Government statistics show that over six hundred thousand women in Australia operate their own small business.
Small business plays an important role in the economy, employing around 4.5 million people and driving innovation across the country. According to a 2015 ABS report, A Profile of Australian Women in Business, the number of women business operators in Australia has increased by 46% in the last decade – compared to just 27% for male business owners – and they now make up over a third (thirty four percent), of all business operators. However, despite this increase in participation, it is also more common for women in business not to be able to afford to pay themselves a wage, not to make contributions to their superannuation and not to have adequate insurance to cover the personal and commercial risks of running their small business.
SMALL BUSINESS COMPLIANCE AND RISK MANAGEMENT
Operating a small business is not just about the freedom of working for yourself, setting your own schedule and the desire for better work-life balance, which is often a motivating factor for women, especially women with children. Running a small business also requires the necessary management skills, industry expertise, technical skills, finance, and a long-term vision to grow and succeed. You also need to understand the relevant risks and government requirements that apply to you. These include taxation, employment, business finances, council approval and licensing requirements, and insurance for home-based businesses.
An intricate part of running your business is about making sure that as a part of meeting your compliance requirements, you cover yourself for unexpected risks. When you’re an employee working for a large organisation, rarely are you personally liable or at risk in relation to the business activities of your employer. However, if you’re the owner of a small business, all the risk falls fairly and squarely on your shoulders.
One of the most important ways you can mitigate your risk is by having adequate insurance cover that meets the needs of both your business requirements and your personal circumstances.
WHAT TYPE OF INSURANCE DO HOME-BASED BUSINESS OWNERS NEED?
There are many types of insurance policies tailored for home-based businesses. Before you decide on an insurance policy, it really does pay to shop around and compare different providers to select what's best for you. You need to find a product (or a suite of products) that provide the type of cover that meets the needs of you and your business.
If you’re running a home-based business, you need to make sure you have the correct level of insurance to protect yourself, your business and your home. It's also important to understand that standard homeowner policies do not generally provide cover for home-based business activities.
Before choosing an insurance policy you'll need to evaluate the specific insurance needs of your small business and then assess the products available against those needs. Your insurance requirements may vary considerably depending on the type of business you operate.
There are three broad types of business insurance:
When looking at insurance providers, consider the following types of insurance for your small business:
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Public liability cover for persons visiting your business at home (e.g. customers and suppliers).
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Property insurance for your business and assets, including cover for fire, storm and theft cover for the loss of any stock and equipment.
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Workers' compensation for any employees working from your home.
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Professional indemnity insurance if you are giving advice to people or are in a service industry. Many Government contracts require you to hold Public Liability and Professional Indemnity Insurance.
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Loss of income due to accident or illness.
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Costs arising from an interruption to your business (fire destroys your house).
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Transit insurance if you send products via freight carriers or post.
It's important to note that some policies don't cover your tools of trade, office furniture or computer equipment used for your business, unless you and your insurer have agreed to cover them.
Small business owners running a business at home, often get caught out because they have the wrong type of insurance, or inadequate cover for damage to their home.
HOME BUSINESS INSURANCE CASE STUDY: WENDY, A HAIRDRESSER, RUNNING A BUSINESS FROM HOME
When Wendy returned from a holiday with her family she found that her house had been burgled – almost everything had been stolen. Wendy made a claim on her Home and Contents insurance policy and the company sent out an assessor to assess the claim. Within minutes the assessor commented on how many people Wendy had at her home. Wendy explained that she was a Hairdresser and she ran her business from her home.
The Insurer determined that since Wendy’s home was used as a home-based hairdressing business, the claim against Wendy’s domestic Home and Contents insurance policy was not valid because she was running a business from home and had not disclosed to the insurer this important fact. Essentially, Wendy’s insurance was declined for non-disclosure.
Insurers require full disclosure of any fact that is relevant to the insurer underwriting your risk when you take out an insurance policy. Running a business from home changes the nature of the risk and therefore must be disclosed to the insurer prior to taking out the policy.
These stories are all too common and we have heard about many similar situations from small home-based businesses. When you start running your business from home, you must phone your current Home and Contents insurer and disclose that information to them. If they agree to continue your current insurance policy, insist that you get written confirmation that your business activities have been included on your domestic Home and Contents policy. A verbal okay is no guarantee. If your insurer won’t cover you for that risk, then you need to find an insurance provider who offers the type of product that will cover you adequately for your risk.
IMALIA SUPPORTS WOMEN SMALL BUSINESS OWNERS
Here at Imalia, we’re committed to helping women running a small business to succeed. To that end, we’ve created a range of complimentary products that provide comprehensive cover for small business owners, from both a personal and a commercial perspective.
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My Home Business Cover: Imalia provides a one stop-shop property solution for people that operate a business from the home they live in. Many domestic insurers will not provide cover for the home and contents once a person earns an income from home as their home is both their primary residence and their business premises. My Home Business Insurance also offers cover for Business Interruption. For example, if your home burns down, you not only lose your home, you may also lose your Home Business income, at least until the home is repaired or replaced or you have found alternative premises. This product provides cover for the property in which you operate your home-based business.
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My Professional Advice and Services Cover: If you do something (or neglect to do something) in the course of your work, and a client suffers financial loss as a result, they may commence a legal action against you. It’s important to protect your business against claims of malpractice or professional misconduct. Imalia's Professional Advice & Services Cover safeguards your business by providing cover against such claims, including legal defence costs. It protects your business against claims, including legal costs, by third parties for damages arising from negligent acts, omissions or breaches of professional duty in the course of your business.
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My Computer Security and Data Protection Cover: If your company has a web presence or a dependency on technology you have emerging content and transactional exposures to address. Data breaches affect hundreds of millions of records a year and continue to rise at a dramatic rate. Imalia's Computer Security and Data Protection cover has been developed with our specialist insurers to cover your business for costs incurred as a result of your computer systems failing or being hacked and your client data being stolen, manipulated or destroyed.
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My Commercial Legal Expenses Cover: Imalia's cover provides access to advice and cover for the legal costs of pursuing or defending certain classes of legal action. It is not a substitute for, but the perfect complement to your company’s liability, professional indemnity, directors & officers or management liability insurance policies.
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My Death, Accident & Sickness Cover: No matter how careful you are, accidents happen to us and our loved ones, and sickness can occur at any time. These times can be very stressful for you and your family, but they may also have a great effect on your ability to earn an income and pay your bills. When the unexpected happens, you need to know that there is something that can help pay the bills whilst you get yourself back on your feet.
If you would like to discover more about Imalia’s ‘My Home Business Cover’ click on the button below to download the Fact Sheet.
Find out more about Imalia's My Home Business Cover.
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