What is small business insurance?
All small business owners know there is plenty of risks involved in running your own business. Whether its fire or storm damage, expensive lawsuits or the pain of theft and burglary, there is a plethora of potential hazards that can destroy all the hard work you’ve put into your business.
This is where small business insurance comes in. It is specifically designed to protect you and your business against a large variety of risks that have the potential to impact the financial position of your business. As with any other forms of insurance, small business insurance is all about peace of mind. It offers the confidence you need to continue running your business as you see fit, with the security of knowing you will be protected if something goes wrong.
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Table of contents: Business Insurance for Home Based Business
Business Insurance for your Home Office
What type of home business insurance do I need?
What does Small Business Insurance Cover
Home office insurance Exclusions
Home office insurance FAQs
Business Insurance for your Home Office
Insurance cover is important for any business owner, including those who run a business from a home office. Having the right level of cover in place is essential for the financial security of your operation, so before you go shopping for a policy it’s a good idea to sit down and determine exactly what you do and don’t need cover for.
Ask yourself what risks your company faces and what the likelihood is of those risks becoming reality. If a potentially damaging event did occur, what would the financial consequences be for your company?
The exact type and level of cover you will require will depend on the nature of your home office-based business. Will you need public liability cover for clients and customers who visit your office? Will you need cover for your computer equipment and office machinery? What about workers’ compensation cover, protection against fire and storm damage, or cover for costs resulting from business interruption? Take the time to carefully consider your needs before you take action.
Remember that standard homeowner insurance policies generally do not provide any cover for home-based business activities, so you need to ensure that your business has adequate protection in place.
What type of home business insurance do I need?
Finding the right type of business insurance for home based business is not an easy task. In fact it can be downright painful, but it’s a necessary step for every business owner to take. Things can go wrong at any stage, so it’s important to assess the risks your business regularly faces.
If clients or customers visit your home-based office, public liability cover is an essential consideration. Damage from fire or storms to your office or your business equipment can be extremely costly, so it’s typically worthwhile to take out some form of business property cover.
There is also a whole range of other questions you can ask yourself to help determine what type of cover you need. These include:
Do you have employees?
Do you have vehicles which are used for business purposes?
Do you offer advice or a professional service to your clients?
How much electronic equipment do you have in your home-based office?
Asking yourself these questions now can save you a lot of stress in the long run.
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What does Small Business Insurance Cover?
Small business insurance is specifically designed to protect your business against a range of potential risks. There is a wide range of cover options to choose from and features will vary from one policy to the next, but small business insurance typically provides cover for:
Public and products liability. This feature covers your business when a third party is seeking damages for personal injury or property damage that has occurred as a result of your business dealings.
Material damage. This provides business with cover against damage to your business building and contents caused by a range of unforeseen events, such as floods or fires. You can also cover your business for glass damage as an optional extra but whether or not this option is necessary for your home-based business is up to you.
Business interruption. Business interruption insurance protects your business against the loss of income, which is the result of your business no longer being able to trade because of an unforeseen occurrence. For example, if a wild storm causes extensive damage and your business can no longer trade or is forced to operate in a limited capacity, business interruption insurance provides cover for the loss of income you suffer as a result.
Theft. Theft cover offers protection against the theft or vandalism of business property and equipment. You can also elect to take out cover for loss of money, a feature which also includes cheques and credit cards.
Property. This covers the accidental damage of business equipment that is insured.
Personal accident. If you or one of your employees is involved in an accident that leads to them becoming permanently disabled or even dying, a benefit will be paid under this type of cover.
Home Office Insurance Exclusions
Just like any other form of cover, home office business insurance policies will also have a number of exclusions. Exclusions on policies will generally differ from one insurer to the next, but claims will typically not be paid if:
They are related to war, invasion, civil insurrection or evolution
They are for consequential loss of any kind
They are false or fraudulent
You, or someone else with your knowledge, intentionally cause the loss or damage
They relate to acts of terrorism
They relate to the destruction, corruption or misappropriation of electronic data
They relate to damage caused by a computer virus
They relate to damage caused by a bushfire or a named cyclone
They relate to your failure to comply with any relevant statutory obligations or laws
The loss or damage to your buildings, contents or stock occurred while buildings are subject to construction, erection, alterations, repairs, maintenance or demolition.
Home Office Cover FAQs
What sort of policy do I need?
Unfortunately, it’s simply not possible to provide a stock answer to this question. The amount and type of cover your business requires can depend on a whole range of factors, including everything from the nature and location of your business to the number of employees you have. Take the time to carefully assess your cover needs before you go searching for a policy.
Is the cheapest policy the best one for me?
As with most other things in life, you get what you pay for. While cost is an important factor in any business decision, just because a policy is cheap does not mean it is right for you. It’s important to compare the features and exclusions of competing policies in order to determine the true value of each one.
Should I purchase insurance direct or through a broker?
Once again, the approach you decided to take is entirely up to you. Some prefer the relatively easy and straightforward process of buying cover direct, while others prefer to take advantage of tailored advice from an experienced broker. Each approach has its own pros and cons so consider your options carefully.
How do I make a claim?
Your insurance provider will be able to give you instructions on how to make a claim. Claims can often be made online and you will usually need to provide supporting evidence.
Compare quotes from multiple insurance providers and make sure to take the time to read policy documents closely. Compare policy options at finder.com.au and seek assistance from an insurance consultant if if necessary.
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