Arrange insurance for your business
Once you have an understanding of your options and obligations, talk to insurance companies and brokers to discuss the best products for your business. Some insurers can even offer insurance package policies specially tailored to cover your business needs.
Whatever you need to insure for your business, it’s important to shop around. Talk to a number of registered insurance companies and brokers to discuss what’s best for your business.
Insurance brokers can look at a number of insurance companies on your behalf and help you get the best deal. Insurance brokers must have an Australian Financial Services (AFS) licence to operate. Check if they have a current AFS licence on the APRA’s Professional register.
For further information and advice talk to your business advisor. Find your nearest government-funded business advisor using our Advisory Services search.
Understand your insurance policy
An insurance policy is a legal contract between you and your insurance company. Each party has responsibilities they must comply with in order for the contract to be valid.
Under the Corporations Act 2001 (Cth), insurers must provide a Product Disclosure Statement (PDS) that explains their insurance products, including:
- who is offering the insurance
- any contract terms
- any information that may affect their insurance products.
It’s a good idea to read an insurer’s PDS carefully before entering into an insurance contract.
Pay particular attention to what your policy does and does not cover and in what circumstances. It’s best to review the definition of common words for unforeseen events, so you know exactly what you’re covered for. In some cases, certain events become an optional extra for an extra fee.
What insurance companies must comply with
Insurance companies must comply with regulations when you take out a policy for your business.
In Australia, the Australian Prudential Regulatory Authority (APRA) regulates insurance under the Insurance Act 1973 (Cth).
Under the Act, insurance businesses:
- must comply with regulations set by APRA, such as having enough money to cover insurance claims
- get APRA’s approval to run an insurance business
- report regulatory breaches to APRA
- must comply with the Insurance Contracts Act 1984 (Cth).
What you must comply with
Like normal contracts, insurance contracts have terms and conditions that must be met before you are covered by the insurance. Your PDS should cover these terms and can include:
Conditions of cover, such as:
- having smoke alarms in your building
- making sure you service your vehicles
- how long you’re covered before you renegotiate your insurance contract.
How much gets paid out to compensate you, such as:
- an agreed amount
- market value
- a percentage of a market value.
How much you pay for the insurance and when, such as:
- annual payout limit
- lifetime limits
- limits per claim
- what you’re covered for.
Find out more
- See our page on risk management to help you determine the types of risks your business may face.
- Understand how the differences between a sole trader and a company structure affect insurance requirements, record keeping and compliance obligations.
- Visit the ATO website for more information on whether you can claim GST credits for insurance.
- Find a list of the types of insurance available for business on our Insurance and workers' compensation page.