From the day a business person starts a business, he or she exposes themselves and their business to certain risks. This is a well known and accepted notion. However, now more than ever, business owners are faced with increased business risk in their day to day operational settings and underestimating or failing to manage a risk can become problematic.
Often an organisation may be suffering from a risk event even before knowing or being able to recognise that one is occurring, for example; a HR dispute that spirals out of control. One of the most effective ways to protect an organisation against business risks is to have an adequate and sound insurance program in place. Outsourcing a risk via insurance has long been a feasible, cost effective and robust risk management strategy.
An appropriate business insurance program assists with disaster management in the majority of business risk categories, including:
• Damage to Assets such as Property or Contents and Stock
• Loss of Profits via an event that interrupts the business
• Public liability
• A breach or mistake relating to a professional duty or services
• Investigations by a regulatory authority into services provided (AHPRA etc)
• Vicarious liability resulting from contractors activities
• Theft or Fidelity
• Equipment breakdown
• A criminal Cyber or Data Breach resulting in the loss or corruption of personal or company information and data
• HR or employment disputes
• A breach of the Australian Corporation Act or Australian Privacy Principles
• A breach of the Trade Practices Act
• Tax investigation costs
• Fines and penalties
• Workers’ compensation insurance
• Loss of key member of staff putting pressure on the earning capacity of a business
• Loss or accident when on business related travel
• Motor Vehicle insurance
Property or Business Insurance
The most common policy type that a business will have in place is a Business or Property policy. This ‘composite’ policy is usually made up of several sections of cover that relate to the loss of or, damage to, some sort of business asset. E.g.: content, glass, theft and burglary or loss of income due to an insured event.
Typically, this section covers loss or damage to property.
One of the most misunderstood sections inside a business policy, this section covers the loss of income that will occur when
a business is ‘interrupted’ because of an insured event under the property section of this policy. ie: inability to trade because
of a fire or storm damage. Many studies by reputable authorises and business advisors over the years have found that a business
that suffers a catastrophic event never fully recovers, if at all…unless a Business Interruption cover is in place.
Glass and Money
These sections relate to damage to building signage, window glazing, ceramic fittings, plate window glass as well as the theft of money.
Glass is often a requirement on a commercial lease. You should check your contractual obligations regarding glass cover.
Equipment or Machinery Breakdown
Where your business relies on equipment or machinery to provide a service, i.e.: a dental chair or diagnostic equipment, this policy
section can assist with the unexpected cost of repairs resulting from an unforeseen breakdown of equipment. As an optional cover
under this section of the policy, a business may also wish to insure for lost profits due to a breakdown. This option is ideal if your business relies solely on a piece of equipment to provide services. ie Dentistry or Radiology
Theft of money, negotiable instruments or goods by an employee.
Often a requirement of a building lease, this section covers your business for liability regarding personal injury and property damage, to others – as a result of business activities, but not as a result of professional services. It should not be confused with Professional Indemnity where cover is related to personal injury or loss resulting from professional services.
Loss or damage to property that is not permanently at your usual business location. This section is ideal for phones, iPads or tables and laptops.
Cost of preparation fees accumulated as a result of a tax related investigation or audit.
Questions? Let us know!
The information provided in this website is general advice only and does not take into account your individual needs, objectives or financial situation. Before you decide to buy an insurance product, you should read the relevant Product Disclosure Statement (PDS) available from Insurance Marketing Group Australia (IMGA). The PDS contains important information which will help you understand the relevant insurance product, including what’s covered and what’s not covered and can help you decide whether the product is appropriate for you.