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How Much Does Business Insurance Cost?

Adroit Insurance and Risk
- October 2, 2023

Navigating the world of business insurance in Australia can be challenging for small business owners. But we know first-hand that no business is the same. Every small business or enterprise has its own set of risks and needs to consider, so it’s no wonder comprehending insurance costs can be overwhelming for some.

If your business needs insurance, reach out to Adroit Insurance & Risk today and let our professional insurance brokers take care of you to help you find the right insurance for your circumstances.

What Is Business Insurance?

Business insurance is an essential part of any business. It can help protect you from financial losses in the event of an accident, lawsuit, or other unforeseen event.

Without adequate insurance coverage, you could be forced to close your business or pay out of pocket for significant expenses. For example, if a customer or employee is injured on your property, you could be sued and held liable for their medical bills and other damages.

Business insurance can help you cover these costs and protect your business’s financial future. It covers a range of risks from lawsuits, property damage and employee injuries, shielding a range of various industries.

Many different types of business insurance are available, so it’s important to choose the policies that are right for your business.

Types of Business Insurance

There are two main types of business insurance: compulsory and non-compulsory.

Compulsory insurance is required by law for certain businesses. This includes:

Workers’ compensation insurance: This insurance covers the medical expenses and lost wages of employees who are injured on the job.
Product liability insurance: This insurance covers the costs of lawsuits if your products injure or harm someone.
Public liability insurance: This insurance covers the costs of lawsuits if you injure or harm someone on your property.
Third-party personal injury insurance (for vehicles): This insurance covers the costs of lawsuits if you injure or harm someone while driving a vehicle for business purposes.

Non-compulsory insurance is not required by law, but it is often a good idea to consider. This includes:

Professional indemnity insurance: This insurance covers the costs of lawsuits if you make a mistake in your work and someone is harmed as a result.
Property damage insurance: This insurance covers the cost of damage to your business’s property, such as your building, equipment, and inventory.
Burglary and theft insurance: This insurance covers the cost of stolen property, such as cash, inventory, and equipment.
Natural disaster insurance: This insurance covers the cost of damage caused by natural disasters, such as floods, fires, and earthquakes.

The specific types of insurance that can suit your business will depend on your industry, the size of your business, and the risks you face.

Liability Insurance

Liability insurance is a broad term that contains many different insurance policies designed to protect individuals and businesses from financial losses resulting from lawsuits.

These policies typically cover the cost of legal defence, as well as any damages that are awarded to the plaintiff. These policies include:

Public & Products Liability
Professional Indemnity
Management Liability
Statutory Liability
Product Recall

In addition to these common types of liability insurance, there are also specialised liability insurance policies available for businesses in specific industries, such as aviation, marine, healthcare, and finance.

Businesses and individuals who interact with the public, sell or import goods, drive vehicles, or operate boats should have liability insurance.

Liability insurance typically covers two main areas:

Public liability: This covers claims for injuries or property damage caused to third parties by your business or its employees. This could include accidents that happen on your business premises, in your vehicles, or during the course of your work.
Product liability: This covers claims for injuries or property damage caused by your products. This could include defects in your products, even if they are not caused by your negligence.

Liability insurance can help protect you from these financial losses. It is important to speak with an Adroit insurance agent to get the right coverage for your business or situation.

Professional Indemnity Insurance

If you or your business offers professional advice or services, you may need professional indemnity (PI) insurance. PI insurance covers the cost of defending you against a claim made by a client who alleges that they have suffered financial loss as a result of following your advice, even if the claim is unsupported. PI insurance can also cover the cost of any damages that are awarded to the client.

In general, professional indemnity insurance covers negligence, errors, or omissions related to the following aspects:

Advice that is misleading, incorrect or irresponsible; violation of confidentiality or privacy.
Violations of consumer, competitors, and fair trade regulations.
Documents have been lost.
Violation of intellectual property rights.
Negligence, misdiagnosis, inability to obtain necessary testing, and carelessness to treat.
Fees associated with disciplinary proceedings claim investigation expenses, including expert reports and defamation, libel, or slander.
Costs associated with public relations, legal defence, and compensation for damages.

Property Insurance

Property insurance is a type of insurance that protects your physical property from damage or destruction caused by a covered event, such as a fire, flood, or storm. It can also cover the cost of lost income if your property is damaged and you are unable to use it. This can help to minimise the financial impact of these events and protect your home and belongings.

Property insurance is often bundled with other types of insurance, such as Farm Pack, Home Insurance, or Business Pack. This can save you money on your overall insurance premiums.

Workers’ Compensation Insurance

Workers’ Compensation Insurance is a compulsory insurance cover. It is required by Australian law to cover employees for medical expenses, lost wages and rehabilitation in case of workplace injuries or illnesses. Workers’ Compensation Insurance can also help employers meet legal obligations for compensating injured workers.

Worker’s Comp cover is essential for promoting a safe work environment, supporting employee well-being, and minimising legal and financial liabilities for businesses.

Cyber Insurance

Cyber insurance protects against financial loss or damage to data, IT infrastructure, and networks. It can also handle financial damages incurred by a firm as a result of incidents such as malware infestations, extortion, or hacking.

There are two main types of cyber insurance available:

First-party coverage protects your own business from the financial losses caused by a cyber attack. This can include the cost of restoring data, repairing IT systems, and responding to regulatory investigations.
Third-party coverage protects you from being held liable for the financial losses that others suffer as a result of a cyber attack that originates from your business. This can include the cost of paying ransom demands, legal fees, and settlements.

These insurance policies frequently include extensive support and event management, which can prove helpful in cases involving reputational harm or regulatory enforcement measures.

Business Interruption Insurance

Business interruption insurance is also known as Loss of Profits or Consequential Loss insurance. It is a unique type of coverage that can compensate business owners for fixed overhead fees and comparable business expenses in the aftermath of major incidents such as fires, storm damage, or other events that disrupt regular business operations.

When an incident, such as a fire, occurs and the insurance company accepts the claim, the support can continue until the business is completely recovered and able to resume operations at the same standard that existed before the damage occurred.

Business interruption coverage can help alleviate the financial impact of temporary closures by covering ongoing expenses like rent, employee salaries, and lost profits during downtime.

Reach Out To Adroit Today

Our dedicated team of experts is committed to tailoring comprehensive business insurance solutions that precisely match your unique needs. Whether you’re a startup, a growing enterprise, or an established company, trust Adroit Insurance & Risk as your partner. Secure your business insurance today with Adroit by contacting us here. Your protection is our priority.