Compulsory business insurance types in Australia

Some forms of insurance are mandatory for Australian businesses, including workers’ compensation, public liability and third-party personal injury insurance. However, beyond that, choosing insurance can feel like a bit of a minefield. That’s why it’s wise to get advice before you make a selection or renewal.

 

The benefits of consulting an insurance broker

Buying insurance directly from a provider may be more cost-effective, but consulting a broker may help you better understand your options and potentially avoid the risk of being underinsured or not covered for the right things. A broker may help find the best insurance for you, so taking advantage of their expertise could spare you a sizeable headache. And remember: you’re not obligated to take their advice. Once you’ve chosen to get advice from one, or many, insurance brokers it’s wise to ask as many questions as possible. It can also be smart to compare different brokers’ opinions on the same issues. For example:

  • What insurance do you think I need for my business?

  • Can I customise my insurance so that I’m only paying for the things I want? If so, how?

  • Should I combine all my insurance needs under one policy?

  • How much cover should I buy?

  • What am I not covered for?

  • What insurance must I have (on top of what I think I need)?

You might find that most brokers answer your questions in a similar way. That’s because the General Insurance Code of Practice and other regulations and legislations make it clear, by law, how information must be communicated (e.g. information regarding excess costs, major exclusions and commissions). 

 

Getting true peace of mind

Once you are confident that your insurance broker knows their stuff and is familiar with your business’s details, needs and risk profile, make sure you’re comfortable with their policy recommendations. This includes informing yourself about what happens if things go wrong. 

After all, that’s why you’re insured in the first place. So remember to ask:

  • Are there codes of practice or regulations that protect me?

  • How do I know you’ll pay a claim if I have one?

  • What if I’m not satisfied with my policy?

It is best practice for insurers to follow the General Insurance Code of Practice which promotes providing services in an open, fair and honest way and helping people in financial hardship, but not everyone subscribes to this code.

 

Staying on top of your premiums

Buying insurance isn’t just about paying the lowest premium. Here the devil really is in the details. 

Ask how costs are likely to change in the future. In addition, while loyalty is often rewarded, you may want to shop around to get the best deal every year. For example, you may want to ask:

  • How much does each type of insurance cost?

  • Is it cheaper if I bundle some types of insurance together?

  • Will you give me a discount for loyalty if I renew with you?

  • What can I do to prevent my premiums going up year after year?

  • What commission are you earning on my policy?

Business insurance is too important to leave to last. Getting expert advice may spare you a lot of time and confusion, and help ensure you get the best cover to shield your venture from the unexpected.

Disclaimer: The guidance provided is general in nature. The guidance is factual information only and is not intended to be financial product advice, legal advice or tax advice and should not be relied upon as such. The guidance has been prepared without taking into account your personal objectives, financial situation or specific needs. Before acting on any guidance you should consider the appropriateness of the guidance having regard to your objectives, financial situation and needs. Before making any decisions, it is important for you to consider these matters and to seek appropriate financial, legal, tax, accounting and other professional advice.