For most business owners, insuring their business premises, stock, and equipment is an obvious decision. However, many don’t realise that injury or accident to themselves or their staff can pose just as big a financial risk to their business as damage to its assets. Covering yourself and those who work for you can not only protect your business against substantial loss, but may even be required by law. In this article, we discuss the three main ways you can protect your business: worker’s compensation insurance, Public Liability insurance, and Accident and Sickness insurance.
Worker’s compensation insurance
Worker’s compensation insurance covers your employees if they are injured at work, or become sick due to workplace conditions. As an employer, you have a responsibility to maintain current and adequate worker’s compensation insurance.i While worker’s compensation insurance is compulsory, the regulations differ from state to state – so it’s best to talk to your insurer about the requirements in your area of operation.
Employees vs Contractors
In general, all employees must be covered by worker’s compensation insurance, while contractors will usually need their own insurance. However, a person who you consider to be a contractor, may actually be an employee in the eyes of the law.ii There are a number of factors that distinguish a contractor from an employee, such as whether they are paid on a quotation basis, supply their own equipment, and whether or not they work exclusively for you, amongst other things.
Public Liability insurance
If you work from your premises, even on a casual basis, you may need Public Liability insurance. This kind of insurance can help protect your business in the event that your business is legally liable for property damage or personal injury. So, if a customer is injured by a collapsing shelf and you are held Liable for the incident, Public Liability cover can help provide protection in case they bring a legal claim against you.
Accident and Sickness insurance
We’ve discussed how to protect your employees and your business, now on to protecting your most important asset – yourself! You can insure yourself against injury and illness with personal accident and sickness cover. This cover provides an agreed payout in case of injury, but it also protects your income in case you cannot work due to injury or sickness (Insurers may apply waiting periods). This kind of insurance may be suitable for sole traders, who may not be able to cover themselves or obtain the required cover through worker’s compensation insurance.i More than 12% of business owners are not properly covered by Accident and Sickness insurance, leaving themselves vulnerable in case something happens.iii For many, this is because they may not realise the importance of this kind of insurance to protect their everyday income, and reduce the impact an accident may have on their future.
In this article, we’ve discussed the three main types of insurance you will need to protect yourself, and those who work for you. Your exact insurance needs will be specific to your business, so talk to a small business insurance expert such as Allianz or contact your local insurance broker about your requirements.
Allianz Small Business Insurance is issued by Allianz Australia Insurance Limited ABN 15 000 122 850 AFSL 234708. We do not provide advice on this insurance based on any consideration of your objectives, financial situation or needs. Policy terms, conditions, limits and exclusions apply. Before making a decision please consider our product disclosure statement. Also view the PDS update (privacy notice).
i Business.gov.au, Worker’s Compensation Insurance, accessed June 2018, , https://www.business.gov.au/info/run/insurance-and-workers-compensation/workers-compensation-insurance
ii Icare NSW, Classifying workers or contractors for workers insurance purposes, accessed June 2018, https://www.icare.nsw.gov.au/employers/your-insurance-obligations/classifying-your-workers
iii Insurance Council of Australia, Non-insurance in the Small to Medium Sized Enterprise Sector, July 2015 http://www.insurancecouncil.com.au/assets/report/2015%20-%20non-insurance%20in%20the%20small%20to%20medium%20sized%20enterprise%20sector.pdf
iv WorkSafe Victoria https://www.worksafe.vic.gov.au/who-needs-workcover-insurance