What Business Insurance Does a Small Business Need in Australia?
Small business insurance should reflect the assets, activities and liabilities of each Australian business. A consultant, retailer, manufacturer, café, transport operator and building contractor have different assets, liabilities, contracts and interruption risks.
The right starting point is to identify what the business owns, what it does, who could make a claim against it and what would stop it trading.
Discuss your current cover and business activities through ABS’s business insurance service.
Speak with a business insurance broker
Discuss your operations, assets, people, contracts and current insurance program with ABS.
Request a business insurance review
Ask ABS to compare your existing cover with the risks your business faces today.
Small business insurance: start with your obligations and risks
Depending on the business, an insurance program may include workers compensation where required, commercial motor or compulsory third-party cover, property and contents, business interruption, public or product liability, professional indemnity, management liability, cyber insurance, machinery breakdown and portable equipment.
The Australian Government’s business-insurance guidance explains common policy types and emphasises that needs depend on the business’s activities.
1. Identify Compulsory and Contractual Requirements
Employers generally need workers compensation insurance under the applicable state or territory scheme. Safe Work Australia explains that employers must have insurance to cover workers who become sick or injured because of work, while scheme details differ by jurisdiction.
Registered vehicles require compulsory third-party arrangements, and some regulated professions or licences require specified professional cover. Leases, finance agreements and customer contracts can also set property, liability or professional-indemnity requirements.
List each legal and contractual obligation separately. A certificate of currency confirms a policy exists but does not prove every contract clause is insured.
2. Protect the Property and Revenue the Business Depends On
Consider buildings, fit-out, stock, machinery, computers, tools, portable equipment and vehicles. Values should reflect realistic replacement costs, debris removal, professional fees and other insured expenses where applicable.
Then ask what happens to revenue if a covered event stops trading. Business interruption insurance may address insured loss of gross profit or revenue and additional operating costs during an applicable interruption, subject to the selected period and wording.
Property protection should reflect catastrophe exposure, security, fire controls, maintenance and dependence on particular premises, machinery or suppliers.
3. Review Liability, Advice, People and Technology
Public and product liability address covered injury or property-damage claims involving other people. Professional indemnity concerns claims arising from professional advice or services. Management liability can address specified exposures faced by companies, directors and managers.
Cyber insurance may provide incident-response and financial protection for insured cyber events, but it does not replace security controls. The Australian Cyber Security Centre provides practical resources through its small-business cyber-security hub.
The final program should match actual activities, turnover, payroll, locations, contracts, staff, systems and claims history.
Frequently Asked Questions About Small Business Insurance
Is business insurance compulsory in Australia?
Some insurance is compulsory depending on employees, vehicles, profession, licence and jurisdiction. Other cover may be contractually required or commercially prudent.
Does a home policy cover a home-based business?
Do not assume it does. Home policies may restrict business activities, stock, equipment and customer visits. Tell the insurer about the business.
What is a business insurance pack?
It is a package that can combine selected sections such as property, interruption, theft and liability. Included sections and limits vary.
How often should a small business review insurance?
At least annually and whenever locations, turnover, staff, contracts, services, assets, vehicles or technology materially change.
Is public liability enough for a consultant?
Not necessarily. Public liability and professional indemnity address different risks. Consultants providing advice or services should review both.
Can ABS review an existing program?
Yes. ABS can compare current policies with the business’s operations, assets, contracts and risk priorities.
Build the Insurance Around the Business You Actually Operate
Provide ABS with your current schedules, turnover, payroll, assets, activities, contracts and recent changes. We can help identify gaps, duplication and limits requiring review.
Important information: This article provides general information only and does not consider your objectives, financial situation or needs. Insurance is subject to policy terms, conditions, limits and exclusions. Legal, contractual and compulsory insurance requirements vary by business and jurisdiction. Obtain advice appropriate to your circumstances.
