The Price Of Business Insurance
Like it or not, business insurance is a necessary evil for protecting your assets and even your legacy - but how much should you be paying for it?
By definition, the concept of insurance is an arrangement by which a company undertakes to provide a guarantee of compensation for specified loss, damage, illness, or death in return for payment of a specified premium. Sounds serious, right?
Well, insurance is serious business, and can be all that stands between you and potential disaster. Although insurance comes in all shapes and sizes to cover a wide range of life events and major purchases, small business insurance is often overlooked by budding entrepreneurs as an unnecessary expense. In reality, that couldn’t be further from the truth.
How Much Should You Pay For Business Insurance
Like it or not, business insurance is an essential tool to protect your assets, your revenue, and your liabilities. Any business faces a broad range of risks every time it opens its doors or even sells a product - think from fire, theft, damage and loss to being sued for injuries by a member of the public.
Although the type of small business insurance you need will usually vary depending on your industry or sector, there are usually four common types that almost every enterprise should consider for the right coverage.
Public Liability Insurance - Public liability is really the core of any small business insurance policy, especially if the nature of a business involves any form of direct contact with the general public. If a business causes property damage or personal injury to another person via negligence, that person has every right to take action against the business via the court system in Australia. Public liability insurance protects brands in these types of incidents, and costs roughly between $800 to $1000 per annum on average in Queensland.
Product Liability Insurance - Although similar in nature to public liability insurance, product liability insurance is designed for businesses who are involved in the production, or supply and sale of products to members of the public. It helps to protect against claims of personal injury or property damage that a third party suffers - or claims to have suffered - as a direct result of your business's product. For product liability insurance, businesses can expect to pay anywhere between $500 and $850 per annum for this type of cover.
Business Car Insurance - For sole traders, business car insurance is an extension of your personal vehicle's policy that also covers you when using the car for business purposes. Much like standard vehicle insurance, there are usually four types that consumers get to choose from: Comprehensive, Third Party Fire and Theft, Third Party Property Damage and Compulsory Third Party Insurance (CTP). While the average business car insurance policy is around $1200 per annum, this can vary wildly depending on your level of cover.
Small Business Insurance Packages - To make life slightly easier for business owners, many insurance providers offer packages for small business insurance. Often designed for trades, professional services, food and beverage, and retail, they usually cover common policies like public and product liability, business buildings and contents, business interruption, theft, commercial vehicles and more. Often cheaper when compared to individual policies, it’s worth enlisting the services of an insurance broker to track down the best deal.
In addition, other common forms of small business insurance cover things like workers compensation, professional indemnity, and other industry specific products. Determining which policies you need and those you don’t will usually boil down to your profession, so enlisting the right advice is always a good idea before you start shopping - but where do you find it?
Take Control Of Your Financial Future With Muro
Whether you’re starting a business, purchasing an existing one, or even reevaluating your current financial position - all require some form of industry know-how if you hope to successfully navigate your legal tax requirements, as well as hitting your financial and business goals.
However, if understanding the legalities that surround these isn’t your strong point, then it may be reassuring to know that you’re not alone. In fact, many businesses (big and small) enlist the services of an accountant in order to free up their time while knowing that their financial obligations are already taken care of by the professionals.
Ultimately, the team at Muro believe that every business owner is an entrepreneur. However, accounting does not discriminate - finances break down barriers and are not territorial. If you would like to take a deeper look into your finances, please get in touch with us at Muro today to ensure that you’re on the right path for success.