Small business owners and startup entrepreneurs are taking unnecessary risks if they believe a number of myths about public liability, professional indemnity and cyber fraud insurance.
Here are six of the most commonly-held misconceptions that could prove costly…
Myth No 1: All I need is professional indemnity
Professional Indemnity (PI) is certainly important, but it’s not a catch all.
PI helps provide protection against claims from clients who allege that advice has caused them financial loss, however, if interactions with suppliers or customers take place in person, public liability (PL) insurance should be considered as claims of personal injury or property damage can surface unexpectedly, such as someone slipping over or even spilling coffee.
Myth No 2: My contractors are covered under my insurances
Even when a contractor is a long-term, regular partner, they don’t necessarily have the same rights as permanent staff. Some PI and PL policies specifically exclude them, meaning they will need their own insurance. A broker can advise a company on what coverage is provided and whether it needs to be changed.
Myth No 3: I don’t need cyber insurance as I don’t have anything worth hacking!
Any firm with a digital footprint – even if it’s storing customer data using a cloud-based hosting service – has a responsibility to keep that information safe. Research shows that 43 percent of cyber-attacks target small businesses.
Myth No 4: I’m about to retire so I can cancel all my insurance
While it’s true that many policies can be cancelled when a business closes or the owner retires, there’s one that may need to remain active.
Claims can sometimes surface a long time after a company has ceased providing a service as asking a broker about keeping professional indemnity is a good plan as it can offer something called ‘run off cover’. Without it, a small business may have to pay any legal fees.
Myth No 5: I only need to contact my broker if I make a claim
As a business grows or changes, so do its insurance needs, so it could be costly if policies aren’t updated accordingly. Brokers recommend regular conversations to ensure sufficient coverage and to make contact if an incident occurs that may lead to a claim, rather than waiting until the claim has been lodged
That’s why it’s important to have a trusted insurance broker. As a broker and Chartered Accountants insurance specialist, Aon helps find policies customised for the common risks of the industry. They understand that businesses evolve and that policies should evolve with it. Don’t just insure, be sure.
Find out more:
Aon is the Australian general insurance partner of the CA ANZ Member Benefits Program and provides exclusive benefits to CA ANZ members. To find out more and get a quote, visit aon.com.au/ca.
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The information contained in this communication is general in nature and should not be relied on as advice (personal or otherwise) because your personal needs, objectives and financial situation have not been considered. Before deciding whether a particular product is right for you, please consider your personal circumstances, as well as the relevant Product Disclosure Statement (if applicable), Target Market Determination and full policy terms and conditions available from Aon on request. All representations in this communication in relation to the insurance products Aon arranges are subject to full terms and conditions of the relevant policy. Please contact Aon if you have any queries.
The Professional Indemnity Insurance for members of Chartered Accountants Australia and New Zealand is arranged by Aon Risk Services Australia Limited ABN 17 000 434 720 AFSL 241141 as agent for the insurer, Insurance Australia Limited ABN 11 000 016 722 AFSL 227681 trading as CGU Insurance. If you purchase this insurance, Aon will receive a commission that is a percentage of the premium. Further information can be provided upon request.