Home Businesses face unique challenges and an often complex web of insurance needs. Sorting it out can be daunting, and the consequences of getting it wrong can be dire. Here, we’ll attempt to break down the major insurance types and weigh up their relevance to your business.
Public Liability… The ‘Must Have’ Insurance
This protects your business against the financial risk of being liable for causing injury, damage, loss or death to a third party.
You have a ‘duty of care’ to keep any visitors, such as clients or suppliers, free from harm on your premises. Any breach of this responsibility could result in a claim, and whilst you may see your home office or garage as a safe place, any seemingly innocuous slip, bump or fall could cripple your business financially. Essential.
Professional Indemnity… If You Sell Professional Services
This protects professionals against legal costs and claims for damages arising from any act, omission, or breach of duty in the delivery of a service.
This is a critical consideration for those providing a professional service from home. Accountants, massage therapists and beauticians are among the professionals that need to allow for the chance of a client lodging a claim. Whether the case is valid or not, Professional Indemnity insurance will protect against court costs and any compensation claims.
Personal Accident… Look After Your Most Important Asset
If you’re temporarily unable to work due to an accident, this cover provides up to 85% of your income (up to $3,000 per week) until you’re back on your feet.
Accidents do happen, and a simple injury could put you out of action and unable to earn an income for a considerable amount of time. For a more comprehensive income protection plan you also have the option of including Illness insurance, which would pay you the same benefit if you fell ill and were unable to work. Premiums for both are generally tax deductible.
Business Insurance… Protect Your Stuff!
Business Insurance provides financial cover for the premises and contents against loss, damage or theft, as well as financial loss arising from business interruption.
The type of cover you choose here will depend on the nature of your business and the equipment you wish to insure. Protect your workplace premises, furniture, tools, machinery and stock with a policy that includes a fair valuation of all your essential business assets.
Cyber Liability Insurance… Especially If You Operate Online
Cyber Liability Insurance covers you against the expense and legal costs of data breaches or hacking, including the theft or loss of client information.
As online activity and operations become increasingly prevalent in business, hacking and data breaches become more numerous and progressively more sophisticated. Small businesses, especially, face a unique set of risks due to the absence of robust security systems that larger firms can afford, and are highly targeted by cyber criminals. Expenses could include the cost of business interruption, forensic investigation and data recovery, extortion and crisis management, as well as mandatory notifications and other legal costs.
The insurance types highlighted above could be extended to include ‘Management Liability’ to protect against legal costs of mismanagement or misconduct breaches, as well as ‘Tax Audit’ to cover accountant’s fees in the event of an audit. Of course, business owners should also consider their statutory workers compensation requirements, and appropriate personal insurances such as Life, Disability, Trauma, and Income Protection.
Operating your business from home can be incredibly rewarding, but ignoring your insurance needs could endanger everything you’ve worked for. Protect yourself, your assets and your income with a balanced, comprehensive set of insurance policies so that your business can cope with whatever the future may hold.
BizCover™ Pty Ltd (ABN 68 127 707 975; AR 338440) is a corporate authorised representative of Mega Capital Pty Ltd (ABN 37 098 080 418; AFSL 238549). This is general advice only.