We like to think of few things as being genuinely impossible, but running a business without experiencing some change would undoubtedly make the list. Whether you’re new in the world of business ownership, a sole trader or are an experienced business owner, you probably know that operating a business means constantly adapting and adjusting to a changing economic and social environment.

This also means that the insurance you hold for your business also needs to keep up with the changes to the way your business operates or the way you work, so you’re not left without the cover you need.

Here are some of the common changes businesses operating today may be experiencing and how to approach your insurance requirements in light of these changes.

Where you work from

While it may feel like COVID-19 is long behind us, the resulting shift to remote work has very much become a regular part of life. Whether you run your business from an office or from home will influence the type of insurance you need for your business.

If you operate your business from an office, a business insurance pack may be one of the most important covers you might need to consider. It is designed to cover your business’s tangible/physical assets if they’re damaged by events such as fire or storm. It also includes the option to include public liability cover, which is designed to cover your business if you’re held liable for bodily injury or property damage to a member of the public.

If you run your business from home, check if your home insurance policy covers your office equipment, as some home insurance policies may exclude office equipment if they are used as part of a business. Even if it does, a business insurance pack may still be a handy cover to consider for home-based businesses because it is specifically designed for business owners. For example, if some of your equipment is damaged or lost due to theft or storm, a business insurance pack may provide cover for the income you lose during this time, if you select cover for business interruption on your policy.

If you take equipment such as your laptop and/or phone away from your office or home, a business insurance pack may also help protect your assets while they’re away from your office/home. Under the general property section of a business insurance pack, your portable items may be covered while they’re outside for incidents such as loss and damage.

Working with a digital footprint

Regardless of where you run your business from, if it has a digital footprint, you risk falling victim to a cyber attack. Staying cyber safe requires a holistic approach, including having appropriate security software installed on your devices, ensuring staff are aware of cyber safety practices, and considering cyber insurance.

Cyber insurance is designed to cover your business for financial losses incurred as a result of a cyber attack. It may cover both the losses suffered by your business as a result of an attack (known as first-party losses), as well as your legal defence if legal action is taken by third parties impacted in the cyber event (known as third-party liability).

Cyber insurance may also include access to an incident response specialist, who can help coordinate the steps your business may need to take to recover from the cyber incident.

Employing contractors and virtual employees

If you employ contractors or have virtual/remote employees, your professional indemnity insurance may also be impacted, so there are a few additional boxes you’ll need to tick when it comes to ensuring adequate coverage.

If your business provides professional advice and you engage someone as a contractor to work for you, always ensure they have their own professional indemnity insurance. On top of this, you will also need to ensure the services provided by your contractor are covered under your business’s professional indemnity insurance.

This is because if a client takes legal action as a result of the incident, it’s likely both the contractor and your business could be at risk of legal action. Ensure you ask your contractor to provide you with a copy of their certificate of currency before they begin work, as well as an updated copy each year and every time it is changed.

Even if you don’t hire contractors and only have employees, if your staff work remotely or are interstate, bear in mind your business is still responsible for holding worker’s compensation insurance in line with the state/territory your staff are located in.

Using AI

With AI quickly finding its way into many professions and daily uses, it is likely you may be using it in providing your services. If you have incorporated AI into your service, ensure the policy you have in place doesn’t have an exclusion in relation to the use of AI. Even if there isn’t a specific exclusion, all your usual due diligence and risk management practices should stay in place to protect your business reputation.

AI is a tool and, as useful as it may be, you remain the expert and are responsible for the delivery of the professional service, including in any consultation, report or interaction.

If you are using AI to generate client reports, here are a few practices to be mindful of that may help prevent a professional negligence claim:

• Ensure the content of the report is within your own knowledge, training and professional services

• Ensure no confidential, sensitive or identifying information is uploaded/provided to any platform/software where not legally appropriate

• Implement appropriate cybersecurity measures

• Once a report is generated, review and assess the report for completeness and accuracy – no matter how the report is generated, as a professional you are responsible for the content of any report to verify the accuracy and facts.

It is inevitable that your business will go through changes over time, but ensuring your insurance is up to date is an important part of your risk management. Even if you’re unsure whether you need to update your insurance or not, a quick call to your broker may help you clarify whether you need to change anything and may help prevent you being left out of cover should something go wrong.

Aon is a CA ANZ Member Benefits partner. Visit aondirect.com.au/aon-partners/chartered-accountants-anz

Terms and conditions

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.

© 2024 Aon Risk Services Australia Limited ABN 17 000 434 720 AFSL no. 241141 (Aon).

Photography by Tarzan9280