Small business insurance 101: things you need to know

Insurance can seem like a complex area, which is why it’s so important to understand the basics. Here, we explore some of the fundamental concepts that underpin most business insurance policies.

An insurance policy has a number of different parts, explains ARMA Insurance Brokers CQ Director Tony Noyes.

“The policy will set out the cover that applies under the policies, the conditions you must comply with and any exclusions. Almost every policy will include these features,” he says.


“The business interruption section of the policy will also include information about indemnity periods”


Scope of cover

The first section will typically explain the policy’s scope to protect the business against loss or damage to the building in which it operates and its contents or stock. This part of the policy may include information about the policy’s conditions, such a requirement to have fire extinguishers and burglar alarms that are switched on when the premises are vacant.

The business interruption section of the policy will also include information about indemnity periods. This is the length of time the insurer will make up the loss of profit or revenue as a result of an insured event such as a fire, storm or earthquake.

The indemnity period’s time span will depend on the nature of the business being insured and the value of the cover versus the price of the premium.

For instance, if the policyholder requires a specialised piece of equipment to trade, the indemnity period should consider how long it will take to replace the equipment if it’s destroyed, taking into account any time needed for it to be imported if it’s made overseas. When working out the indemnity period, take into account how long it may take for income to reach pre-loss levels.

To find out how you can make you business insurance policy work best for you contact ARMA Insurance Brokers CQ by emailing tony.noyes@armainsurance.com.au or phone (07) 49 787 261

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