10 Types of Business Insurance Plans to Cover Business Risks

Businesses are vulnerable entities that can face damaging consequences because of risks. The negative impact of a wrong business decision or mistake made in a fit of anger can lead to disastrous results. Besides affecting the financial health of the organisation, these problems tarnish the brand’s image and make it difficult to sustain operations. Whether it is a lawsuit filed by a disgruntled client or a natural disaster that destroys the plant and equipment, bringing the business back to its original glory can be challenging.

This is why seasoned entrepreneurs rely on business insurance to protect their assets in testing situations. These plans provide the necessary financial aid to pay for the damage and continue operations with minimal downtime. They offer the support needed to stay afloat in difficult periods. Here is a list of ten types of business insurance plans that are needed to cover business risks. They can help build a secure organisation that is protected from threats and dangers.

1. Product Liability Insurance

The product liability insurance covers the business in case of harm, loss or damage caused by its products. Usually, the problem occurs due to the malfunctioning of the product because it was not manufactured appropriately or was installed incorrectly.

For example, the defective battery of a mobile phone explodes while charging and hurts the user. In this case, product liability insurance can protect the business against claims made by customers for injury or property damage caused due to a faulty product.

2. Public Liability Insurance

Public liability insurance provides cover for third-party injury or death when the business is accused of negligence. It also protects the business from claims of property damage, nervous shock, negligent guidance and significant loss incurred by another business.

Entrepreneurs who purchase a business for sale Gold Coast must get this cover to keep the company safe in case of deceiving and genuine claims. If the company already has the insurance, it can be transferred at the time of sale.

3. Cyber Liability Insurance

Cyber crimes are growing in Queensland at a fast pace, and are putting small businesses at risk. Data breaches can also occur within the organisation by a disgruntled employee or a spy of the competitor. Thus, it is essential to get cyber liability insurance to keep confidential business information safe, along with following cyber security best practices.

The plan helps keep the business up and running in times of distress caused by a cyber attack that can lead to data loss. It can affect production and decrease sales. Thus, the insurance helps to navigate through the problem with ease.

4. Professional Indemnity

Professional indemnity is needed by service-based businesses that offer professional advice, such as accountants, lawyers, business consultants and health professionals. It covers these service providers in case their counselling leads to financial loss or damage.

Entrepreneurs who purchase service-based businesses for sale Gold Coast must have this insurance to pay for the costs related to the compensation claim made by the client. Professional indemnity ensures the business is protected financially and socially in times of crisis.

5. Workers’ Compensation Insurance

Sometimes, an illness or an accident caused at the workplace can put the employee out of work for a long time. The workers’ compensation insurance provides the funds to pay for the medical bills, rehabilitation of the injured or ailing worker, and their salary during the recuperation period.

Workers’ compensation is compulsory for business owners and must cover them and their employees. It also covers contractors and sub-contractors who get injured or fall sick when offering services for the business.

6. Compulsory Third Party Insurance

Entrepreneurs who purchase a Gold Coast Business for sale with vehicles must take out the compulsory third-party insurance for cars and motorbikes. The insurance cover is mandatory even if these vehicles are used for personal use.

It can be taken out at the time of registering the vehicle, and the insurers can be accessed from the Motor Accident Insurance Commission website. Entrepreneurs can use the site to manage CTP insurance claims.

7. Business Interruption Insurance

Business downtime is a reality that cannot be ignored in certain circumstances, such as moving the equipment to another location after the commercial lease ends. The operations can also get disrupted if the property is getting refurbished. The organisation's lack of activity results in time and revenue loss.

However, if the entrepreneur has taken out business interruption insurance, he can get the amount lost due to downtime. It is very beneficial for businesses that face losses due to unforeseen events like property damage due to fire.

8. Natural Disaster Insurance

With climate change becoming a harsh reality, floods and bushfires have become common in Queensland. Thus, entrepreneurs who own a company or are looking for business opportunities in Gold Coast must understand the risk and take out natural disaster insurance.

It protects the business from failing after damages caused by natural disasters like floods, cyclones and bushfires. The insurer provides for the restoration of the commercial property and damaged equipment. They can also help to relocate to safe premises until the property is repaired and restored.

9. Tax Audit Insurance

Businesses can get audited by the Australian Taxation Office to ensure they are complying with their tax obligations and if there are any unpaid taxes. The ATO reviews the financial data provided by the business for this purpose to validate its tax returns.

However, the business must pay the accountant and auditor for completing the audit and submitting a report. The tax audit insurance helps to cover this cost. Since all businesses have to pay taxes and can be audited by the ATO, this insurance is a must.

10. Stock, Products and Asset Insurance

Most businesses have stock and assets that can be stolen, lost or damaged. It can affect the entity financially. Thus, entrepreneurs who purchase a business for sale Gold Coast with equipment and inventory must get insurance plans that can protect them from different types of dangers impacting the supply chain.

The risk factors include malicious damage, burglary, electronic breakdown, insurance, loss during transit, expired perishable stock, equipment breakdown, crashing or computer, etc. They are essential to save the cost of damaged or lost possessions.

Wrapping Up

Businesses face a variety of risks during their lifecycle, ranging from damages caused to clients to the destruction of property. These can be threatening to the survival of the entity. Thus, entrepreneurs must take out the insurance plans that are compulsory and have a higher probability of affecting their venture.