Running a business is risky, and often involves putting your own finances at risk. Trying to work out what insurance you need when starting out or even later is difficult. However, running a business with basic insurance is a smart way to manage the risks and reduce uncertainty.
If you’re starting out, working out what to insure against before you’ve even made a profit is hard. Will you insure for every possible risk, or just the most likely? Which are more likely in your business? How much cover do you need? If you over-insure you waste money, and if you under-insure and then make a claim, the insurance company can reduce what they will pay you. This information sheet lists the common risks you can insure for and suggests how to get the best deal.
Under insurance is the condition which is raised due to inadequate insurance coverage held by policy holder. In the occurrence of under insurance, it may result in economic losses to the policy holder, since the claim would exceed the maximum amount that can be paid out by the insurance policy.
If you employ staff, by law your business needs WorkSafe Injury Insurance in case they’re injured. If you’re an employee of your own incorporated company, you’ll need WorkSafe Injury Insurance to cover yourself. If you’re a sole trader or in a partnership, you’re not eligible for WorkSafe Injury Insurance, so a wise move is to get sickness and accident insurance. Sole traders and partnerships should also consider income-protection insurance. Even though not legally required, operating without a public liability policy for the business is not recommended.
Policies can be changed to suit your needs. If a policy doesn’t cover a particular risk in your business, you can ask to have a separate clause added to the policy. To save money and avoid buying policies you don’t need, consult with an insurance broker or get quotes from several insurance companies.
Try to buy your insurance from a company normally offering business insurance instead of one selling mainly domestic insurance. Combined types of insurance (small business ‘packs’) are available. Some examples of these are commercial, shop, retail, industrial, office, trades, and business vehicle insurance.
Insurance companies often let you pay premiums in monthly instalments but some will charge for this.
For more information about Personal Insurance, call SELECTINSURE on 1800 883 007
An insurance broker is a person or a firm which works on behalf of the client and offers the best suitable insurance product to the client from the vast range of insurer. And an insurance agent is a person or a firm which works on behalf of the insurance company and offers the only insurance products of an only insurance company, he is an agent of. Every business needs a broker, as they save you time, money and they allow you to sleep easy knowing your business and your personal assets are protected as per your requirements.