What insurance do you need for your new small business?

The below is a guest post and the information provide should not be taken as advice. It is purely for entertainment and informative purposes on a specific topic.

SMART Business Insurance is in daily contact with small business owners about protecting their business assets and business income.

Traditionally small business owners focus on Public and products Liability as the first policy they purchase, providing protection against law suits and to enable them to trade as many of their clients require them to provide it.

In recent times, the exception is professional and advice businesses who purchase professional indemnity insurance as a priority to provide protection against law suits for claims of poor or negligent advice and to enable them to trade as this form of insurance is mandatory for some professions.

The next most popular insurance policy for many small businesses purchase is business property insurance by packaging it with public liability in a Business Pack (Biz Pack.)

Some more established businesses will add business interruption/loss of earnings as part of the package and have separate cyber insurance, directors and officers /management liability insurance policies.

Due to government privacy legislation to come in force in March 2014 there is strong reason to believe that cyber insurance will become a non-discretionary spend for firms that deal with data(anyone that interacts online) in the next few years.

Cyber Security as a business risk to online businesses

Before the introduction in March 2014 of new privacy laws that carry tough new penalties for data breaches online businesses that store client data need to start looking at their cyber risk management processes and also consider taking out some form of Cyber cover.

SMART Business Insurance recommend that online businesses begin the process of reviewing existing procedures and policies in order to ensure compliance with the new amended privacy law well before March 2014.

The new Privacy Act will carry data-breach fines of $1.7 million for companies or $340,000 for individuals, further the Privacy Commissioner, has stated that he will not shy away from accepting enforceable undertakings and seeking civil penalties in the appropriate cases.

Businesses with greatest cyber risk

  • e-commerce business websites
  • Credit card data collection and online processing
  • Data storage (online and traditional shipping of records or back up systems0
  • House private customer data on laptops
  • Business partners, consultants that touch customer sensitive data
  • Provide online content
  • Cloud computing and outsourced computing

Cyber threats

  • Hacking (with access to private data)
  • Denial of service attacks (against a network or the cloud the company leases)
  • Information extortion
  • Employee or partner mistakes
  • Software glitches
  • Outright privacy policy violations
  • Lost or stolen laptops
  • Rogue insiders or consultants
  • Improper disposal of paper records
  • Lost or stolen back ups

So to summarise the key insurances to consider for your new small business.

1.public and products liability pack

3.commercial property insurance


-if you provide advice: professional indemnity

-if you handle data : cyber insurance

Other policies to consider:

-business interruption

-commercial motor insurance

Please note the above information is general information and does not take into account your circumstances.

For more information contact small business insurance specialist SMART Business Insurance on 1300 542 573 or visit

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