Starting a New Business? What Insurance do I need?

Important Risks to protect

Liability insurance and Professional Indemnity

If you own a business, you can be liable for damages or injuries to another person or property. Though liability insurance is mostly optional, you might want to consider it for your business if the likelihood of legal action is high.

In some industries, liability or professional indemnity insurance is mandatory before you can legally operate.

The types of liability insurance available vary and some are more relevant to certain industries or occupations. Find out more about each of the liability insurance options below:

Public liability

Public liability insurance helps protect you and your business against the financial risk of being liable for negligence. Negligence is causing reasonably foreseeable harm, including:

• injury or death, such as drink or food making a customer sick
• for some occupations, negligent advice such as saying a generator can power a business in a blackout and it turns out it is not, causing a loss
• nervous shock, such as emotional distress or a recognised psychiatric illnesses
• property damage, such as negligently causing a fire
• consequential loss, which occurs in very rare cases where a negligent act causes a third party business to lose expected revenue.

Management liability

If a manager or director conducts illegal or unethical practices that cause losses to individuals or businesses, management liability covers your assets and the business.

Management liability insurance is fairly complex and most policies have many levels of cover.

Most management liability policies are available as a package and can cover also cover:

• directors’, officers’ and trustees’ liability
• employment practices liability
• government fines or tax audit costs
• cyber and privacy liability
• private capital raisings.

Talk to your insurance broker or authorised insurer about options that are most suitable for your business.

Professional Indemnity

Professional indemnity insurance is a range of insurance products that help cover the cost of legal action. Depending on the product, this may include liability due to:

• Breaches of contract, such as:
  • not achieving the results of a contract (for example, not building a boat on time)
  • providing negligent advice (for example, giving bad financial advice or the wrong dietary advice).

Mistakes providing a service, such as:

•  not auditing a company’s accounts properly
• medical malpractice when performing a surgical procedure
• giving poor legal advice.
• Professional associations may offer industry-specific indemnity insurance at a much lower cost.

Product Liability

If you sell, supply or deliver goods, even in the form of a repair or service, you may be liable if your products cause:

• injury or death
• property damage
• nervous shock, such as emotional distress or a recognised psychiatric illness.

Product liability insurance covers you if any of these events happen to another business or person when your product fails.

Workers Compensation insurance is required for these states where you purchase a policy from a broker. If you employ employees you must have the insurance in place. We would be happy to provide a very competitive quote for your business in these states, and Fully Insured has negotiated competitively  discounted rates with the insurers for your cover.

Other states have a state based scheme in place, we have provided below links to the state based schemes to assist you with your requirements.

Please note: the information given in this topic is general in nature and does not take into account your specific situation.

Assets to Protect - Plant & Equipment and Stock

Stock, products and asset insurance

If you have important business assets, property, stock or products you can’t afford to lose, consider some of the following insurance options:

• Building and contents– covers your building, contents and stock against events such as fire, earthquake, lightning, storms, floods, impact, malicious damage and explosion.
• Burglary – insures your business assets against burglary, and can be important for a retailer or business with property that is not always attended.
• Deterioration of stock– covers your business when chilled, refrigerated or frozen stock rots following the breakdown of the refrigerator or freezer.
• Electronic equipment– covers your electronic items from theft, destruction or damage.
• Farm insurance– this covers things such as crops, livestock, buildings and machinery.
• Goods in transit– covers the goods you buy, sell or use in your business during their transportation.
• Machinery breakdown– protects your business when mechanical and electrical plant and machinery at the worksite break down.
• Tax audit– covers you for the cost of fees in the event of a tax audit or investigation into your business.
• Property in transit– covers theft or damage of items you use for business purposes that travel with you, such as tools and equipment.