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What do I need covered by insurance?

Small businesses’ only insurance obligation is to provide work cover for their employees, to guard against injury or death claims.

This insurance is compulsory for all firms unless their annual payroll is less than $7,500. However, if you use apprentices or trainees, this cover isn’t optional, no matter what your payroll amount is.

You will have to certify your remuneration level each year and inform authorities within 28 days if this remuneration is set to rise by 20% of more. Workplace safety boards are in place in each state to enforce this and other safety legislation.

Although workplace cover is the only essential insurance in the eyes of the law, it would be rather foolish to not take out any other kind of protection.

A fire, flood, personal injury or theft could severely impact upon your business, even threatening its future. Intangible considerations such as future turnover will also be hit, so it’s advisable to search for a good insurance deal to cover you, your staff and your business.

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A correction to the above article, Workers Compensation is compulsory in QLD even if your payroll is $1.00. Each state is very different on how it approaches Workers Comp (also called Employers Indemnity in WA).

There are other covers required by law depending on your business activities, particularly in the Health Sector.

So it is important to seek advice from a trained and qualified advisor such as an insurance broker.

For a 'non compulsory' but highly recommended for any Pty Ltd company in Australia with employees; it is wise to ask for a Management Liability policy with cover for Employment Practices Liability. This type of cover helps protect the company and it's directors against allegations of unfair dissmissal, harrassment, discrimination and the like. This is not normally found in a Business Pack but is easily obtainable.

Pious , September 06, 2010