at reception@portphillipgroup.com.au. Our accountants are in Mt Eliza, and we support local businesses across the Mornington Peninsula and throughout Melbourne.
