Insurance You Actually Need
Public liability, professional indemnity, workers' comp — what's essential.
Notes from Randall Harper. Thirty years working alongside owner-operators, executives and boards — companies of all types and sizes — across entertainment & media, hospitality, service based business, lifestyle businesses, financial services, retail and not-for-profit, in Australia, Asia, the United Kingdom and the United States. What follows is the thinking I keep returning to.
Insurance is the most important thing you hope to never use
Owners often resent insurance premiums. They are paying for protection against an event that, statistically, probably won't happen this year. The mistake is to confuse 'probably won't happen' with 'isn't worth protecting against'. The relevant question is not how often the bad thing happens, but whether you could survive it if it did. For most catastrophic risks, the answer is no — which is why the insurance is essential.
The essentials, for most small businesses
- Public liability — protects against claims if your work injures someone or damages property.
- Professional indemnity — protects against claims that your advice or service caused financial loss.
- Workers' compensation — legally required the moment you employ anyone, no exceptions.
- Business assets / contents — protects equipment, tools, and stock.
- Cyber liability — increasingly essential as digital risk grows.
- Income protection (personal) — protects you if you cannot work.
Sums insured matter as much as coverage
Being insured for too little is barely better than being uninsured. Public liability of $5 million sounds large until a serious injury claim runs to $10 million. Most owner-operators should carry at least $20 million in public liability; larger or higher-risk businesses, more. Talk to a broker about appropriate limits for your specific work — the cost difference between $5m and $20m cover is usually surprisingly small.
Use a broker, not just a website
A good insurance broker is paid by the insurer, not by you, and earns their commission by understanding your specific risks better than any online quote form ever can. For most small businesses, a relationship with a broker who knows your industry produces better cover at a comparable cost — and someone in your corner if you ever need to claim.
Review annually, claim properly
Once a year, review every policy against the current shape of the business. New vehicles, new employees, new services, new locations — all change the risk profile and may need updates. And if something does go wrong, claim early and honestly. Insurance only works if you actually use it when the bad thing happens; many owners delay reporting incidents and inadvertently void their cover.
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The contents of this paper are the opinion of Clear Point Advisory only. Readers should rely on their own judgement and obtain professional advice appropriate to their circumstances.