Business insurance is a bundle of policies that protects your business finances when things go wrong. It can cover third‑party injury and property damage claims, damage or loss to your own premises, equipment and stock, cyber incidents, disruptions to trading, and even vehicles used for work. Some covers are required by law in Australia (like workers’ compensation and CTP for vehicles), while others are optional but often essential.
This guide explains what business insurance typically covers in Australia, how it differs from public liability, what’s compulsory, and the key policies to consider—from liability and property to cyber, transit and motor. You’ll learn about common exclusions, costs and pricing factors, how to choose limits, meet contract requirements, claim confidently, and practical ways to save. Let’s start with what business insurance covers in Australia.
What business insurance covers in Australia
Think of business insurance as a toolkit you assemble to match your risks. In Australia, it can protect your cash flow against third‑party claims, damage or loss to your premises and equipment, cyber incidents, and loss of income when an insured event stops trade. Some covers are compulsory (such as workers’ compensation and CTP for vehicles); others depend on your industry, contracts and risk profile.
- Public and product liability: Third‑party injury, death or property damage claims.
- Professional indemnity: Alleged errors or negligence in your advice or services.
- Property (building, contents, stock): Fire, storm, break‑in and other defined events.
- Business interruption: Lost income and fixed costs after insured property damage.
- Cyber insurance: Ransomware, data breaches, response and recovery costs.
- Workers’ compensation: Employee injury or illness arising from work.
- Commercial motor: Damage to work vehicles; CTP covers third‑party injury.
- Goods in transit: Loss or damage to goods while being transported.
Business insurance vs public liability: how they differ
“Business insurance” is the broader package of covers that protects your own assets, income and liabilities. Public liability is a single policy within that toolkit. It covers your legal liability if a third party is injured or their property is damaged due to your negligence, and is often required by contracts or certain occupations in some states and territories.
- Public liability: Third‑party injury/property damage only; it won’t cover your stock, premises, cyber losses or professional advice.
- Business insurance pack: Modular bundle that can include public liability plus property, business interruption, cyber, transit, motor and more.
- Which to choose? If you deal with the public, you’ll likely need public liability; if you also have assets or rely on ongoing trade, add wider business insurance covers.
Compulsory insurance you may need by law
Some business insurance is legally required in Australia, depending on where and how you operate. At a minimum, employers must cover workers, vehicles on the road need personal injury cover, and certain trades or contracts require liability insurance. Some professions and industries also have their own compulsory schemes.
- Workers’ compensation: Mandatory if you employ staff and must be purchased from an authorised insurer. Contractors may be deemed workers. Sole traders aren’t covered.
- Compulsory Third Party (CTP): Required for any registered vehicle; usually bundled with registration.
- Public liability: Required for certain occupations or in some states/territories, and often by councils, landlords and worksites.
- Industry/profession rules: Home building/warranty schemes in construction; professional indemnity is mandatory for some professions.
Always check your state or territory regulator for exact requirements.
Key liability covers explained
When people ask what is business insurance, liability cover is usually the foundation. It responds when your business is held legally responsible for injury, property damage or financial loss. Choose the mix that fits how you operate, your contracts, and your exposure to claims.
- Public liability: Covers third‑party injury or property damage arising from your negligence. Commonly required by landlords, councils and worksites.
- Product liability: If you make, sell or supply goods (including repairs), this covers injury, death or property damage caused by your product.
- Professional indemnity: For advice‑based services. Covers alleged errors, omissions or negligence (e.g. faulty advice) plus defence costs. Mandatory for some professions.
- Management liability/D&O: Protects directors, officers and managers for claims about management practices. Packages can include D&O, employment practices, crime, tax audit costs and statutory liability. Complex; excludes deliberate fraud.
- Employment practices liability: Covers claims such as wrongful dismissal, discrimination, bullying and harassment, including defence costs.
- Statutory liability: Helps with investigations, defence costs and certain penalties for unintentional breaches of some laws; cover terms vary by insurer and jurisdiction.
Property and assets covers explained
Your premises, equipment and stock are your earning engine. Property and assets covers help repair or replace them after insured events, but triggers and limits vary by policy. Check what events are defined (e.g. fire, storm, malicious damage), how “flood” is defined as it may not be covered, and any sub‑limits on stock or equipment.
- Building & contents: Damage from fire, storm, malicious damage or break‑ins.
- Burglary & theft: Stolen property plus damage to locks, safes and premises.
- Glass & signage: Accidental breakage of internal/external glass and fixed signs.
- Machinery/electronic breakdown: Repair or replacement of specified plant and electronics after breakdown.
- Deterioration of stock: Spoiled refrigerated stock after fridge/freezer breakdown.
- General property/portable equipment: Tools and devices you take off‑site, including theft.
- Money: Loss of cash on premises, in transit or temporarily at a residence.
Business interruption insurance and key terms
Business interruption insurance helps replace lost income and cover ongoing expenses when an insured event damages your business property and stops or slows trade (for example, a fire). It can fund costs to keep you operating while repairs are made, such as temporary premises and staffing, but the trigger and scope are defined by your policy.
- Trigger (insured event): Usually responds after insured property damage interrupts your business.
- Indemnity period: The time you choose to cover loss of gross profit; select a realistic recovery window.
- Covered costs: Rebuilding, finding and outfitting new premises, and staff-related costs.
- Disaster definitions: Not all natural disasters (e.g. flood) are covered—check definitions carefully.
- Adequacy of sums insured: Underinsurance can reduce payouts; review limits and sub‑limits regularly.
Cyber and technology-related cover
Technology powers most businesses, so a cyber incident or device failure can stop trade. Cyber and technology-related cover protects data, systems and work devices. You’ll usually combine three options: cyber insurance, electronic equipment cover at your premises, and portable equipment cover for items you take off‑site.
- Cyber insurance: ransomware/extortion, network‑security and data breaches (incl. recovery), business interruption from a cyber event, and inadvertent release of customer data.
- Electronic equipment insurance: breakdown or accidental damage to computers, POS and printers at a specified location; theft isn’t covered.
- Portable equipment insurance: accidental loss, damage or theft of tools, laptops and devices taken to jobs.
Goods in transit and marine cargo
If you move stock or equipment, goods in transit and marine cargo insurance can cover loss or damage to items you buy, sell or use while being transported—domestically or internationally—by road, rail, sea or air. Typical insured events include collision, fire and theft. It’s valuable for retailers, e‑commerce, importers/exporters and manufacturers.
- Scope: Confirm door‑to‑door cover, storage between legs, and whether third‑party carriers are included or only your own vehicles.
- Territory and modes: Check Australian‑only transit versus overseas cargo, and all transport types.
- Perils and limits: Review defined events, theft conditions and any sub‑limits for high‑value items.
Motor and commercial vehicle cover for businesses
Work vehicles need purpose‑built motor cover. Commercial motor insurance pays to repair or replace your vehicle after insured events and covers your liability for damage to others’ property; CTP separately covers third‑party personal injury. Choose cover for a single ute or an entire fleet, including rideshare, taxi and courier vehicles.
- Comprehensive: Covers your vehicle for collision, theft, fire and weather events, plus third‑party property damage.
- Third Party Property Damage only: Pays for others’ property damage you cause; not your own vehicle.
- Useful options: Preferred repairer networks, 24/7 towing, and a hire/replacement car when you’re not at fault.
Insurance for home-based businesses and sole traders
Running a business from home doesn’t remove risk. Your home and contents policy usually won’t cover business activities; in some cases you might be covered if the business uses less than 20% of the home and you don’t have visitors, but check your policy and disclosure duties. Sole traders aren’t covered by workers’ compensation, so consider personal accident/sickness or income protection.
- Public liability: Protects you if a visitor is injured at your home office or you damage a client’s property off‑site.
- Professional indemnity: Essential if you provide advice or services that could cause financial loss.
- Portable/general property: Covers laptops, tools and devices you take to clients or jobs.
- Electronic equipment/breakdown: Repairs or replaces computers, POS and other electronics used at home.
- Contents and business interruption: Replaces damaged stock/equipment and helps cover lost income after insured events.
- Money insurance: Covers cash kept at home or in transit to the bank.
- Commercial motor and CTP: CTP is mandatory; add commercial motor if you use a vehicle for work.
Tell your home insurer about your business activity to avoid denied claims, and keep proof of cover for clients or landlords if asked.
What business insurance doesn’t cover (common exclusions and pitfalls)
Policies have clear boundaries. Claims often fail because the event isn’t covered, the wrong policy is used, or the sums insured are too low. Read your policy definitions and sub‑limits carefully—especially around natural disasters, equipment, cash handling and what must happen before repairs start.
- Flood and inundation limits: Not all “flood” is covered; watercourse overflow and stormwater are treated differently.
- Wrong policy/trigger: Business interruption usually needs insured property damage; breakdown cover won’t pay for maintenance or theft.
- Underinsurance: If your sums insured are too low, payouts can be reduced.
- Money handling exclusions: No cover for unattended vehicles, keys not secured in a safe, or clerical/accounting errors.
- Device cover limits: Electronic equipment insurance excludes theft; it covers breakdown/accidental damage at a set location.
- Fraud and dishonesty: Management liability/D&O won’t cover fraudulent or deceptive conduct.
- Unauthorised repairs: Starting clean‑ups or repairs before insurer assessment after disasters can void claims.
How much does business insurance cost in Australia?
There’s no flat price tag because business insurance is modular. Premiums vary by the risks you face and the cover you choose. Insurers look at your industry, where and how you operate, your claims history, and the limits, sums insured and excess you set for each policy.
- Cover mix: Liability, property, business interruption, cyber, transit, commercial motor.
- Limits and sums insured: Higher limits and longer indemnity periods cost more.
- Size and exposure: Turnover, payroll, headcount and how much public contact you have.
- Location and security: Premises security, storage, and exposure to severe weather.
- Claims and excess: Past claims, chosen excess, and risk controls/repairer networks.
Compare like-for-like quotes on the same limits and indemnity period, and check sub‑limits and exclusions so a cheaper premium still fits your risks.
How to choose the right cover and policy limits
Selecting business insurance starts with your risks, legal obligations and contracts. Map what could hurt your cash flow—people, premises, equipment, cyber, vehicles and income—then build cover around those exposures. Set realistic sums insured (what it would cost to replace or restore) and choose an indemnity period that reflects how long you’d actually need to recover loss of gross profit after insured damage.
- Meet legal must‑haves: Workers’ compensation if you employ staff and CTP for vehicles; some occupations and professions require liability or professional indemnity.
- Follow contract minimums: Landlords, councils and clients often specify public liability or PI limits; don’t bid below what your contract requires.
- Value property properly: Use current replacement costs for buildings, contents and stock; review sub‑limits for tools, electronics and money.
- Pick the right triggers: If a breakdown could halt trade, add machinery/electronic breakdown; if a cyber event would bite, add cyber.
- Set a suitable indemnity period: Choose a timeframe that covers repair, relocation and regaining customers—not just reopening.
- Watch disaster definitions: Understand what your policy means by storm, flood or inundation to avoid surprises.
- Avoid underinsurance: Review limits annually as turnover, payroll, equipment and stock change; underinsurance can reduce payouts.
- Get expert help: A licensed broker can compare like‑for‑like terms, spot exclusions and tailor packages to your industry and size.
Certificates of currency and contract requirements
Tenders, leases and site inductions often require a certificate of currency to prove you hold current insurance. Issued by your insurer or broker, it confirms who is insured, what cover and limits are in place, and that the policy is active on a specific date. It’s commonly requested to verify policies haven’t lapsed (especially with monthly premiums) and to check you meet contract minimums.
- What it proves: insured entity, type/scope of cover, active/valid date.
- Who asks: landlords, councils, head contractors and major clients (e.g. tenders).
- How to get it: request from your insurer/broker; usually emailed quickly.
- Practical tips: match the legal entity name, show required limits for each policy, and ensure dates align with the contract or work start.
How to make a claim and what to do after a loss
When something goes wrong, fast reporting and clear evidence make the biggest difference. Focus on safety, prevent further damage, then follow your policy conditions so your insurer can assess and settle quickly.
- Prioritise safety: Make the site safe, isolate utilities and call emergency services if needed.
- Notify your insurer/broker ASAP: Check any time limits and don’t start clean‑ups or repairs until an assessor has inspected or you’re authorised—policies can be voided otherwise.
- Minimise further loss: Tarp broken roofs, move undamaged items to safety and keep receipts for emergency expenses.
- Document everything: Take photos/video, list affected stock/equipment with serials and values, keep invoices/contracts and note incident details and any third parties involved.
- Track business interruption: Record lost sales/gross profit and extra costs (temporary premises, overtime) from the date of the event.
- If a claim is disputed: You can access free, independent dispute resolution via the Australian Financial Complaints Authority (AFCA).
Smart ways to save on premiums without cutting cover
You don’t need to strip protection to trim costs. The biggest wins come from shaping cover to your real risks, avoiding overlaps, and proving you’re a lower‑risk bet. Here’s how to keep business insurance competitive without compromising the safety net.
- Bundle smart: Business insurance packs tailored to your trade can be cheaper than separate policies.
- Right‑size limits: Use current replacement costs and a realistic indemnity period; avoid both gaps and over‑insuring.
- Compare like‑for‑like: Use a licensed broker to line up identical limits, sub‑limits and exclusions.
- Avoid overlaps: Align electronic equipment, portable/general property and transit so they complement, not duplicate.
- Use preferred repairers: Networks can speed repairs and may include excess discounts.
- Review annually: Update sums insured and covers as turnover, stock and equipment change.
- Protect your claims record: Strong risk controls and fast incident management help minimise claim frequency and future pricing pressure.
Where to compare policies and get advice
To compare business insurance confidently, start with a licensed insurance broker who can line up like‑for‑like quotes, explain exclusions and tailor cover to your risks. If you prefer to go direct, make sure the insurer is authorised, the adviser is licensed, and confirm any compulsory schemes with your state or industry body.
- Licensed insurance broker: By law they represent your interests and can package covers.
- Authorised general insurer: Check they’re on the APRA register before buying.
- Broker/adviser licence: Verify on ASIC’s Professional Register.
- Workers’ compensation: Set up via your state/territory regulator.
- Industry/professional association: Many offer PI or group insurance schemes.
Key takeaways and next steps
Business insurance is a modular safety net: meet compulsory covers (workers’ compensation and CTP), then tailor liability, property, interruption, cyber, transit and motor to your real exposures. Choose limits based on replacement costs and realistic recovery time, read definitions (like flood) closely, and review annually so growth doesn’t leave you underinsured.
- Know your legal must‑haves: Workers’ comp, CTP, and any mandated liability/PI.
- Build to your risks: Add liability, property, BI, cyber, motor and transit as needed.
- Set the right limits: Replacement costs and a suitable indemnity period.
- Watch exclusions: Flood/inundation, theft conditions, and policy triggers.
- Stay contract‑ready: Keep certificates current; document losses fast.
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