Week 4. Insurance
One reason why people don’t set up businesses or start-ups is the risks associated with them. Regardless of how much research you have done, there will always be risks with running your own business or start-up. Insurance is a way to counter this risk, and some types of insurance policies available on the market include:
Public Liability Insurance
One of the most important policies you can take out is public liability insurance. It covers you if you are responsible for an injury to a person or their property in connection with your business. It is extremely important to have a public liability insurance policy if you have a business. You might think your business is low risk but as with everything, you don’t need it until you need it! We don’t recommend you start a business without this.
Workers’ Compensation Insurance
Workers’ compensation insurance covers your employees if they injure themselves at work. Most Australian states have a mandatory workers’ compensation scheme requiring businesses that employ workers to obtain and maintain a workers’ compensation policy. It’s important to know whether you need a workers’ compensation insurance policy, especially if you hire contractors as they can also be deemed to be workers. There isn’t a national workers’ compensation system, so you may require a policy in each state that you operate in if you employ workers multiple states.
Professional Indemnity Insurance
Professional indemnity insurance covers your business if another party suffers financial loss, personal injury or property damage due to your provision of professional services. It includes cover for any error or omission on your part. Generally, you would have professional indemnity insurance cover if your business provides advice or a service, for example if you’re in the advertising or management consulting industries.
Business Interruption Insurance
Business interruption insurance covers the loss of profits that your business may incur as a result of an event, for example a fire to your premises, which causes an interruption to trading.
Key Man Insurance
Key man insurance can protect you in the event something happens to your key personnel (such as your CEO, Managing Director etc.).
Income Protection insurance
If you are taking a salary from the business, you may be able to get income protection insurance to guarantee that you will continue to be paid an amount in the event something happens to you and you can’t work anymore.
A good business broker can advise you on the best insurance to suit your business’ needs. Merton Lawyers has long standing relationships with several brokers experienced in advising new businesses and can point you in the right direction.
*Please note this is a general guide only and should not be used in place of obtaining our advice.