![](\"http:\/\/redysure.com\/staging01\/wp-content\/uploads\/2019\/09\/what-insurance-cover-does-a-growing-business-need_BIG.jpg\" "\\"what-insurance-cover-does-a-growing-business-need_BIG\\"")
<\/span>One of the drawbacks to owning a growing business is having more at stake. An expanding business is likely to be having dealings with an ever-increasing number of individuals, getting involved in a wider range of commercial activities, even expanding into new locations.<\/p>\n
A growing business usually requires a growing workforce. With more equipment and larger premises come more expensive rent payments. In such circumstances, any revenue-disrupting interruption to its activities can soon escalate into a cashflow crisis.<\/p>\n
In short, the cover that was sufficient when you were a sole trader or running a scrappy start-up isn\u2019t likely to be adequate once you\u2019re heading up a thriving enterprise. The end of the financial year is a great time to think about how your business has changed over the last 12 months and review your insurance policies.<\/p>\n
\nThe cover that was sufficient when you were a sole trader or running a scrappy start-up isn\u2019t likely to be adequate once you\u2019re heading up a thriving enterprise<\/p>\n<\/blockquote>\n<\/div>
<\/div><\/div><\/div>Employers\u2019 liability insurance<\/h4>\n
When it comes time to make your first employee hire, you\u2019ll be legally required to take out workers\u2019 compensation insurance. You should consider taking out a form of back-up workers\u2019 compensation insurance called employers\u2019 liability insurance. This is because it\u2019s possible for an employee to suffer an illness or injury that is job-related yet not covered under a standard workers\u2019 compensation policy (employers\u2019 liability insurance can cover for these type illnesses, injuries and fatalities.) Even if it\u2019s not a legal requirement, to be an employer of choice, you could have employers\u2019 liability insurance as an additional benefit if you want your employees to have better cover in the event of an employee suffering a misfortune.<\/p>\n
<\/div><\/div><\/div>\nDirectors\u2019 and officers\u2019 insurance<\/h4>\n
A growing business will inevitably become more hierarchical and possibly move from a sole trader or partnership business structure to a company one. In any largish enterprise, there are individuals \u2013 executive directors, non-executive directors, executive officers, senior managers and the company secretary \u2013 who shoulder important responsibilities.<\/p>\n
Understandably, these people don\u2019t want to be placed in a position where they could suffer personal financial loss as a result of doing their job. By providing directors\u2019 and officers\u2019 insurance, a business owner can provide cover to key staff and board members. That means they can be reimbursed for their legal costs if competitors, creditors, employees, liquidators, regulators or shareholders take legal action against them.<\/p>\n
<\/div><\/div><\/div>\nBusiness interruption insurance<\/h4>\n
The more your business grows, the larger its fixed costs are likely to be and the more expensive an interruption to its smooth functioning will become. A suburban caf\u00e9 may only be out of pocket a few hundred dollars if a blackout means it has to shut down for the afternoon. In contrast, it\u2019s estimated Starbucks\u2019 recent decision to close its US stores for an afternoon (to provide racial-bias training to staff) cost around\u00a0US$12 million<\/a>\u00a0(A$16 million).<\/p>\n
If an unfortunate event means you need to shut up shop, your revenue will typically be severely impacted during the shutdown period. Nonetheless, you\u2019ll probably continue to face the usual wage, rent and other business costs. As explained more fully\u00a0here<\/a>, business interruption insurance can provide a pay-out to cover you for those costs, as well as make up for lost sales.<\/p>\n
<\/div><\/div><\/div>\nCyber insurance<\/h4>\n
In the digital age, an IT issue can be as devastating as any fire, flood or storm. The two threats businesses, especially smaller ones with limited IT budgets, most need to worry about are ransomware attacks and data theft.<\/p>\n
A ransomware attack results in a business\u2019s files being encrypted. Important data is rendered inaccessible, which can make it difficult or impossible for a business to keep operating \u2013 until a ransom is paid to return things to normal. It\u2019s estimated that, globally, ransomware inflicted\u00a0US$5<\/a>\u00a0($A6.5 billion) of damage in 2017.<\/p>\n
Governments in Australia and elsewhere are tightening privacy regulations and\u00a0stiffening financial penalties<\/a>\u00a0for data breaches. If a malicious actor overcomes your cyber security and captures your customers\u2019 personal data, the consequences can be more serious than brand damage. You could find yourself being investigated by the government regulator and being sued by your customers. As explained more fully\u00a0here<\/a>, cyber insurance can help cover financial losses arising from a cyber security breach.<\/p>\n<\/div>
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