The Insurance Council of Australia estimated that 70% of businesses which are currently underinsured will never recover from a major legal claim. That means if you don’t have the right cover in place to protect you in the case of a claim, your business has a 70% chance of being wiped out. This means choosing the right insurance is the best way to make sure that one of your biggest assets, your business, is fully protected. Here are 5 questions you need to ask yourself when considering your insurance levels. The first 3 are presented here and the following will be presented in our next blog.
Do you provide any advice to clients?
If you are in a professional industry providing advice for clients such as a lawyer, accountant, mediator, or marketer you are open to liability for any losses incurred as a result of this advice. No matter how careful you are, you could potentially give guidance to your client which can go wrong. Professional Indemnity insurance will make sure that you can protect yourself against any claims of this nature. The advice you provide will determine how much your premium will be and how much you should be insured for. Generally professional services will have higher premiums.
Do you have a set place of business or operate from a vehicle?
Some contractors work out of their vehicles, such as tradespeople or pet groomers. Others work from home, and some of you will have an office. Either way, you will likely have these places filled with the things you need to complete the work.
If you need special equipment to perform your job or service then you will most certainly need Equipment Cover. Try adding up the value of all the things you use every day at work. This might be your computer, your mobile phone, tablets, special tools, machines, files, or even stock. This is the very minimal amount you should be insured for. Most of us won’t have the spare cash lying around to replace all of the equipment we need if it suddenly went missing, was stolen, or damaged. Equipment Cover will step in to help you replace the items as quickly as possible so you can get back to work and continue making a living.
Whilst you are at it, the place of business should also be insured, as well as the work motor vehicle for the replacement value at minimum.
As a contractor you might decide to subcontract out some services, however you might even decide to get help in the form of an employee or apprentice. In this case (and some subbie cases) don’t forget to get yourself Workers Compensation insurance. In Victoria in particular, if you pay your employee more than $7,500/year and even if you only have one employee, you will still need Worksafe Cover.
This will cover your employees in the case they injure themselves or become sick as a result of the job. It will generally pay for the medical expenses, bills, and loss of income as a result of the inability to work.
A dedicated professional such as Contactor Cover can assess your risks and act on your behalf to secure the correct policies in your interest. If you need help and are not sure if you are underinsured, contact Contractor Cover today to make sure you are not one of the 70% that won’t survive after a major claim. All of the information provided above is of a general nature. Tune in next blog to find out the remaining two points of interest for underinsurance and to find out some extra points your may not have thought of as risk areas for underinsurance. See you next time!