As the owner of your own business, you probably already know that insurance coverage is crucial when it comes to protecting your investment. Whilst you may already have—or have at least considered—general business indemnity insurance, you may not be familiar with another type of indemnity coverage: professional business indemnity insurance. Does your business need one or both of these types of indemnity cover? Read on to find out!
General Business Indemnity Insurance
Most states in Australia require business owners to have general business indemnity cover. The minimum amount of cover required varies by area, and you're allowed to choose the upper limit of cover based on the value of your business and on your own risk tolerance.
General business indemnity insurance typically applies to the following situations.
The general business indemnity cover is there to pay for injury rehabilitation and to compensate for financial losses that others experience due to your company's actions or negligence. If you don't have general business indemnity, just one accident could be the end of your company. For example, if a customer were to have a major injury that resulted in hospitalisation and long-term disability, the judgment could be quite large, and without general business indemnity, that cost must all be paid by your company.
Professional Indemnity Insurance
Professional indemnity insurance is needed for businesses who specialise in certain types of things, including the following:
If you work in the medical, legal, construction, engineering, or other fields where you must bear responsibility for damages arising from problematic advice, professional indemnity insurance can be essential.
In most cases, professional indemnity insurance only comes into play if your company's advice resulted in verifiable monetary loss. It typically doesn't cover bodily injury, whilst general business indemnity does. Therefore, many business owners find that a combination of both types of cover is best.
Trying to operate your business with no indemnity cover is like jumping out of an airplane without a parachute—it's not worth the risk! Contact a local business insurance provider to find out more about both general and professional indemnity insurance today.Share