Protecting Your People and Your Business
Hiring your first staff member is a big step. It not only changes how your business runs, but it also changes the risks you face. Once you have employees, you are responsible for their safety, their pay and how they are treated at work. That shifts the focus from just protecting your own income and assets to protecting a whole team.
Many business owners keep the same basic insurance package they started with and hope it will cover anything that comes up with staff. Often it does not. Issues like workplace injuries, bullying or harassment claims, or even employee theft can fall into gaps between your policies. That is where your problems start, especially when you thought you were covered.
In this article, we take you through the main types of insurance to review when you employ people, how they fit together and what to compare. We also explain how an experienced insurance broker can help you tailor your cover to your business, size and growth plans, removing the guesswork.
What Changes When You Become an Employer
When you move from sole operator to employer, the law starts to look at you very differently. You take on new duties under Work Health and Safety, Fair Work, Payroll and Superannuation legislation. If something goes wrong, you can face penalties, fines or prosecution, even if you did not intend to do anything wrong.
Your risk changes in various ways:
- Higher chance of workplace injuries
- More HR issues such as performance or termination
- Increased reputational risk if a workplace issue becomes public
- Extra cyber exposure as more people have access to your systems and data
It is not just about accidents in the workplace or on a worksite. A simple administration mistake, a poorly worded email, or a badly handled complaint can trigger serious problems.
The start of a new financial year is a good time to sit down with your insurance broker, review your insurance and check that your policies still match what your business does and your people actually do each day.
Key Covers Every Business Should Review
For most employers, there are three key coverages to review closely once you have staff.
Workers Compensation is compulsory in Australia, with different legislation set by each state and territory, so what applies in one state may not apply in another.
Premiums are usually based on:
- Your industry and risk category
- Total wages paid to your staff
- Your claims history
Ensuring your wage declarations are completed correctly is very important. If you underestimate your payroll, you can face sizeable adjustments and in Victoria, possibly fines as well.
Having a procedure for timely reporting of injuries can make a real difference to the outcome for your employees and consequently your business as well.
Public and Products Liability is usually included in your business insurance policy. It is there to respond if a member of the public or a customer is injured or suffers damage because of your work. It does not cover workers compensation but instead covers things like:
- Your employees while visiting customer sites
- Customers visiting your premises
Management Liability is often where HR-related risks sit. These policies can respond to:
- Allegations of wrongful dismissal or unfair treatment
- Claims of bullying, harassment or discrimination
- Certain alleged breaches of workplace or employment rules
These types of claims can be stressful, time-consuming and expensive to manage. Once you have employees, it is very important to have this cover.
The key is to look at all these covers together. Workers Compensation, Business Insurance Public and Products Liability and Management Liability should be tailored by your insurance broker to form an integrated program. If they are set up in isolation, it can result in gaps or double insurance that can result in disputes as to which policy should respond, at the worst possible time.
Specialised Cover for your Business
As your team grows, the risks linked to how your staff work also grows. Modern work patterns like hybrid work, remote access and the cloud, add new risks for you to think about.
Professional Indemnity Insurance becomes very important when you and/or your employees, give advice, provide designs, consulting or technical services that your customers rely on. Any small error can result in a claim if a customer says they suffered loss after following that advice or design. This cover is strongly recommended.
Cyber Insurance is now a key part of your insurance program as employees are often the weakest link in security as people may:
- Click on phishing emails
- Reuse weak passwords
- Lose laptops or mobile phones
- Send sensitive data to the wrong person
If an attack occurs, Cyber Insurance provides incident response, data restoration and regulatory notifications if personal data is involved. It is especially important as you introduce new software, remote working tools or online platforms.
Business Interruption
A fire can hit your cash flow hard. Tailored Business Interruption insurance provides help with:
- Providing income to keep your business trading
- Covering the costs of paying wages and fixed expenses while your business is not operating
- Covering extra costs such as renting temporary new premises
- Buying time to recruit or reshuffle roles
Key Person Insurance
The loss of a key employee can damage your business. Key Person insurance is designed to protect businesses in the event that a key person dies or becomes unable to work.
As you set budgets and plan technology and hiring for the new financial year, it makes sense to include these covers in the discussion with your insurance broker.
Comparing Policies: What to Look for and Ask
Comparing insurance is about more than finding the lowest premium. The detail in the policy wording matters.
You should start by reviewing the policy limits, sub-limits, and the main coverage definitions:
- Are all your entities listed on each policy?
- Are your business activities fully defined on each policy?
- Are the limits high enough for the requirements set out in the contracts from your customers?
- Are there sub-limits for things like use of contractors, subcontractors and labour hire?
- Does the geographic scope match where your employees work?
- What cover and limits are provided for Workplace Health and Safety, Harassment and Bullying?
- For Professional Indemnity, what is the Retroactive Date?
Next, take a close look at the conditions and exclusions. Common exclusions can include:
- Certain labour hire or contractor arrangements
- Known or ongoing disputes at the time you take out the policy
- Intentional or dishonest acts
This is where many surprises sit. Asking questions before renewal is far better than finding out during a claim that a key risk was excluded.
Claims handling and support are also very important. When an employee is injured or a complaint is made, you want a clear process, fair timeframes and simple documentation steps.
A good insurance broker will:
- Help you understand what is and is not covered
- Guide you through the process of what the insurer needs
- Advocate for you if there are questions or disputes
At Interlink Insurance Brokers, we place a lot of value in helping our Clients understand their policies, comparing options and providing a tailored program to suit their specific insurance requirements based on their business.
Building a Tailored Insurance Plan for Your Business
Putting everything together into a tailored program, makes things far easier to manage. This would be achieved by:
- Ensuring all your Entities are listed on your policies
- Defining all your business activities
- Confirm the number of employees you have and their roles
- Updating estimated wage roll for each state or territory that you operate in
- Review each policy and what risks it covers
- Identify any uninsured exposures
- Identify any changes you expect to your business in the next 12 months
Working with a specialist broker like Interlink Insurance Brokers, brings your HR, Finance and Workplace Health and Safety planning together. We can help you design a tailored insurance program, review claims trends and build simple risk management steps into everyday work.
The aim is to protect both business and your people, so you can focus on growing your business with confidence.
Protect Your Business and Your Employees with Tailored Coverage
If you are ready to put the right protection in place for your business and your employees, we can help you design insurancethat aligns with your risks, obligations and your budget. At Interlink Insurance Brokers we work with you to clarify what cover you and your employees really need, then negotiate with Insurers on your behalf. Talk to us today to review the insurance you already have and to close any gaps. If you would like to discuss specific scenarios or request a quote, please contact us.
