An expanding business is likely to be having dealings with an ever-increasing number of individuals, getting involved in a wider range of commercial activities, even expanding into new locations.
A growing business usually requires a growing workforce. More equipment and larger premises means more expensive rent payments. In such circumstances, any revenue-disrupting interruption to its activities can soon escalate into a cashflow crisis.
In short, the cover that was sufficient when you were a sole trader or running a small start-up isn’t likely to be adequate once you’re heading up a thriving enterprise. The end of the financial year is a great time to think about how your business has changed over the last 12 months and review your insurance policies. If you’re pressed for time or simply want the reassurance of an expert opinion, one of Fitzpatrick & Co’s friendly brokers can assist you.
Employers’ Liability Insurance
When it comes time to make your first employee hire, you’ll be legally required to take out workers’ compensation insurance. You should consider taking out a form of back-up workers’ compensation insurance called employers’ liability insurance. This is because it’s possible for an employee to suffer an illness or injury that is job-related yet not covered under a standard workers’ compensation policy (employers’ liability insurance can cover for these types of illnesses, injuries, and fatalities.) Even if it’s not a legal requirement, to be an employer of choice, you could have employers’ liability insurance as an additional benefit if you want your employees to have better cover in the event of an employee suffering a misfortune.
Business Interruption Insurance
The more your business grows, the larger its fixed costs are likely to be and the more expensive an interruption to its smooth functioning will become. A suburban café may only be out of pocket a few hundred dollars if a blackout means it has to shut down for the afternoon.
In the digital age, an IT issue can be as devastating as any fire, flood or storm. The two threats businesses, especially smaller ones with limited IT budgets, most need to worry about are ransomware attacks and data theft.
A ransomware attack results in a business’s files being encrypted. Important data is rendered inaccessible, which can make it difficult or impossible for a business to keep operating – until a ransom is paid to return things to normal. It’s estimated that, globally, ransomware inflicted US$5 ($A6.5 billion) of damage in 2017.
Governments in Australia and elsewhere are tightening privacy regulations and stiffening financial penalties for data breaches. If a malicious actor overcomes your cyber security and captures your customers’ personal data, the consequences can be more serious than brand damage. You could find yourself being investigated by the government regulator and being sued by your customers. Cyber insurance can help cover financial losses arising from a cyber security breach.