Insurance


Insurance for your business is important to cover you for unexpected events.
Without the appropriate insurance you may be unable to trade or have large out of pocket expenses,
which could result in you having to close your business.

Compulsory insurance (WA)

  Workers’ compensation insurance if you employ people
  Motor vehicle third party personal insurance, which is included in the cost of your motor vehicle licence

Where to arrange insurance

  Insurance company
  Agent acting on behalf of an insurance company
  Insurance broker


Assets and revenue insurance

  Building and contents
  Glass breakage
  Motor vehicle
  Fire and other damage
  Equipment breakdown
  Goods in transit
  Fraud and dishonesty
  Money
  Theft
  Business interuption

Liability insurance

  Public liability
  Professional indemnity
  Product liability

Working from home

If you operate a home-based business your house and contents insurance may not cover your business activities, and in some cases your policy may be void. Check your existing policy with your insurer and update your cover if required.

Personal and workers insurance

  workers’ compensation (compulsory)
  Personal accident, illness and life
  Income protection

Tip

If you are a sole trader or partner you are not covered by workers’ compensation insurance.
In the event of an illness or accident you may not be able to work and earn an income.
Insurance is strongly recommended to cover you in this circumstance.



Risk management


What are risks?

A risk can be defined as an event or circumstance that has a negative effect on your business, for example, the risk of having equipment or money stolen as a result of poor security procedures.
Types of risk vary from business to business. You must decide on how much risk you are prepared to take in your business.
Some risks may be critical to your success; however, exposing your business to the wrong types of risk may be harmful.

Common risks

  Strategic – decisions concerning your business’ objectives
  Compliance – the need to comply with laws and regulations
  Financial – financial transactions, systems and structure
  Operational – your operational and administrative procedures
  Environmental – external events (weather or economic conditions)
  Reputational – the character or goodwill of the business



Identify the risks

  Evaluate your business and identify any risks
  Consider any external risks that could impact on your business

  Evaluate if:
  Your premises were damaged or not accessible
  Your suppliers went out of business
  You lost key staff members
  Your health affected your work

Assess the risks

   You can assess each identified risk by establishing:
  The likelihood (frequency) of it occurring
  The consequence (impact) if it occurred

  Consider controls that may assist:
  Elimination
  Substitution
  Engineering controls



Manage the risks

  Developing cost effective options to cope with risk
  Avoid - change your business model
  Reduce - modify current practices
  Transfer - insurance, contracting
  Accept - sometimes a valid option


Information source, Small Business Development Corporation, Western Australian Government.


Drago Graovac
Ph: 0403 293 461
Email Drago

Rodney J Warner
Ph: 0417 910 328
Email Rodney

Sky Public Accountants

15 Park Lane
Bassendean, WA, 6054

Members of the:

Institute Public Accountants

Liability limited by a scheme approved under Professional Standards Legislation.