Types of business insurance
The right insurance helps protect your business, customers and income. Understand the different types of insurance and which ones your business needs.
Insurance is an important way to reduce your business risks. It helps protect your:
- customers
- earnings
- employees
- business assets (such as equipment, premises and stock).
Your business may need certain types of insurance by law or because people you deal with need it. Other types of insurance are your choice.
This page helps you understand the types of insurance available for your business. It does not replace professional advice.
Insurance you need by law
By law, you may need some insurances to run your business. These depend on the type of business, but the most common are:
- public liability insurance, which some states and territories need for certain occupations
- workers compensation insurance, if you have employees
- third party personal injury insurance, if your business uses motor vehicles. This is often part of your vehicle registration fee.
Get professional advice on which insurances your business needs by law.
Workers compensation insurance
Employers must get workers compensation insurance from an authorised insurer. This covers you and your employees against financial hardship if they become injured or sick because of work.
The laws vary in each state and territory. Check how to comply with your state or territory regulator. They can also tell you how to get workers compensation insurance.
Workers compensation for contractors
If you’re an independent contractor, you may need your own insurance. See our contractors topic for more information.
If you employ a contractor in your business, check with the workers compensation regulator in your state or territory.
Workers compensation for sole traders
If you’re a sole trader, workers compensation insurance doesn’t cover you. You’ll need to get your own personal death, illness and disability insurance.
You can take out accident and sickness insurance through a private insurer. The policy will pay you for loss of income while you recover.
State and territory regulators
Contact the workers compensation regulator in your state or territory:
- Australian Capital Territory: WorkSafe ACT
- New South Wales: State Insurance Regulatory Authority
- Northern Territory: NT WorkSafe
- Queensland: WorkCover Queensland
- South Australia: ReturnToWorkSA
- Tasmania: WorkSafe Tasmania
- Victoria: WorkSafe Victoria
- Western Australia: WorkCover WA
Personal or loss of income insurance
There are many types of business and personal insurance for losses to your income.
- Income protection covers part of your income if you’re unable to work because of sickness or an accident.
- Life insurance pays you (or your beneficiaries) a lump sum or series of payments if you become terminally ill or die.
- Total and permanent disability insurance pays you a lump sum if you become permanently disabled before you retire.
- Trauma insurance pays you a lump sum for a specified life-threatening illness.
- Business interruption insurance pays your ongoing business costs if an insured event interrupts your business, such as a fire damaging your business property.
- Employee dishonesty insurance covers your business for losses from employee theft or fraud.
Stock, products and asset insurance
These insurance products protect your business assets, property, stock or products.
- Building and contents insurance covers damage or loss from events including fire, storms or break-ins.
- Burglary insurance covers losses, damages and associated costs from a break-in or theft.
- Deterioration of stock insurance covers lost stock in cold storage after a fridge or freezer breaks down.
- Farm insurance covers crops, livestock, buildings and machinery.
- Goods in transit insurance covers the items you buy, sell or use in your business for loss or damage during transport.
- Machinery breakdown insurance covers repair or replacement of broken-down machinery.
Liability insurance
Liability insurance can minimise the impact on your business if you’re liable for damages or injuries to another person or property.
Some businesses must have liability insurance before they can legally operate. Other business might want this insurance if there’s a high chance of legal action.
There are several types of liability insurance available. Some may be more relevant to your industry than others. Check our industry information or contact your industry association for more details.
Management liability insurance
This insurance covers directors, officers and managers for claims against their management practices. It also protects your assets if these practices cause losses to people or businesses.
Management liability insurance is complex. Most policies are available as a package covering:
- directors’, officers’ and trustees’ liability
- employment practices liability
- employee theft or third-party crime
- government fines or tax audit cost
- cyber and privacy liability
- statutory liability.
Talk to your insurance broker or authorised insurer about policy options for your business.
Product liability insurance
You may need product liability insurance if you make, sell or supply goods, even in the form of a repair or service.
This insurance covers you if your product causes any of these events happen to another business or person:
- injury
- death
- property damage.
Professional indemnity insurance
Professional indemnity insurance helps cover the cost of legal action from claims against your professional advice or services.
It covers mistakes, neglect or breaches of contract that result in a loss for your client. For example:
- not achieving the results of a contract
- giving the wrong financial or legal advice
- auditing a company’s accounts incorrectly
- medical malpractice when performing a surgical procedure.
Professional indemnity insurance is mandatory for some professions.
Check insurance options with your professional association. They may offer industry-specific indemnity insurance at a much lower cost.
Public liability insurance
Public liability insurance covers you if someone dies, gets injured or has their property damaged because of your negligence.
It may cover:
- injury or death, such as your food making a customer sick
- emotional distress or a recognised psychiatric illness
- property damage, such as causing a fire
- consequential loss, where negligence causes another business to lose expected revenue.
Technology and cybercrime insurance
As technology evolves, so does the insurance cover businesses need to protect against new risks.
Electronic equipment insurance
Electronic equipment insurance covers your electronic items from breakdown, loss or damage while they’re at a specific location. It doesn’t cover theft.
Electronic items can include:
- computers
- tablets
- phones
- printers
- point of sale systems.
Portable equipment insurance
Portable equipment insurance covers you for accidental loss, damage or theft. It’s for tools and electrical equipment you take on a job with you.
Cyber insurance
This helps protect your business from the costs of cybercrime. It can cover costs to do with:
- cyber extortion or ransomware
- interruptions to your business because of a cyber event
- network security and data breaches, including data recovery costs
- inadvertent loss or release of customer personal information.
Talk to an insurance broker or insurer about your options. Read more about cyber security and how to protect your business from cyber threats.
Where to get advice
Talk to a licenced insurance broker, insurer or business adviser for further advice.
You can:
- find an authorised general insurer on the Australian Prudential Regulation Authority’s register
- check an insurance broker’s license on the Australian Securities and Investments Commission's professional register.
Ask insurers if they offer insurance packages tailored for your business type. These can be cheaper than taking out separate insurance policies.
We use cookies to give you a better experience on our website. Learn more about how we use cookies and how you can select your preferences.