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The Essential Guide to

Small BusinessInsurance



The Essential Guide to

Small Business Insurance Contents

Chapter 1 Protecting small business 3

Chapter 2 Basic business insurance 6

Chapter 3 Retailers 8

Chapter 4 Trades and services 10

Chapter 5 Professional and ofce-based 12

Chapter 6 Hospitality and property owners 14

Chapter 7 Manufacturing and wholesale 16

Chapter 8 Be prepared 18

Chapter 9 Explaining the jargon 20

Important information

Essential Guide to request only 1300 763 437

General Editorial enquiries [email protected]

The Essential Guide to Small Business Insurance is published and distributed by The Age Company Limited,the publisher of The Age, and John Fairfax Publications Pty Ltd, the publisher of The Sydney Morning Herald.It is intended to provide general information of an educational nature only. Any information containedin this guide does not have regard to the investment objectives, nancial situation or individual needsof the reader. Neither The Age Company Limited, John Fairfax Publications Pty Ltd, nor the sponsor,Allianz Australia Insurance Limited, ABN 15 000 122 850, intend by t his guide to provide any nancialproduct advice and information in the guide cannot be relied upon as such. All readers should considerobtaining independent advice before making any nancial decisions concerning small business insuranceor any other investment product.

To have The Sydney Morning Herald home delivered phone (02) 9282 3800

The data provided is correct at the date of printing, July 2008.



Calculating the cost of disaster

Imagine your business had to close or one week due to a serious event such as a ood or fre.

• List the fxed costs you would have to pay – such as rent, wages and loan repayments

– even i your business was orced to close.

• Estimate how much it would cost to replace stock, building fttings and equipment that

might be damaged.

• Estimate the proft lost or one week’s closure.

• Estimate how much it would cost i a percentage o your customers took their business

permanently elsewhere.

Add the our fgures together to see the total cost o a week’s closure and rebuilding

your business.

Australia’s small business sector is a crucial

part o our country’s economy and society.

According to the Australian Bureau o

Statistics (ABS), small businesses account or

90 per cent o the private sector and employ

50 per cent o the workorce.

And yet small-business owners are oten

so time-poor and ocused on building and

running their venture that something as

important as insurance can be overlooked.

Business insurance is a way o ensuring that

i something goes wrong you don’t pick upthe whole bill.

The Insurance Council o Australia estimates

that 200,000 small businesses have no cover,

and the picture or these businesses should

they experience an unexpected disaster is

very bleak.

According to the council, 70 per cent o

businesses with no insurance that are hit by a

serious loss such as a fre close within a year.

See the box below in order to calculate how

much an unforeseen incident such as re or ood could cost your business.

1 Protecting small businessFinding the right insurance for your business can seem like hard work.

Whether you have just started a business, have yet to organise insurance

or are thinking of renewing your coverage, the range of choices can seem

overwhelming.

The Essential Guide to Small Business Insurance helps explain the

choices available and how to nd the insurance that is right for you and

your business.

Introduction



UnderinsuranceNot having the right insurance is a big risk or

any small business.

The ABS says that 0 per cent o small

businesses are underinsured. This means

that i something happens and a claim is

made, the insurance policy payout would not

cover the ull cost o getting the business back

on track.

Owners are oten unwittingly underinsured

because they don’t update their policies as

the business grows. They may have newequipment and machinery that hasn’t been

included in the original policy.

Another common problem is ailing to

increase a property’s value. It is not unusual

or business owners to keep the same value

on the policy rom one year to the next, yet

the cost o rebuilding ater an incident can be

substantially higher.

Some insurance companies have online

web calculators to help you work out how

much rebuilding will cost. Or you can pay

a licensed builder or quantity surveyor to

calculate the cost.

Other costs, such as replacing fttings, can

sometimes rise sharply when, or example,

world prices o products such as stainless

steel go up.

Home businessesFor the sole operator working rom home,

insurance is oten low on the list o priorities.

Sometimes the owners presume they

are automatically covered by their home

insurance, but that is not always the case.

Inorming your home insurer that you are

running a business rom domestic premisesis vital: i you don’t and there is a claim, it

could be rejected.

Keeping other insurers inthe loopIt is important to discuss your home business

with your home insurer. While most small

home-based operations won’t aect your

home policy, i there are increased risks, or

example fre, then the company may wish to

change the premium. It is also a good idea

to speak to your car insurer to make sure you

have the right cover to use your vehicle as

part o the business.



7

Property insuranceIt may be a condition o your business loan

to have property insurance. It is an insurance

ew businesses can aord to ignore. It will

cover you or damage to your business

property and its contents and any stock. It

also covers goods that belong to customers.

The type o events covered can vary between

insurers, but under a “fre and perils” policy,

or example, they typically include events such

as fre, storms, malicious damage, explosions

and earthquakes.

Business typesFor insurance purposes, small businesses

are usually divided into sectors. Some o

these include: retailers, trades and services,

proessional and ofce-based industries,

hospitality, property owners, manuacturing

and wholesale.

Risk managementGood insurance cover is only one part o

protecting your business. It is also important

to reduce the risk o loss or damage. A risk

assessment looking at all aspects o your

business and identiying potential areas o

risk can be a good frst step. WorkCover oers

a range o services to help small-business

owners reduce the risk to workers and their

business. It also oers inormation tailored to

individual industries.

Who is a worker?Under workers’ compensation law, a worker is

anyone who receives wages or commission.The number o hours worked is not a actor.

Depending on the individual circumstances,

some people who work as contractors are also

viewed as workers. For more inormation or

an individual ruling contact WorkCover in

your state or visit their website (see opposite

page or web details).

At frst glance, business insurance can seem

complex with dierent policies oering

dierent cover. Once you understand what

each type o policy covers, however, choosingthe right insurance or your business becomes

much easier.

To help business owners, many insurance

companies oer basic packages, with a range

o risks all covered under one policy through

one contact point. You can oten also add

extra cover you may need.

Following are several types of insurance that

many small businesses may need. In later

chapters we examine those particularly useful for

specic businesses.

Workers’ compensationLegislation in every state in Australia means

that any business owner who employs

another person must have a current workers’

compensation policy. This is mandatory and

provides medical and fnancial support to

workers who are injured through their work.

The premium each business pays is

calculated using a range o actors including

the wages paid each year and the type o

industry you work in.

Employers who don’t have workers’

compensation can ace heavy penalties

including imprisonment.

To fnd an insurer, visit your state WorkCover

website (www.workcover.nsw.gov.au/, www.

workcover.vic.gov.au/), which lists the

insurance companies that can oer workers’

compensation in that state. The price o

insurance may not vary as there are setindustry classifcations. However, the way

each company operates will be dierent and

worth comparing to fnd what is right or you

and your business.

Public and products liability

This insurance covers a business i it is ound

to be legally liable to pay compensation or

personal injury or damage to other people’s

property as a result o your business activities

or products. Even i you are not ound liable,

fghting a property or personal injury claim

can be very expensive, so it is still important

to be covered.

Business interruption

This type o insurance is oten overlookedby small-business owners. It covers the drop

in your business income when something

goes wrong and aects the running o your

business, such as a fre or ood or other

major incident. Just because you can’t trade

doesn’t mean your fxed costs go away.

Similarly, customer expectations o supplies

and services don’t stop when you have a

business crisis. Dierent insurers state

the kind o “interruption” or event they will

insure against and the costs they will cover.

2 Basic business insurance



9

SecurityThere is good retail security advice on the

Australian Federal Police website at: www.ap.

gov.au/business/businesses/robbery_and_

thet/shopliting_prevention.html.

Here are a few of the tips:

• Always acknowledge your customers.

• Always ace your customers even when on

the phone.

• Empty your cash drawer regularly so it is not

always holding large amounts o money.

• Move your most expensive and attractive

merchandise away rom your door or shop

corners.

• Watch out or shoppers who don’t seem to

have a deliberate purpose to buy anything.

The AFP also warns shop owners to be aware

of tricks that teams use to cause a distraction

while an accomplice steals items. These include

a couple ghting, a customer faking illness or

dropping their money.

Case study

When Dominic Deraco opened his orist business, Big on Flowers, 1 months ago, he

immediately took out business insurance. “I have cover in case something happens,” he says.

“Someone could break in or smash my windows or one o my rerigerators could break down,

and i I didn’t realise it could heat up and kill my owers.”

Insurance, he says, gives him “peace o mind”, and he sees the alternative o having no

insurance as too much o a risk. “I I didn’t have insurance and something went wrong, then I

would have to oot the bill, which could be huge, and I can’t aord that.”

The retail industry is one o Australia’s

biggest employers and covers a vast and

diverse range o businesses, rom cake shops

to orists, sporting goods stores and clothing

shops. Every retailer is unique, and it is

important to fnd the insurance that best suits

your business. Following are some types o

insurance you may want to consider.

Glass

For many retailers, broken glass is oten not

just an inconvenience, but a major issue o security. Dierent insurers oer a range o

options, but usually you can opt or cover

or fxed internal or external glass or both.

It is important to establish whether your

insurer will oer adequate temporary security

measures i the glass can’t be replaced

immediately.

Money

Retailers spend their day handling dierent

types o money, including cheques, credit

cards and cash. Insurance companies

usually oer dierent types o cover or a

combination. These may include insurance

that applies or business hours only or when

money is in a sae, in transit (being taken to

the bank) or held at your home.


With this insurance, as a retailer you are

covered i you are ound liable to pay

compensation or a personal injury or

damage to someone else’s property arising

rom your business. Typically, this might

involve a customer injuring themselves on

your premises. However, you would also be

covered in the event that injury or property

damage is caused away rom your premises.

PropertyThis will cover against damage to equipment

and stock as well as damage to your building.

There are two types o property insurance:

fre and perils and material damage. Check

which one is right or your business.

It is also important to establish what level

o accidental damage cover comes with your

policy. The cost o cleaning up and removing

debris ater an event such as fre can be

substantial. Again, your insurer will be able to

tell you whether those benefts are included in

your policy or i you need additional cover.

You may also want to consider business

interruption insurance (see chapter 2).

I you have employees, you will need

workers’ compensation cover (see chapter 2).

3 Retailers



0 11

Dial Before You Dig

Phone 1100

Any business that intends to excavate

should reer to the national Dial Beore You

Dig service. It supplies inormation about

any underground cables or pipes in the

proposed excavation area. This service not

only protects the pipes and cables that supply

essential services such as gas, electricity and

communications, but it also protects lives.

The service will also supply inormation onhow to dig saely and careully. You can also

lodge a request, ree, 2 hours a day at www.

dialbeoreyoudig.com.au.

Tool securityThe Master Builders Association warns that

tools are a very tempting target or thieves.

Its advice is to always keep your tools where

you can see them. I you can’t park on the

premises o a job, then never leave the back

o your vehicle open because it is an invitation

to thieves.

The MBA points out that many policies oer

cover only or orced entry, so i a vehicle’s

door is let open you might not be covered.

Ater hours, i you have tools in a vehicle youshould park it o the street in a locked garage.

Likewise, tools let onsite should always be in

a secure lock-up.

The trades and services sector is ull o

one-person businesses such as carpenters,

locksmiths and gardeners.

Figures rom the Department o Education,

Employment and Workplace Relations show

that 15 per cent o workers in the trades and

services sector are sel-employed, which is

more than any other type o business.

However, just because a business is small

doesn’t mean it can aord to not have

insurance.

The type o insurance depends on the

business. Following are some to consider.

General propertyIt is common in the trades and services sector

to be on the move during your working day.

It is important to have insurance cover that

looks ater everything you carry with you.

This typically includes laptops, personal

digital assistants (PDAs), BlackBerrys, mobile

phones and any tools that you may need to

conduct your business.

Liability coverThis covers claims brought against you or

personal injury or damage to other people’s

property due to your business. This is not an

issue o proessionalism. Sometimes things

happen through sheer bad luck, but i it

involves your business then you may still be

liable. Check with your insurer to see i your

liability insurance covers customers’ goods

and equipment while they are in your care,

and i you need extra cover.

Personal accident and illness

When something unexpected happens,

say an accident or you all ill, it can have

a devastating eect on a business. This

insurance covers income that is lost ollowing

an illness or accident. Payment is usually in

a lump sum or weekly, with the amount paid

depending on the type o injury or illness

sustained.

Business vehicles

When choosing vehicle cover, you will be

asked whether you want “agreed” or “market”

value cover. With “agreed value” the ownerand insurer agree how much it is worth, and

i a claim is made then the amount paid out

remains the same, regardless o the age o

the vehicle. I you opt or a “market value”

then any payout would take into account

depreciation. Check to see i your policy

includes a hire car while your vehicle is o the

road – or i you need extra cover.

As with any business, i you have employees

you must also have workers’ compensation

(see chapter 2).

4 Trades and services



1

• Never give personal or bank details to a caller

without being certain o their identity. Ask or

a number to call back and check the White

Pages or the charity, business or government

department they claim to represent.

• Beware o online scams, which are on the

rise. An example is “phishing”, where a

raudulent email asks you to update bank or

credit card details.

• Check invoices careully. With “alse billing”

you receive an invoice or, say, advertisingyou didn’t order or one or common ofce

goods such as toner or paper. The raudster

hopes you will pay the invoice automatically

without looking closely at the details or the

company name.

To download a ree booklet, go to: www.accc.

gov.au/content/index.phtml/itemId/0592.

Ofce security tips

• All computers should have frewalls and

virus protection should be kept up to date.

• Regularly back-up computer fles and store

them o-site along with copies o business

records and databases.

• Set up and maintain a central register or all

keys or cars, storage and the ofce.

• Keep fre equipment including extinguishers

and alarms in good working order. Train sta

to use the equipment.

• Devise an evacuation plan and hold regular

fre drills.

• Always check reerences when hiring sta

to ensure they have the qualifcations they

claim.

• Stop ofce pilering by keeping expensive

supplies such as batteries and mobile

phones locked up.

A wide selection o small businesses carry

out their work in an ofce environment, or

example, legal proessionals, engineers,

architects and management consultants.

Some insurers have product packages that

are specifcally designed to cover ofce-based

businesses, with the option to add cover later.

The type o insurance you need will depend

on your business. Following are some to

consider.

Property coverThis covers your ofce building as well as its

contents, such as artwork, carpets, urniture

and computers. I you have a business loan,

it may be a condition that you have this

insurance. It is important to discuss with your

insurer what risks you are covered or and

what extra benefts you have or might need.

General propertyWhile your business might be ofce-based,

there could be times when you or your sta

work away rom the premises. This insurance

covers valuables such as mobile phones and

laptops when you are away rom the ofce.

TheftThis covers your ofce contents, such as

computer equipment, in the event o thet.Check with your insurer to see i it includes

replacing records, whether they are written,

printed documents or on a computer. You

might also need cover or designs and plans

that are part o your business. It is also worth

asking your insurer i they will provide a thet

cover where orced entry is not a requirement.

This means, or example, that i someone

walks into your ofce and removes equipment

then you will be covered even i there was no

orced entry.

Professional indemnityThis covers proessionals such as doctors,

lawyers and IT specialists, people who

oer advice or a service who can be held

accountable i an error is made. It is oten a

legal requirement or proessionals to have

indemnity, also known as proessional liability,

in order to practise.

Some proessionals can choose their

own insurance providers, but others such

as lawyers must buy insurance rom their

proessional body. In NSW, lawyers are

covered by LawCover, which is owned by

The Law Society.

As always, i you employ sta then workers’

compensation is compulsory. Ofce-based

businesses may also require cover or

business interruption (see chapter 2), public

and products liability (see chapter ), money

(see chapter ) and glass (see chapter ).

ScamsThe Australian Competition and Consumer

Commission says small businesses are oten

targeted by scams because they are busy and

are likely to divulge sensitive inormation too

easily. Here is some o its advice.

5 Professional and ofce-based



15

Tip If there are certain times of the year when

you hold more stock than others, for example

Christmas and Easter, you should discuss

it with your insurer to make sure you have

adequate cover. Check to see if your policy

includes an automatic increase in the level

of cover provided during these key trading

periods.

Property OwnersSome insurers package dierent insurance

options into one policy or property owners,

while others oer you a range o policies to

choose rom. Following are some to consider.

Property owners’ liability

Landlords who rent out their investment

properties must by law have property owners’

liability cover. This is similar to public liability

cover and provides protection in the event

that you are deemed liable or causing injury

that occurred on a property owned by you.

Generally, there is a fxed limit that can vary

between insurers.

Business interruption

Some insurers oer protection against loss

o rent receivable as a result o the property

being made uninhabitable by a defned event

such as a fre.

Fire and perilsThis covers your building and contents or

loss or damage through fre or other incidents

listed as defned events.

Tip

Some property owners mistakenly believe

their tenants’ policies cover the property or,

if it is a home unit, that it is covered by the

strata insurance. Your insurer should be able

to tell you if you are covered – or how to

nd out.

Case study

Rachel Billington’s Neat Eats catering business began at home. Having worked in the

hospitality sector or many years, she was well aware o the risks she might ace so she took

out business insurance.

“When I started using other people’s premises, I realised the bigger you become the more

exposure to risk you have,” she says. “The more people I service, the more likely it becomes

that someone will make a claim against me.”

One o her colleagues was taken to court ater serving chicken that allegedly caused illness.

Rachel says: “I I didn’t have insurance and that happened to me, I would lose everything: my

business, my livelihood and maybe my home.”

HospitalityHospitality is flled with small businesses,

and many caes and restaurants are amily-

run making it all the more important to

have the right insurance, as well as good

product control and risk management. The

type o insurance you need depends on your

business. Following are some you might want

to consider.

Fire and perils

Fire is a major risk or cae and restaurantowners. This insurance covers your building

and contents or loss or damage through fre

or other incidents listed as defned events.

Machinery breakdownIn hospitality, equipment such as cash

registers, ovens, microwaves and coee

machines are vital. This insurance covers the

cost o repairing or replacing machinery or

electronic items that break down. It may also

provide cover or temporary equipment hire

and reight costs. As part o the settlement

o a claim, the age o the item may be taken

into account, which could aect the fnal

payout.

Glass

As well as covering fxed glass, which can

be either outside or inside only or both, this

also usually covers illuminated signs. Glass

insurance might also cover doors, mirrors

and the porcelain parts o toilets.


With this you are covered should your

business become legally liable or

compensation, e.g. i there is an accident onyour premises or illness due to a product that

you have supplied. Even i you did not make

the product yoursel, but served it, you might

fnd yoursel liable. The amount o cover you

need depends on how large your business is

and whether you use premises that demand

a set minimum o insurance cover, such as

government or council properties.

Like other businesses, i you employ sta

you must have workers’ compensation. Other

cover you might consider includes business

interruption (see chapter 2) and business

vehicle insurance (see chapter ).

6 Hospitality and property owners



17

Safety tips

• Create and implement a quality-control plan

or all your products.

• Ensure all employees are ully qualifed and

trained in their feld.

• Have a dedicated area or handling and

storing toxic substances.

• Limit the storage o ammable liquids, such

as petrol, white spirits, acetone and solvent-

based paints.

• Keep your premises tidy, sweep oors and

remove waste regularly both inside and

outside.

Exporting

As businesses grow, they may look to export,

and it is important to weigh up the liability

issues. I you export to a highly litigious

country such as the United States, there is

likely to be an increase in the requency

and the cost o liability claims. For this reason

most standard liability policies do not

provide cover or products exported to the US

or Canada.

WholesaleWith the growth o the internet has come

a rise in the number o small wholesale

businesses, many o them home-based. But,

while business may take place in the virtual

world, there are still real risks that owners

need to protect themselves rom every day.

The type o insurance you need depends

on your business. Following are some to

consider.


Some wholesalers mistakenly believe that

because they did not make a product they

are not legally liable. That is oten not the

case. For example, when goods are imported

it is crucial or the wholesaler to understand

their liability. According to the Australian

Competition and Consumer Commission, i

a wholesaler imports a product, they should

assume liability. It is also the wholesaler’s

responsibility to make sure all appropriate

saety standards are met and that the product

is ft to be used. It is a good idea to get legal

advice beore importing goods.

Fire and perils

This insurance covers the building, contents

and stock as well as your customers’ goods.

It applies when there is a fre or one o a

number o other defned events listed in the

policy, including accidental damage. I, like

many businesses, you have more stock at

certain times such as Christmas and Easter, it

is important to speak to your insurer to make

sure you have sufcient cover.

Manufacturing Manuacturers oten use potentially dangerous

machines or hazardous substances. It is

important to have a sae working environment

as well as the right insurance.

The Australian Industry Group estimates

that 20 per cent o the manuacturing sector’s

output is now accounted or by the ood

industry. As with the hospitality industry,

good risk management and product controls

can help reduce a business’s exposure. The

type o insurance you need depends on your

business. Following are some to consider.

Fire and perilsThe risks manuacturers ace are very dierent

to many other businesses, and the nature

o manuacturing makes fre and perils

insurance vital. This will cover your building

and contents or loss or damage through fre

or other incidents listed as defned events.

TheftThis typically covers not only your machines

and manuacturing equipment, but also your

stock in the case o a orced entry to your

premises. It is important to speak to your

insurer about what kind o security is required

under your policy.

Public and products liabilityThis is a vital orm o insurance or

manuacturers. It will cover the cost should

your business become legally liable to pay

compensation to someone who is injured

or whose property is damaged as a result o

your business.

Machinery breakdownMachines are the backbone o manuacturing,

and typically this insurance covers the cost

o replacing or fxing machinery. It may alsocover the expense o hiring a machine while

the broken one is repaired. As part o the

settlement o a claim, the age o the item

might be taken into account, which could

aect the fnal amount paid.

As always, i you have employees you must

have workers’ compensation cover (see

chapter 2). You may also want to consider

business interruption (see chapter 2),

personal accident and sickness (see chapter

) and general property (see chapter ) cover.

7 Manufacturing and wholesale



19

Reducing your premium

• Consider increasing your excess. In the

event o a claim, you will pay more beore

the insurer pays out, but the premium will

be cheaper.

• Pick an insurer who doesn’t charge an

additional ee or the right to pay monthly.

• Discuss installing fre alarms and sprinklers,

burglar alarms, deadlocks and other security

measures that could cut your premium.

• Your insurer will be able to tell you i there

are any other ways that you can reduce your

risk and your premium.

Questions to ask yourself

When you have ound your insurer and

chosen your policy, ask yoursel some basic

questions.

• Have you read the product disclosure

document (PDS)? These documents can

be o-putting, but increasingly they are

written in easy-to-understand language. It

is important or your business that you take

time to read it beore you sign anything.

• Is there anything you don’t understand?

You are not an insurance expert and so it is

not surprising i there are things you don’t

understand. When it comes to protecting

your business, there is no such thing as a

stupid question. Don’t be araid to ask i you

are conused. I you can’t fnd the answers

you need, then perhaps another insurer will

be more helpul.

Finding the right insurer is not just a question

o the cheapest quote. It is important to

fnd an insurer who will work with you andunderstand your specifc business needs.

The cheapest quote may not give you all

the coverage you need or may come rom a

company with limited expertise or reduced

fnancial stability. It may also suit you to

choose a company that packages its policies

and allows you to add others as your business

or risks change.

Questions the insurer will ask you

Here is a checklist o inormation you will

need to provide an insurer when asking or a

quote.

• Contact details.

• Start date. When you speak to an insurer, it

is standard within the industry to have up

to 90 days to take the quote out. However,

you may fnd the price you are quoted is only

guaranteed or 0 days. Check the fnal price

beore signing anything.

• Australian Business Number. I you are a

new business, you can register or an

ABN at the Australian Business Register

(www.abr.gov.au).

• GST. You will be asked i you are registered

or GST and any related tax input credits.

• Claim history. This usually covers the last

three years. It is important to be honest

about any claims, as supplying alseinormation can invalidate a policy.

• Location. Where your business is based and

in how many locations.

• Seasonal increases. Let your insurer know

i your business has seasonal uctuations

in stock. The percentage increase in cover

can vary between insurers so it is worth

shopping around.

• To establish the level o risk, the insurer is

also likely to ask a range o questions about

your business, such as the turnover, number

o employees, how it is run and the kind o

property you use. You may also be asked

about your security, such as alarms and

locks, and what controls you have in place

or the handling o money and to protect yourom employee dishonesty.

Questions to ask the insurer

• Does the insurer have national coverage or

are they only in one state?

• Can you pay your premium by the month or

only annually in one lump sum?

• Is it possible to package all the policies

into one contract and can you add other

policies later?

8 Be prepared



0

Here are a ew terms you are likely to come

across when taking out business insurance.

Cooling-off period Ater you have taken out

insurance, there is a “cooling-o” period

when you can change your mind and cancel

your policy without penalty. This may

vary between insurers, but the statutory

minimum is 1 days. I you do decide to

cancel, then you must inorm your insurer

by letter, email or ax.

Duty of disclosure The person taking out

insurance must tell the insurer everything

that is relevant to the insurer and that they

know to be relevant. Failing to tell your

insurer something important may invalidate

your policy.

Due date This is the date when a policy runs

until or is valid until. It is also the date by

which you must pay a premium i you want

to renew the policy.

Excess This is sometimes also called a

“deductible”. It is the amount that the policy

holder has to contribute towards any claim.

The smaller the excess, the less the policy

holder pays, but the premium may be higher.

Lapsed policy An insurer has the right to halt

its cover i the payment o premiums ends.

Any claim made when a policy is lapsed is

normally not paid out.

PDS The Product Disclosure Statement

contains important inormation about your

policy. It explains what is and what is not

covered, as well as listing any additional

cover options you may have. It will also layout all ees and charges as well as explaining

what is required o the person taking out the

policy. You should not sign any agreement

without reading the PDS.

Schedule This document contains inormation

specifc to you, including premiums,

excesses and sums insured. It should be

read in conjunction with the PDS.

Sum insured The policy holder nominates the

sum insured, and under this agreement the

insurer will pay costs up to that fgure.

9 Explaining the jargon

Insurance is underwritten by Allianz Australia Insurance Limited ABN 15 000

122 850, AFSL Licence No. 234708. 2 Market Street, Sydney NSW 2000.

Call us on 13 1000 for a Product Disclosure Statement to help you decide if

Allianz insurance is right for you.

Insurance solutions from A – Z

Setting up your business insuranceshould be easy! Take the hassle out of insuring your business, talk to Allianz.

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If you own a small business, you’re probably so busythe last thing you feel like doing is making sure youhave the right insurance cover in place.

With Allianz it’s quick and easy to set up your

business insurance.To help your business stay in business,call 13 1000 today or visit allianz.com.au.

Insurance is underwritten by Allianz Australia Insurance Limited ABN 15 000

122 850, AFSL Licence No. 234708. 2 Market Street, Sydney NSW 2000.

Call us on 13 1000 for a Product Disclosure Statement to help you decide if

Allianz insurance is right for you

Help insure yoursmall business staysin business.

Insurance solutions from A – Z

smh essential guide to sml biz insurance

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