Choosing the right insurance cover is an important part of managing your business, as it helps you manage and reduce potential risks.
You should regularly review and update your insurance, especially when your business grows or changes. For detailed advice and information on the type and cost of insurance to best suit your business, you should consult reputable insurance agents or brokers.
Alternatively, your industry association may refer you to an agent who can provide the right insurance. The final choice of insurance may be made by balancing the costs of the insurance against the risks.
There are many types of business insurance that apply to different businesses and their activities. As a business owner you should ensure you have considered all the forms of insurance that might apply, and take out those you require, as a form of risk management.
Building insurance is generally only required if you own the premises in which your business is located.
If you are conducting a business from your home, the insurer of your home should be notified so that the policy can be noted and the premium adjusted if necessary.
If you are renting your home and using it for business, check that your lease permits this. It is common for a tenant to be required to insure plate glass against breakage in leased premises.
Contents insurance should cover all plant, equipment, fixtures and fittings as well as business stock.
It is possible to insure against theft of cash held on the business premises, in transit or held at home.
Loss of profit
If your business is unable to trade due to the occurrence of an insurable event, ‘loss of profit’ insurance can – with adequate evidence – provide for loss incurred during the period of non-trading.
Public liability insurance provides cover against accidental injury to clients, customers and visitors at or to your business premises. This cover is considered essential to all businesses; cover of up to $5 million is normal for a small retail operation.
Product liability insurance indemnifies you as a manufacturer and/or distributor against injury caused by your product or through the use of your product. It should be noted that if you are an importer or manufacturer you are legally responsible for the products you sell.
Professional indemnity insurance covers professionals and experts against negligence in delivering their services, advice and information to clients.
Vehicles owned and used by the business should be insured, as would your own personal vehicles. If you are using your personal vehicle in the business, the insurer should be notified so that the policy can be noted.
It is common in small business for the successful operation of the business to hinge on the well-being of one person. Insurance cover can be taken against loss of income, in the event of injury, disability or death to the key person. The money provides financial support until a replacement skilled employee is found and trained which may take many months.
Partnership insurance is also available – life assurance owned by one partner on the life of another may enable the survivor to purchase the deceased’s share of the business without having to sell or close the business.
SafeWork SA is the legislative body for all work, health and safety requirements in SA. Their website provides information on your legal requirements for health and safety in the workplace.
For more information phone 1300 365 255 or visit SafeWork SA.