1. Get insurance advice


It’s important to shop around for business insurance. Talk to a number of registered insurance companies and brokers to discuss what’s best for your business.

Insurance brokers can look at different insurance companies to help you get the best deal. Check Australian Securities & Investments Commission (ASIC) professional register to make sure your broker has a current Australian Financial Services (AFS) licence – they must have this to operate.

2. Understand your insurance policy


An insurance policy is a legal contract between you and your insurance company. You both have responsibilities that you must comply with for the contract to be valid.

An insurer must provide a Product Disclosure Statement (PDS) that explains the insurance products, including:

  • who offers the insurance
  • any contract terms
  • any information that could affect the insurance product

Before deciding on an insurance contract, it’s a good idea to read the insurer’s PDS carefully. Pay particular attention to:

  • what your policy does and does not cover, and in what circumstances
  • definitions of common words for unforeseen events, so you know what you’re covered for (in some cases, events become an optional extra for an extra fee)
  • how you get paid – is it an agreed amount, a market value or a percentage of a market value?

3. Check what you have to do


The insurance contract will have terms and conditions that you must meet to be covered. Your PDS should include these details, which may include:

Conditions of cover, such as:

  • having smoke alarms in your building   
  • making sure you service your vehicles   
  • how long before you need to renew your insurance contract

How much you pay for the insurance and when, such as:

  • annual payout limit
  • lifetime limits
  • limits per claim
  • what you’re covered for

Claiming GST credits for insurance

Did you know that if you're registered for goods and services tax (GST), you may be able to claim credit for the GST in your insurance premium?

4. Manage your insurance policies


Once you have insurance, keep an eye on your policies. Businesses are always changing and growing, so don’t leave yourself with insurance cover that isn’t keeping up.

As the costs and the value of your assets change over time, it’s common for:

  • your insurance premium to change
  • the insurable value of your assets to go down

Examples:

  • Amanda buys a car for her business for $40,000. The insurance company agrees to insure her car for $40,000 for 1 year. Her insurer thinks the car's useful life is 5 years, so they depreciate it at a rate of $8,000 per year. So, her insurer only offers to insure the car for $32,000 in the second year.
  • Stewart's business buys $150,000 of chairs to sell in his store. He insures his stock. After a year, the market value of chairs drops, so now the chairs are only worth $100,000. His insurer only offers to insure his chairs for $100,000.

Insurance contracts don't typically compensate for depreciation or a change in market value. You may need to re-evaluate your insurance policies to make sure that your business has the right cover. Shop around and talk to a number of insurance companies and brokers to discuss what is best for you. For tips, go to MoneySmart's renewing your insurance.

5. Make an insurance claim


Before making a claim, it's good to get supporting evidence. This might include:

  • photographs
  • notes
  • copies of computer records

You should inform your insurance provider, and if necessary, report any incidents to the police or other relevant authorities. Make sure you have details about how and when the incident occurred, and how it will affect your business.

You may need to make emergency repairs to minimise or prevent further damage to your business or your assets. If so, check your policy first to be sure it covers you for any repairs you make. Keep copies of all invoices and bills so you can provide them to your insurance provider.

Consider whether paying for any repairs or replacements yourself will be better value than paying your excess for a claim.

Remember: it's important to be completely upfront when providing details for a claim. If you need to add details later, an auditor may delay or refuse your payment. Any claims you make can also affect your future insurance rating.

6. Dispute an insurance claim


If you have a dispute with your insurer about a claim, read the PDS to ensure you understand the terms and conditions. Once you’ve checked the PDS, raise your dispute with the insurer. You should clearly state:

  • that you’re lodging a formal dispute
  • what the problem is
  • what you would like the insurer to do to help

If you still aren’t happy with the outcome, consider contacting the Australian Financial Complaints Authority (AFCA). AFCA assist small businesses to reach agreements with financial firms about how to resolve their complaints.

If you’re unhappy about a workplace injury claim decision, you can seek a review through the workers' compensation review process in your state or territory.