As a small business owner, you know your business is you and your family’s livelihood. Protecting it properly essentially helps to protect your financial future and provides you peace of mind so you can focus on growing your business. The risks you face come in a wide variety – some of which you can mitigate, while others are unpredictable and unpreventable.
These events could cause damage to your ability to operate, or your property, or worse, to people. Many small businesses won’t financially survive a significant event with only the resources on hand, and that’s where insurance is designed to function as your safety net.
See below for they key small business insurances for your consideration:
- Property insurance – this is crucial cover to protect your building from damages, theft, fire or vandalism. If you’re leasing your space (i.e. you don’t own your building), property insurance can also cover the valuable assets that you do own, such as the office equipment, computers, inventory or tools that your small business relies on.
- Commercial vehicle insurance – third party insurance is mandatory if you own a motor vehicle. If your company uses a vehicle for work purposes such as transporting your people or your equipment, you should consider insurance to cover things like damage or theft. If your employees drive their personal vehicles for work purposes, non-owned vehicle liability can protect your small business from being held liable to pay should your employee be involved in a collision.
- Business interruption – can your small business sustain an unexpected closure or disruption? For how long? According to a survey of 500 small businesses, CGU found that 1 in 4 would NOT survive if they had to close their doors for three months due to a major disruption such as a fire or storm. Business interruption insurance covers the shortfall in gross profits caused by the interruption to a small business from insured events. It helps pay ongoing costs and protects your profit margins until you’re back on your feet and operating at the profit level you were before the interruption.
- Cyber insurance – if you use a computer or the internet in your small business, you have cyber risk. You are obligated to protect sensitive and private information about your people or your customers if you’re storing it and you could leave yourself exposed if you experienced a breach, hack or even accidental loss of a laptop containing data. Cyber liability insurance covers your small business for the costs associated with data breaches (such as legal costs or forensic investigation).
- Professional liability (also called professional indemnity or errors and omissions insurance) – this type of insurance protects you and your small business against claims for alleged negligence or breach of duty arising from an act, error or omission in providing a professional service that results in a financial loss, injury or property damage. If your small business provides advice or a service, this cover may be relevant to you.
- Public liability – this type of insurance covers your small business in the event that damage to property or injury to a person (a member of the public, not one of your employees) occurs on your premises or is caused by the actions of your business.
- Workers’ compensation – if you employ people, you are required to have workers’ compensation to protect them in the event of a workplace-related sickness or injury. Workers’ compensation provides wage replacement and medical benefits to those who are injured while working and protects your small business from facing legal action following an incident.
We hope the list above has helped you understand some of the typical small business insurances. However, every business is unique, which means you face your own risks, challenges and opportunities, so we would urge you to speak to your insurance broker for advice on the type of insurance solution that’s right for your business.