Business Insurance
Business insurance policies provide businesses with protection and peace of mind against a range of risks. Insured events can include:
- Business interruption (consequential loss)
- Public and products (broadform) liability
- Theft/burglary
- Money coverage
- Glass breakage
- Employee dishonesty
- Machinery breakdown
- Electronic equipment breakdown
- Goods in transit
- General property
- Tax audit
How do I select the right policy?
It is important that you understand the extent of your policy coverage and your insurance requirements. Policy coverage is always subject to the terms, conditions and exclusions of the insurance contract and policy wording provided by the insurer.
Each insurance company has its own policy wording. This means that coverage can vary considerably from one insurer to another. It is vital that you compare each policy based on the appropriateness of cover for your individual or business needs.
An Overview of Common Policy Coverage
Fire and Perils
Covers your business for damage to insured property, which includes building, contents and stock, caused by certain defined events:
- Storm
- Malicious damage
- Explosion
- Earthquake
- Wind
- Leakage of liquid
Additional extensions of cover are also included:
- Removal of debris
- Accidental damage
- Claim preparation costs
Business Interruption
Provides cover for consequential loss of profits or revenue resulting from the interruption or interference with your business caused by damage covered under the Fire and Perils Sections. There are several different options of cover available, these include:
Business Income Protection:
- Weekly income
- Additional expenses (eg - relocation costs, expediting expenses)
Consequential Loss of Profits:
- Gross profit
- Loss of rent receivable
- Payroll
Claims preparation expenses
Reasonable professional fees and other expenses necessarily incurred as a result of the property claim (as agreed by the insurer and subject to policy limit).
Additional increased costs of working
This option, if selected provides cover for additional expenditure not otherwise covered under any other section following a loss. It provides cover for reasonable costs incurred to minimise the loss or damage caused to the business. An example of such – cover for additional payroll and advertising expenses required to maintain the business’s customer base. (as agreed by the insurer and subject to policy limit).
Outstanding Accounts receivable
Cover for the amount owed to the business that it is unable to collect due to damage to records.
Public & Products (Broadform) Liability Insurance
Provides insurance cover in respect of insured’s liability for loss or damage caused negligently to third parties, who are not the insured, as a result of an occurrence in connection with the insured business.
It indemnifies the insured business against legal liability to pay compensation in respect of personal injury or property damage claims arising in respect of the product and/or service sold or supplied by the insured; however it does not cover product warranty and is always subject to terms, conditions and exclusions. In addition, these policies also provide cover for defence costs even if the action against you is false or fraudulent, provided that an excluded circumstance does not apply.
Personal Injury cover includes:
- Death, bodily injury, sickness, disease, disability, shock, fright, mental anguish and mental injury
- False arrest, wrongful detention or imprisonment, and malicious prosecution
- Wrongful eviction
- Assault or battery
- Libel, slander, defamation of character or invasion of the right of privacy
Property damage includes:
- Physical damage to tangible property
- The loss of use of tangible property which has not been damaged but cannot be used due to damage to other tangible property editing expenses)
Theft / Burglary
Covers insured property (business contents, stock and customers’ goods as declared) contained on your business premises following forced and violent entry. Additional cover includes damage to buildings and fixtures, replacement of locks, protection of premises, and temporary removal of your property insured to another location subject to the policy limitation.
Money Coverage
Covers Loss of, or damage to, money contained in the building during or outside business hours, while in a locked safe or strongroom, in transit, or in your personal custody while contained in your private residence.
Cover Options Available:
- Transit to or from your business premises
- Money while contained in the night safe of any bank
- Money contained in the building: During business hours; outside business hours; and/or only while contained in a securely locked safe or securely locked strong room.
- Money in your personal custody covers
Glass
Cover provides protection against accidental breakage of fixed glass located at the business premises. Property covered includes items such as Glass / Perspex windows, doors, mirrors and skylights for:
- Fixed external glass; and/or
- Fixed internal glass
In most cases the policies also provide cover for wash basins, lavatory pans and cisterns.
Employee Dishonesty
Covers the loss of money or goods (i.e stock) due to the fraudulent or dishonest conduct of an employee, for their own gain or the financial benefit of any other person or business. A few examples of events which are covered include:
- An employee stealing money to fund gambling activities
- An employee organising with another person to over-pay invoices or pay false invoices
Machinery Breakdown
Covers for damage to electrical, electronic and mechanical machinery insured due to breakdown located at the business premises.
Cover provides compensation to your business for:
- The costs of restoring or replacing machinery after breakdown; and/or
- The cost of hiring temporary machinery
Additional Features and Benefits
- Cover is available under this section for deterioration/loss of stock (up to the nominated sum insured) following a breakdown
Computer / Electronic Equipment
Covers damage to insured computers and/or electronic equipment located at the business premises. Cover options available under this section include:
- Accidental damage covers any accidental loss or damage to the property insured including Breakdown
- Breakdown only covers sudden and unforeseen failure of computer or electronic equipment
Additional Features and Benefits
- Restoration of data covers costs for the purpose of restoring data lost as a result of damage (incurred up to nominated sum insured)Increased cost of working cover is for over and above normal operating expenses (up to nominated sum insured) as a result of a loss. This includes external accountants and other professional fees.
General Property
Covers items such as laptop computers, tools of trade whether at, or away from the premises.
There are principally two covers available under this section:
- Accidental damage covers any sudden, unexpected or occurrence not otherwise excluded
- A restricted cover to collision, overturning of the conveying vehicle and flood. Fire, cover is available as an optional cover
Goods in Transit
Covers your business for damage to property insured whilst in transit within Australia caused by certain defined events. It provides cover for Loss of, or damage to goods insured.
There are several cover options available:
- Fire, collision and overturning covers overturning of the conveying vehicle, resulting in your insured item(s) being destroyed
- Fire, collision, overturning and theft covers the conveying vehicle being broken into and your insured item(s) being stolen
All risks not excluded covers the insured item(s) being dropped by the carrier resulting in your item(s) being destroyed (covers all risks of loss or damage not otherwise excluded)
Tax Audit
Provides cover for professional fees in connection with an audit by a government body. Cover can be extended to include audit cover of directors of the insured business.