Small Business Insurance for small, SME, medium, large business…whatever your business type, the common components of Small Business Insurance generally remain the same. Lets run a quick guide on the basics of small business insurance.
The Big 3
- Property Insurance
- Public Liability
- Workers Compensation
- Business Interruption
- Electronic Equipment
- General Property
- Fidelity / Employee Fraud
- Tax Audit
The Separate Policies
- Professional Indemnity
- Management Liability/Financial Lines
- Motor Vehicles
- Corporate Travel
The Big 3
Any Insurance policy starts with the Property Section, sometimes referred to as the Fire Section.
This covers damage to Business Property at the Situation – caused by defined events – and provides a number of automatic additional benefits.
Covered Property includes:
- Plant & Machinery
Buildings means Buildings and structures at the premises. If you are renting/leasing, it is most common that the building owner should cover the building.
- verandahs, carports, car parks, sealed driveways and paths, shelters, awnings, gangways, staircases and all outbuildings
- fixtures and fittings owned by the owner of the building
- underground and above ground services including aprons, supply mains and meters
- walls, gates, fences, flagpoles, floodlights and signs
- permanently fixed water and fuel tanks.
Contents means all property at the Business Premises, belonging to You or for which You are responsible for.
It is generally reflected on our schedules to mean a combination of any of the below, and is less common to split each item, although this can be done if desired. Eg An amount for contents, an amount for stock etc.
Contents also includes:
- paintings, works of art and curios
- computer systems records, manuscripts, other documents, deeds, specifications, plans, drawings, designs, business books and other records of every description
- documents of title and any other documents of historic value
- plant permanently fixed to Your Buildings
- machinery and/or equipment
- fixtures, fittings and glass owned by Your landlord which You are legally responsible for and leasehold improvements
- goods sold but not delivered and goods held by You on consignment or commission
- property not owned by You but on Your Business Premises for service, repair, alteration or safe keeping
- property of Your welfare, sports and social clubs.
The Fire or Property section is not just Fire, it includes many other ‘peril’s or events that give rise to damage.
- Lightning, Thunderbolt
- Storm, Wind, Rain, Hail
- Earthquake, Volcano, Tsunami
- Riots, Commotions, Disturbances
- Escape of Liquids
- Malicious Damage
- and can include Accidental Damage (to a set amount)
This section is subject to underinsurance, meaning that any claim can be reduced by the amount it is under-insured. In short, you must insure for full replacement value of building, contents, stock, plant and equipment and machinery.
With any wording, and particularly at Steadfast Broker wording, there are numerous automatic additions and extra covers available.
“Named Insured” means:
(a) the person(s), corporations and/or other organisations specified in the Policy Schedule,
(b) all existing subsidiary and/or controlled corporations (including subsidiaries thereof) of the Named Insured incorporated in the Commonwealth
of Australia and/or any other organisations under the control of the Named Insured;
(c) all subsidiary and/or controlled corporations (including subsidiaries thereof) of the Named Insured and/or any other organisations under the
control of the Named Insured incorporated in the Commonwealth of Australia and which are constituted or acquired by the Insured after the commencement of the Period of Cover.
(d) every subsidiary and/or controlled corporation and/or other organisation of the Named Insured which is divested during the Period of Cover,
but only in respect of claims made against such divested subsidiary, related or controlled corporation or organisation caused by or arising out
of Occurrences insured against by this Policy, which occurred prior to the divestment.
“Personal Injury” means :
(a) bodily injury, death, sickness, disease, illness, disability, shock, fright, mental anguish and mentalinjury, including loss of consortium or services
(b) false arrest, false imprisonment, wrongful detention, malicious prosecution or humiliation;
(c) wrongful entry or wrongful eviction or other invasion of privacy;
(d) libel, slander or defamation of character, unless arising out of Advertising Injury;
(e) assault and battery not committed by You or at Your direction, unless committed for the purpose of preventing or eliminating danger to persons or property.
“Property Damage” means:
(a) physical loss, destruction of or damage to tangible property, including the loss of use thereof at any time resulting therefrom; and/or
(b) loss of use of tangible property which has not been physically lost, destroyed or damaged; provided that such loss of use is caused by or arises out of an Occurrence.
What You are covered for
We agree (subject to the terms, Claims conditions, General Policy conditions, Exclusions, definitions and Limits of liability incorporated herein) to pay to You or on Your behalf all amounts which You shall become legally liable to pay as Compensation in respect of:
- Personal Injury, and/or
- Property Damage; and/or
- Advertising Injury;
happening during the Period of Cover – within the Geographical Limits – and caused by or arising out of an Occurrence in connection with Your Business or Products.
“You, Your, Insured (where used in this section)” means the person(s), companies or firms named on the current Policy Schedule as the ‘Insured’. Each of the following is an Insured to the extent specified below:
(a) the Named Insured,
(b) every past, present or future director, stockholder or shareholder, partner, proprietor, officer, executive or Employee of the Named Insured (including the
spouse of any such person while accompanying such person on any commercial trip or function in connection with Your Business) or volunteers while
such persons are acting for or on behalf of the Named Insured and/or within the scope of their duties in such capacities.
(c) any Employee superannuation fund or pension scheme managed by or on behalf of the Named Insured, and the trustees and the directors of the trustee of any such Employee superannuation fund or pension scheme which is not administered by corporate fund managers.
(d) every principal in respect of the principal’s liability
If during the Policy Period a Worker suffers an Injury in the Business and you are liable under the Act to make any payment in respect of the Injury, we will :
indemnify you against that payment and in addition, will pay all reasonable costs and expenses you incur with our written consent.
(a) a person who is defi ned as a worker by the Act and who is employed or engaged by you;
(b) a person in respect of whom you are deemed to be an employer pursuant to Section 175 of the Act; and
(c) a person deemed to be your Worker pursuant to Section 175AA of the Act.
Policy Limit of the Common Law Insurance
We will not pay more than $50,000,000 for Common Law Liability and costs in respect of any one event, regardless of how many Employees are injured by that event.
The first premium and every renewal premium payable to us will be calculated on the amount of the Wages (as defined above) you estimate you will pay during the year following the inception or renewal of the Policy. Your estimate must include all amounts you estimate you will pay Contractors.
You must provide to us within one month after the expiry of each year of the Policy Period, the correct amount of all Wages paid by you in that year, and when required, the number of Workers and Contractors you employed or engaged in that year. The Wages you declare must include all payments you made to Contractors.
Other Articles of Interest