A business insurance package is a combination of various types of cover that can be tailored to each individual business’s needs. A common business insurance policy will contain a section for fire & perils, business interruption, theft, money, glass, public liability, machinery or computer breakdown, general property (Australia wide cover) and goods in transit. A brief explanation of the cover available under each section follows:
Fire & perils
This is the main policy section. This section can insure any buildings, your contents (which are generally defined as anything you don’t sell), stock for sale and work you have in progress. You can also include the cost of removing debris, rewriting of records, employees goods and any other cost that you might have following a loss. Accidental damage can also be included as an option. Standard insured perils are:
- Fire
- Storm damage
- Lightning
- Explosion
- Malicious damage
- Impact damage
- Earthquake
The fire & perils section requires that you insure the items for full replacement value (except stock which is insured at invoice cost). Claims are settled on a replacement value basis, meaning the actual cost to replace the item. It is imperative that the sum insured you select represents the full replacement value of your assets. Failure to insure for the replacement value can result in the amount of a claim being reduced proportionally by the amount that you are underinsured.
Note that very few policies will cover flood. Flood is usually defined as water escaping onto normally dry land from any river, creek, lake, reservoir, canal, dam or other watercourse, whether natural or not.
Business interruption
This section is also known as loss of profits. It covers the loss of your gross profits following a claim under either the fire & perils or theft sections. Cover can also be included for any additional costs incurred as well as professional fees to prepare your claim. Note that failure to insure for the full value can result in a claim being reduced.
Theft
The theft section covers contents and stock as a result of theft from forcible and violent entry. Extra costs such as the cost of replacing locks & keys can also be insured. This section doesn’t require you to insure the full amount of your contents or stock.
Money
Money can be insured whilst on your business premises, in transit to or from the bank, in a locked safe or at your or your employees private residence.
Glass
This section can cover both internal and external glass, including signs and signwriting, for the replacement value following damage.
Public & products liability
Covers you and your employee’s legal liability to others, following an incident which causes property damage to other people’s property or personal injury to someone and for which you are found to be negligent in causing the damage or injury. Note that there are many extensions and exclusions that apply to different types of businesses. We can advise on the correct coverage depending on your circumstances.
Machinery / computer breakdown
This section covers repairs to your machinery or computers following a breakdown in which there has been physical damage. In the case of machinery breakdown, cover for stock in cold storage can also be insured. Extra costs such as reinstating data and hiring equipment can be included on the computer sub-section.
General property (Australia wide coverage)
This section is designed to cover contents that move around, such as mobile phones and notebook computers. Standard cover is fire & perils, theft from locked vehicle or premises following forcible entry and accidental damage. Items must be individually specified with make, model, serial number and value.
Goods in transit
This section covers stock whilst in transit between your suppliers, yourself and your customers premises. Cover can be arranged whether you are carrying the stock yourself or engage professional couriers. Standard cover is fire & perils, theft, pilferage & non-delivery and accidental damage following an accident involving the conveying vehicle. Cover is available for goods in transit by road, sea or air.
