Starting a Business in Australia Reading Answers

Starting a business can be a risky undertaking. On top of all the usual risks, there are a variety of other things that you may not have thought about, some of which will be outside your control, like vandalism. Usually, the activities in your business area will determine the type of insurance you require - for example, online, home-based etc., whether you sell products or services, and if you employ people. Insurances you MUST have: Australian law requires all businesses who employ people to have employers' liability insurance. This will cover you against any claims made by employees who are injured on your property. If you do not have this insurance, you can face prosecution, even if no accident takes place. If any of your employees use a motor vehicle of any description, you need to insure all of them and the vehicle.

Insurances you SHOULD have: Although it's not a legal obligation, there are some insurances that you should always have. Members of the public will very often be on your premises and if any of them makes a successful claim against you, then this could make you bankrupt! For example, public liability insurance will cover you if any member of the public sues you. Similarly, if you manufacture or supply goods to other companies or to the general public, you should have product liability insurance to cover any damage, injury or illness your products might cause. Insurances you MIGHT have: There are various other insurances you might consider. Business interruption insurance will protect you if a catastrophe takes place to your business and stops you trading. Buildings insurance will cover your premises, which is especially important if you own them. If you have a large stock, make sure you have a business contents insurance. Another important consideration is to insure goods in transit, so that you don't lose out if there's an accident during distribution. Finally, directors and officers liability insurance is not compulsory but may be considered by directors.

Combination Insurance Most good brokers will be able to combine the various insurances that you feel your business needs. These will be tailored to businesses and will include things like monthly premiums. Don't just buy the first one you find. Shop around and don't be afraid to try negotiation with brokers - they want your business and will do you a deal that will save you money.

Personal Insurances If you own your company, especially as a sole trader, you should make sure that you are insured for medical problems. As a sole trader, you can't cover yourself as an 'employee' with workers' compensation insurance. This means you'll need to consider your own personal death, illness and disability insurance. Life insurance is very important if youhave a family who might experience difficulties if you die, and equally important will be critical illness cover, which will insure you if sickness or injury stops you working, but does not kill you.