Business

Most small businesses close their doors, never to reopen, following a major disaster such as a fire, an extended court case or period of business interruption. This is mainly due to inadequate insurance.  

A strategic insurance program, based on advice from MGA Insurance Brokers can help prevent that from happening. Informed decisions need to be made about what to insure and what risks to accept, manage and minimise.

Basically business insurance falls into three categories:

        •  Assets and Revenue - things the business owns and its revenue 
            generating capabilities
        •  Liability - legal obligations arising from injury to others or damage to 
            their property
        •  Personnel - protection against loss arising from personal accident or 
            illness involving yourself or your employees.

Below is an alphabetical list and a brief explanation of the types of policies most commonly used by small businesses. All businesses are different and their insurance needs vary accordingly. Business insurance packages also vary considerably.

        •  Business Interruption - provides cover if business is interrupted 
           through damage to property by fire or other insured peril.  Cover 
           ensures ongoing expenses are met and anticipated net profit is 
           maintained through a provision of cash flow

        •  Burglary - covers the following areas when theft occurs involving violent, 
           forcible entry; loss or damage to stock, goods held in trust and all 
           contents for which you are responsible within the premises.  
           Note: it does not normally cover theft by employees or others entitled 
           to be on the premises

        •  Employee Dishonesty - provides cover for loss of money and property 
           resulting from the dishonest or fraudulent conduct of employees

        •  Employment Practices Liability - protecting employers against claims 
            and legal costs by employees arising from allegations of inappropriate 
            conduct in connection with their employment.  This could include, for 
            example, sexual harassment, wrongful dismissal or discrimination on 
            the basis of age, race, sex or religion

        •  Fire and Perils - covers destruction of, or damage to, your buildings, 
            contents and stock through fire and other perils such as lightning, 
            explosion, malicious damage, earthquakes, storm or water damge.  
            Note: FLOOD caused by an overflowing watercourse, such as a 
            creed or river, isnot covered by most standard fire and perils policies

        •  Goods in Transit - cover against loss or damage to your property whilst 
            in transit, either within Australia or on a worldwide basis, depending on 
            your needs

        •  Loss of Money - cash and items such as postal orders, cheques and 
            stamps are insured against theft from business premises, at private 
            residence or while in transit

        •  Machinery Breakdown - covers equipment against such risks as 
            fusion, breakdown and explosion and can be extended for deterioration 
            of stock

        •  Motor Insurance - all business vehicles should be covered for at least 
            third party property damage.  Cover for damage to your vehicle as well 
            as damage to third party property damage is provided by a 
            comprehensive insurance  policy

        •  Personal Accident, Illness or Disability - covers against your inability to 
            work and the resulting loss of income due to an accident, illness or 
            death. Unless you operate as a propriety limited company, you 
            personally will not be covered by workers compensation

        •  Products Liability - if you sell, supply or deliver goods, even in the form 
            of repair or service, you may need cover against claims of goods 
            causing injury or damage

        •  Professional Indemnity - businesses, which supply advice of any kind, 
            can be sued for financial loss due to errors, omissions or incorrect 
            advice

        •  Public Liability - this cover is very important and usually is packaged in 
            with the products liability cover.  It covers you against claims by people 
            who may suffer injury or damage to property whilst on your premises, 
            while you are working at their premises, or anywhere in Australia (or the 
            world, if the cover permits) whilst conducting the activities or your 
            business

        •  Workers Compensation - this cover is compulsory in all states and 
            territories.  It covers claims arisimg from the death, injury or illness of 
            employees arising out of thier employment (under workers 
            compensation law, or common law) and includes legal costs.

In addition to those listed above, there are other risks, which are relevant to the particular nature of a variety of businesses.
For example:

        •  Directors & Officers
        •  Electronic breakdown and resulting business interruption
        •  Fidelity Guarantee
        •  General Property
        •  Glass or sign breakage
        •  Legal expenses/Tax audit
        •  Management liability
        •  Product recall
        •  Trade credit
        •  Transit

Please note, the various risks mentioned above do not constitute a definitive list. They are an elementary guide to the types of insurance your business may need.  

Risk management programs are often part of the insurance process. Risk prevention and loss prevention strategies often reduce the risks, thereby reducing premium costs.  

We suggest you talk to a broker to find out exactly what cover your business requires.  

Contact your nearest broker to enquire further about business insurance or to obtain a quote for your business