Purchase Business Insurance Now Avoids Catastrophic Losses Later
- Simon. P
- Sep 22
- 7 min read
Updated: Nov 26
The Startup Guide to Protecting What You're Building
Most business owners don’t think about insurance until something goes wrong — and by then, it’s too late. The right cover isn’t just about compliance or box-ticking. It’s about protecting the thing you’ve worked so hard to build.
In 2022, devastating floods hit parts of New South Wales and Queensland. Thousands of small businesses were affected — but many discovered too late that their policies didn’t cover flood damage, business interruption, or even the full value of their stock. For some, it meant rebuilding from scratch. For others, it meant closing their doors permanently.
Business insurance isn’t just a safety net. It’s how you de-risk growth, protect your team, and ensure your business can survive the unexpected. Here’s how to choose the right policies and get covered properly in Australia.
Why Business Insurance Matters (and What Happens If You Skip It)
When you’re building a business from scratch, insurance rarely feels urgent — until it is.
But here’s the truth: if something goes wrong (and eventually, something will), insurance is often the only thing standing between your business and a complete breakdown.
I’ve worked with founders who lost everything to events they never saw coming — from warehouse floods that wiped out $90K in stock to unexpected liability claims just weeks after opening a new location. The difference between survival and shutdown wasn’t luck — it was preparation. The ones who had insurance didn’t just recover; they kept moving.
Business insurance isn’t just a formality or a checkbox. It’s a strategic safety net that protects your progress, your people, and the future you’re working so hard to build.
What Is Business Insurance?
Business insurance is a safety net that protects your business from the unexpected. It covers you financially when things like property damage, legal claims, cyber attacks, or staff injuries happen — and ensures you’re meeting legal requirements in some industries.
There are different types of business insurance depending on:
What you do (industry)
Where you operate (online, physical space, both)
How big you are (sole trader vs employer)
What you sell (products vs services)
Let’s break it down.
Types of Business Insurance in Australia (with Examples)
There are two types of insurance to understand: mandatory (legally required) and recommended (based on your risk profile).
Legally Required:
Workers Compensation InsuranceIf you hire employees, this is mandatory in every state and territory. It covers your team if they get injured at work.
Public Liability Insurance (sometimes required)Required by many industries, especially if you work on-site or in public spaces. It covers injuries or property damage caused by your business.
Third Party Personal Injury (for vehicles)
If your business owns vehicles, you must have CTP (compulsory third-party) insurance.
Optional / Recommended
What Optional Insurance Should Founders Consider?
Choosing the right cover comes down to understanding your risks — which vary depending on your industry, team, and growth stage. Here’s what’s commonly recommended for startups:
Professional Indemnity Insurance
If you provide advice or professional services (consultants, designers, advisors), this protects you if someone claims your work caused them loss.
Cyber Liability Insurance
Covers data breaches, hacks, and privacy law breaches. Essential for any business storing customer data online — including eCommerce and SaaS.
Product Liability Insurance
If you sell a physical product, this protects you if your product causes harm or injury.
Business Interruption Insurance
Covers lost income if your business is forced to stop due to an unexpected event (e.g., flood, fire, cyber attack).
Directors & Officers Insurance (D&O)
Protects you as a founder or director against personal liability for decisions made in your leadership role.
Depending what industry you are in and what your business does, will determine which insurances are going to suit you best.
Coverage Basics: Limits, Excess & Exclusions (Read This)
Typical limits: Public Liability ($5m, $10m, $20m common for tenders); Professional Indemnity ($1m–$10m+); Cyber ($250k–$5m+).
Excess: Higher excess lowers premium — balance cash flow vs risk.
Exclusions: Flood vs storm, cyber exclusions, contractors vs employees, “known circumstances.” Ask for flood to be specifically included if relevant.
Business Interruption: Choose an indemnity period (e.g., 6–24 months). Many underinsure here — think in months, not days.
Sum insured: Stock, fit-out, equipment at replacement value, not just book value. Keep an asset register updated.
What You’ll Need Before You Apply
Before you start getting quotes or talking to brokers, gather:
ABN (Australian Business Number)
Business structure (sole trader, company, etc.)
Industry and activity (e.g. software, food service, retail)
Location (home-based, office, store, warehouse)
Estimated revenue and number of employees
Inventory value and assets (e.g. stock, equipment)
Past claims history, if any
Mentor Tip: This is also a great time to review your asset register and risk assessment. You’ll need these to calculate coverage amounts accurately.
How to Purchase Business Insurance in Australia:
Step-by-Step
Step 1: Identify Your Risks
Start by asking:
What products/services you offer?
What could go wrong in my business?
What would I lose if I had to stop trading tomorrow?
Am I legally required to have any coverage?
Use our Risk Identification Checklist (in ProDesk) to map this out.
Step 2: Decide What Insurance You Need
Based on your risk profile, decide on:
Must-haves (e.g. public liability, workers’ comp)
Industry-specific (e.g. cyber, professional indemnity)
Future-proofing (e.g. business interruption)
Don’t just copy another business — your needs may differ. If in doubt, talk to a broker.
Step 3: Compare Quotes Online
Use trusted comparison sites like:
BizCover
Compare The Market
Canstar
iSelect
Check policy limits, excess amounts, and exclusions.
Mentor Tip: Cheapest isn’t always best. Look at what’s actually covered and how responsive the insurer is when things go wrong.
Step 4: Speak to a Business Insurance Broker (If Needed)
If your business is complex or growing fast, a broker can:
Help you choose the right policies
Negotiate better deals on your behalf
It’s like hiring a guide instead of navigating a legal jungle alone.
Step 5: Purchase and Store Your Certificates
Once you’ve chosen your policies:
Make payment
Store all insurance certificates somewhere accessible (Google Drive, company wiki)
Add renewal reminders to your calendar
You’ll often need to provide proof of insurance (certificate of currency) for leases, grant applications, WHS compliance, or during funding rounds. Keeping these documents organised and easy to access will save time and stress throughout the year.
Which Is Better: Broker vs Direct?
Here is an overview of both options with pros and cons.
Option | Best For | Pros | Watch Outs |
Direct (insurer/ comparison site) | Simple risks, tight budgets | Fast, self-serve, transparent pricing | You own the fine print; may underinsure without advice |
Broker | Complex/fast-growing startups | Tailored advice, better wording, claim support | Broker fees or commissions; choose a startup-savvy broker |
Mentor Tip: Claims are where policy wording and process really matter. In practice, founders see better, faster outcomes when a broker runs the claim than going direct to the insurer. If you have the choice, use a broker. We can introduce you to vetted, startup-savvy brokers with a strong track record.
Claims Process
(So You’re Ready on Your Worst Day)
Make safe & mitigate loss (turn off power, secure premises).
Document everything (photos, serials, receipts, police report if theft).
Notify insurer/broker ASAP with your policy number.
Provide evidence (asset register, quotes, invoices, CCTV if any).
Assessor may visit; approve repair/replace quotes.
Settlement (cash or supplier repair).
Post-mortem: update cover limits, add endorsements, improve controls.
Cyber breach? Notify your insurer and consider reporting under the Notifiable Data Breaches scheme where applicable.
Renewal & Review Checklist
(Annual)
Revenue/employee headcount updated
New locations/equipment/stock added
Limits adjusted (PLI/PI/Cyber/BI)
Excess settings still appropriate
Endorsements (flood, portable equipment, refrigerated stock, product recall)
Claims history reviewed; risk improvements documented (can lower premiums)
Certificates of currency shared with landlords/clients
What It Costs (Ballpark Figures)
Public Liability Insurance: From $400–$1,500/year
Professional Indemnity: From $500–$2,000/year
Cyber Insurance: From $300–$1,200/year
Product Liability: Often included with public liability
Workers’ Compensation: Calculated by state, based on wages paid
Business Interruption: From $500–$3,000/year (depending on size/turnover)
Money-Saving Tip: Bundle policies to get a better deal — some providers offer discounts for multiple policies under one roof.
Common Mistakes Founders Make
Assuming your home insurance covers your business
Running your business from home? Your personal insurance usually won’t cover work equipment or liability.
Delaying insurance until “we’re bigger”
A single legal claim or flood could end your business before it grows. Insurance is protection for your growth — not a reward for it.
Not reviewing policies annually
As you grow, your coverage should grow too. What worked last year might leave you exposed now.
Skipping cyber protection
Even small startups get hacked. If you store customer data, you need coverage.
What to Do Right Now
✅ Need expert advice? We can connect you with startup-friendly brokers who understand early-stage needs [Noize.com.au]
✅ Check out the Startup Deck — It includes our full risk management toolkit, with templates and prompts for protecting your business [theStartUpDeck.com]
The Bottom Line
Business insurance isn’t about playing it safe. It’s about playing it smart.So if you’re building something you believe in — protect it.Because real growth comes not just from dreaming big, but from preparing for what could go wrong along the way.
FAQs
What business insurance is mandatory in Australia?
Workers Compensation (if you employ staff), CTP for vehicles, and public liability in many contracts/industries. Check your state and industry requirements.
How much public liability insurance do I need?
Common limits are $5m, $10m, or $20m. Tenders and landlords often specify a minimum — start there.
Is business insurance tax-deductible?
Premiums are generally deductible if the policy is for earning assessable income. Confirm with your accountant.
What’s a Certificate of Currency?
Proof you’re insured (policy number, dates, limits). Landlords and clients often ask for it before you start work.
Do I need cyber insurance if I use cloud tools?
Yes if you store personal data, take online payments, or host a site. Cloud doesn’t remove your breach liability.
What indemnity period should I choose for business interruption?
Many choose 12 months; higher-risk businesses or long repair lead times consider 18–24 months.
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