9 Must Answer Insurance Questions
Businesses are exposed to risks, regardless of their size or industry, from external forces. These risks may come from within the business itself, and/or from the general public. Unfortunately, small business owners suffer more from the ramifications of incidents affecting their business. A minor setback for a large company may be terminal for a small business. Especially if the business owner does not have appropriate insurance cover as a means of protection for these situations.
To safeguard investments and even yourself as the business owner, having an insurance policy with the cover you need for your small business is a smart, cost effective, and practical solution.
Various insurance products are available to manage the risks involved in running a business. An insurance broker is able to design an insurance cover for your business. They work to combine these products based on the nature of your business and the extent of coverage your business needs to produce an insurance plan for you.
Since no two businesses are identical, there is no “one size fits all” insurance cover that will be ideal for your business needs. Much like the important aspects of your business, getting the right insurance plan requires careful research and comprehensive assessment in order to achieve an informed decision.
To guide you in this process, here are some basic questions about your business that would help narrow down the types of coverage that your small business insurance plan must have.
1. Do you give advice in a professional capacity?
Sometimes people make mistakes, even the most reputable experts in their given fields. The gravity of the mistake dictates its consequences. For most professionals, such as consultants, architects, engineers or real estate agents, poor advice or an error could lead to a lawsuit from their respective customers, especially if the mistake causes substantial losses.
To mitigate the effects of a lawsuit, having professional indemnity coverage is highly recommended for professionals. Professional indemnity insurance policies cover the legal costs incurred by a professional, and any compensation that may be awarded to the customer.
2. Do you manufacture, sell or distribute products to the public?
Businesses and their owners may be liable for any damages, injuries, illnesses, or death directly caused by the products they supply, deliver, or sell. The same principle also applies to products you have imported outside of Australia.
Product Liability Insurance covers the legal costs of product-related lawsuits, and any resulting compensation that is awarded to the affected customers.
3. Do you provide professional services or repairs?
Similar to products, business owners can be held liable for any negative effects caused by professional services or repairs rendered to their customers. A badly executed repair may not only cause physical damage to the property, but may also lead to serious consequences for the customer.
For example, failing to install lighting fixtures properly may cause bodily injuries due to falling objects, or in worse cases lead to electrocution.
Public Liability Insurance is a critical element for any small business insurance plan. This cover is designed to protect your business from unfortunate incidents due to negligence or oversight. It has a wide range of coverage, including legal costs and compensation to the affected third parties.
4. Do you employ others to help run the business?
Employees you have hired to assist you must also be considered as risk factors for your business. Unfortunately, accidents do happen in the workplace, as much as we try to avoid them. A business owner is required by the Australian government to provide protection for the employees in the form of Workers Compensation Insurance. This insurance covers health care and/or cash benefits for medical needs, provided that their injury or illness is a direct result of their job.
It is not just workplace incidents that an employer must consider, there is also the employee’s integrity that can affect your business.
There have been cases where an employee has been tempted to commit theft or burglary in the workplace. This is more prevalent among small businesses that lack or have insufficient security measures in critical areas. Leaving the business owners to rely on sheer trust on their workers. In these situations you can protect your cash and valuable assets with a Burglary/Theft/Money Insurance policy.
5. Do you rely on certain employees to operate a key aspect of your business?
For some businesses, the success or failure of the operations relies on the presence of key members of the team. If any one of these employees could not work for an extended period of time, the business might experience major losses or delays. This can have a flow on effect not only for the business viability but also affects the customers and other stakeholders as well.
A Key Person Insurance coverage will help alleviate these effects by paying cash benefits whenever an important personnel would be unable to work due to unavoidable circumstances.
6. Do you have important tools or equipment that need protection?
Aside from manpower, many businesses also rely on tools and equipment to operate and perform their respective functions. Particularly those businesses that belong in the service and repair industries. All too often we hear about tools and equipment being stolen from vehicles or worksites.
If you business has specialised tools or equipment then is would be appropriate to have Tools of Trade Insurance. This insurance is designed to protect your business in the event that these specialised tools and/or equipment are lost or damaged on the way to or while working at a site.
Manufacturers that use machines for processing, assembling, or packing goods are also susceptible to interruptions due to machine breakdown.
Computers and other electronic equipment used in the workplace are not exempted from breakage and loss as well. Machine Breakdown Insurance is the right coverage for those who rely heavily on machines. If your business is in the food industry, a Spoilage of Stock Insurance is also a wise choice to cover you in case a refrigeration unit breaks down.
7. Do you own and operate a fleet of vehicles as part of your business?
Vehicles are also business risks that must be considered in the process of securing your small business insurance plan.
A Motor Fleet Insurance is appropriate for businesses that own and/or operate a fleet of more than ten vehicles. This covers not only delivery trucks or service vehicles, but also the business owner’s personal vehicles. It even covers vehicles assigned to senior management and sales representatives.
8. Do you use the internet extensively when operating your business?
Cyber security is becoming a serious concern for many businesses, including small business.
Many business owners have adapted to modern means of enhancing the business through various internet resources, such as e-commerce and digital marketing. Widespread use of the internet may leave a business exposed to hacking, loss of data or breaches to customer’s privacy.
You can insure your business from these attacks by considering the addition of Cyber Liability Insurance to your plan.
9. Allegations of mismanagement or misconduct in the workplace?
Like large corporations, small businesses are vulnerable to lawsuits from the employees and government bodies.
Management Liability Insurance is recommended to protect your business by covering legal costs and other expenses incurred to address such cases. Several types of coverage fall under this policy.
For example, lawsuits due to wrongful termination, and workplace harassment may be addressed by the Employment Liability cover.
Conversely, if one of your employees has committed theft, all legal costs on the subsequent lawsuit against the employee will be covered by this policy.
In the event that the ATO requires your business to undergo a tax office audit or investigation, Tax Audit Insurance will help you get through the costs of preparing and responding to the audit.
Conclusion – Identifying Your Business Insurance Needs
For those embarking on the process of determining their business insurance needs for the first time, all these insurance terms and points may seem overwhelming. This is where an experience insurance broker, insurance experts who gladly help you every step of the way.
Seeking help from insurance brokers not only saves you time, but also assures you that the business has the appropriate protection while still getting you the best value for your money.
Why choose insurance brokers over insurance agents? It all boils down to one simple factor: who they are working for? Insurance agents work for a particular insurer, and are limited to sell only the policies offered by the said insurer. More importantly, their main responsibility ends after you have taken the policy.
On the other hand, insurance brokers, such as Fleurieu & Hills Insurance, are not bound to a single insurer. Upon understanding the risks faced by your business, we have the option to shop around and tailor-fit insurance policies to your needs and budget.
You have the full right to accept or reject the recommendation at no expense from your end. Our responsibility, however, doesn’t end with the selection process. In case you need to make a claim, we will assist you during that difficult time by dealing with the insurer in order to ensure fairness of assessment, and prevent unnecessary delays.
We are here to help you protect your business. A comprehensive small business insurance plan is just a click away. Why spend time going through multiple insurance websites when you could get faster, more in-depth results by getting in touch with us.
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At Fleurieu & Hills Insurance, you are our priority.
This is for general information and general advice only. As always, policies conditions will always apply and claims circumstances always vary from one another.