Small business insurance is usually defined as businesses that operate with a turnover less than $2 million per year that require insurance to cover the multiple aspects of their business. The term small business doesn’t really have any bearing on your actual insurance policies at all as each policy is treated in its own rights and quoted exclusively to that this business.
Small business owners are usually searching online for an insurance policy that fits their business needs and can be packaged all up into one small business insurance policy. Although your business may be considered as small, there are still a number of risks that you need to consider even more so when a small business usually doesn’t have the cash flow and large balance sheet that could handle a significant loss should it occur.
The most common insurance policy for small businesses would be a business package insurance policy. This will usually provide the coverage and flexibility that a small business owner needs that provides optimal convenience of everything being under the policy with the flexibility to be able to add and remove off what cover is and isn’t required. Although the process of taking out an insurance policy is the same as a larger business because regardless of the size of your business most business owners and managers have the same goal; the best cover that they can get for the most affordable premium.
This depends on a number of factors such as your risk appetite, your budget and the potential cost of a claim that could arise should something occur. For example, some business owners want to cover their goods while being shipped because the product value is $500 and their profit margin is only fairly small. However, some business owners have a large quantity of orders that go out that are a low value and high profit margin that they would just re-send another product if the shipment was lost or damaged. Your risk exposures come down to your individual circumstances. The most frequent types of policies that we put in place for small business owners are:
The best advice that I can give clients and future clients is to stop reading articles online and actually speak with someone that can give you tailored advice. Not only is it tailored advice but it usually doesn’t cost anything. Our business offers free risk reports for business owners that are unsure what business insurance that they may need. This gives you a list of insurances you should consider and places them in order of priority for you to review as well. We also don’t just provide you with the document and tell you to go and read it yourself, whether your prefer to call or email we will go through all of the information with you, multiple times if it’s required.
Your business insurance is completely flexible and tailored to your business and also your budget. Business owners also need to consider that their insurance policies aren’t just another expense that they need to pay. Your business insurance protects you, as a business owner. For example, if you’re a sole trader would you be prepared to sell your family home if you caused a loss that you didn’t have the money to cover yourself?
We work with business owners of all sizes and we present you with an overall cost however, we understand that working within a budget is also a big consideration that shouldn’t be dismissed.
Yes, absolutely. I would argue that they need it more than larger businesses. Your first few years of trading usually either make or break your business. I’m sure that you are aware that most businesses will usually fail within their first 2 years of operating. This can be due to a number of different things however, more often than it money usually plays a large part of it.
Your balance sheet as a business owner will usually determine a suitable risk tolerance that your business can operate under. For example, if your business turns over $100,000 per year then as a business you should be prioritising insurance policies that could cause (for example) $25,000 worth of a loss or even lower. Take that $100,000 and tell me exactly how much you can go without, $10k, $20k, $5k? Whatever the number is, this is how you should be assessing your insurances. Taking out an insurance policy is a form of ‘risk transfer’ which means you are paying a portion of money to transfer your risk of something happening to someone else (the insurer).
We have worked with business owners that haven’t even started trading yet and they are just in the initial idea phase of starting their business. We understand that people are looking to move their lives forward for a number of different reasons whether that be starting a side hustle or looking to build on a hobby or passion where you no longer have to work your 9-5 day job. So whether you are thinking of starting a business, run a small market stall or operate a larger business feel free to contact us for any of your business insurance needs. We would be more than willing to assist you, all it starts with is a conversation that will then progress from there. We work for you and not the insurers so your priority and needs as a business will always remain at the forefront of everything that we do. We look forward to serving you.
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