When starting or buying a business, it's important to accurately assess your insurance cover requirements and to include the cost of insurance in your budgets and forecasts.
Insurance is a complex area, so make sure you understand all the terms and conditions of the insurance contract and obtain independent advice from your accountant, solicitor or business advisor before you sign.
Insurance cover may be arranged through an insurance company, an insurance company agent, or an insurance broker.
You may decide to arrange your insurance directly with an insurance company. If you do, keep in mind that an insurance company will act in its own best interests and only offer you their particular products.
Before selecting your insurance supplier, be sure to shop around and compare policies for the level of cover provided along with price, service, reputation and other features. Pay particular attention to what is covered and what is excluded.
Insurance agents will act in their own best
interests or those of the insurance company. They usually represent one insurance company and will promote the insurance policies of that particular company exclusively.
Insurance brokers act for the client. Brokers have access to policies from a range of insurance companies and can arrange a business insurance package to cover the risks specific to your business. They are entitled to charge a fee which may be offset by the lower premiums they obtain.
Insurance brokers in Australia must be licensed with the Australian Securities and Investments Commission (ASIC). Check if a broker is licensed by searching the ASIC registers .
How to find a broker
Select a broker that deals with similar small businesses in your industry.
Start by obtaining referrals from your industry association or see the National Insurance Brokers Association (NIBA) needabroker website where you can search for specialist brokers in your location.
Also see NIBA's information on how to select a broker for questions to ask potential brokers.