Types of business insurance

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.

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.

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.

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

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.

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 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.

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.

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.