A business package is one of the most useful ways for a small business to bundle its insurance. But “package” doesn’t mean “everything”. Most policies combine property, theft, glass, money, business interruption and liability sections, and several risks sit outside them. Here are nine common gaps we see with Melbourne small businesses, and what you can do about each.
This is general information only. What is covered depends on the insurer and the policy wording, so always check your Product Disclosure Statement.
1. Cyber attacks and data breaches
Standard packages often exclude cyber events or offer only limited cover. If you store customer details, take online payments or rely on a computer system to trade, a ransomware attack or data breach can stop your business and cost a lot to put right. Cyber insurance is usually a separate policy, although some insurers offer it as an optional section. See our cyber insurance page for what it can include.
2. Mistakes in your professional advice
Public liability covers injury or property damage to other people. It generally doesn’t cover a claim that your advice, design or service was wrong and cost a client money. That is the job of professional indemnity insurance, which matters for consultants, designers, IT businesses and other service providers.
3. Injuries to your employees
A business package isn’t a substitute for workers compensation. If you employ staff, workers compensation is generally compulsory, and the rules vary by state. In Victoria it is arranged through a WorkCover policy. Ask your accountant if you are unsure whether you need one.
4. Business vehicles
Vehicles are usually insured separately, under a commercial motor policy. That includes vans, utes and trucks used for deliveries or on site. A package may cover the contents of your premises, but it typically won’t cover your fleet.
5. Decisions made by directors and managers
Claims about how the business is run, such as employment disputes, alleged breaches of duty or regulatory investigations, are generally outside a package. Management liability insurance is designed for these risks, and it matters more as you take on staff or grow.
6. Wear and tear, and poor maintenance
Insurance responds to sudden, unexpected events such as fire, storm or theft. It generally doesn’t pay to repair gradual deterioration, rust, leaks that built up over time or equipment that simply wore out. Regular maintenance records can help if you ever need to claim.
7. Sums insured that are too low
This isn’t an exclusion, but it is one of the most costly gaps. If your building, contents or stock are insured for less than it would cost to rebuild or replace them, a claim may be paid at a reduced amount. Review your sums insured every year, and after any fit-out, equipment purchase or stock increase. Our commercial property insurance page explains more.
8. Business activities you haven’t told the insurer about
Your policy is based on the activities you declared. If you start offering a new service, work at heights, sell online or take on a different type of customer, tell your broker. An undeclared activity can lead to a claim being reduced or declined.
9. Tools, stock and equipment away from your premises
If your tools, laptops or stock travel with you, check whether the policy covers them away from your premises, in a vehicle or in transit, and what the limits and conditions are. Trades and mobile businesses are often caught out here. See our trades insurance page for options.
How to close the gaps
- Read your schedule and PDS. Check the sections you have, the sums insured, the excesses and the exclusions.
- List what’s missing. Compare it with how your business actually operates, including staff, vehicles, online activity and work away from your premises.
- Ask your broker. A broker can explain what each policy does and doesn’t do, and arrange the extra covers that suit your business.
- Review it every year. Businesses change, and your insurance should change with them.
Talk to a Melbourne Broker
If you’d like a second opinion on your current cover, Reliant Business Insurance can review your business package and explain where the gaps may be. Call 03 8905 4753 or request a free, no-obligation quote.
This is general information only and does not take into account your objectives, financial situation or needs. Please read the relevant Product Disclosure Statement and our Financial Services Guide before making a decision. Cover is subject to policy terms, conditions and exclusions.