Running your own business is risky – here’s how to protect yourself

Running your own business is risky – here’s how to protect yourself

One of the most ignored risk minimisation strategies for small businesses is insurance cover. For some reason, many business owners ignore the issue of insurance for their business, because after all – what can go wrong?

Well, let’s take a look at some of the main risks to small businesses, how they can affect your operations and profits and how to avoid the avalanche of catastrophes that can result from either having no insurance cover or being severely underinsured.

5 main risks to small businesses

  1. Theft: Whether you operate from a retail store, office, clinic, warehouse or factory, burglars, customers and even employees can still cause a big dent in your profits. Employees can steal anything that isn’t nailed down, customers can lift your products from the shelves and burglars can do serious damage to your operations. 
  2. Vandalism: Whilst vandalism usually takes place to the exterior of buildings, signboards, machinery and vehicles can all be vandalised, even landscaping! Wilful destruction of property can cost a business a small fortune to repair and it needs to be repaired quickly, before it starts to impact your customers and your reputation.
  3. Cyber attacks: The massive and continual increase in cyber attacks on Australian small businesses is something that you can try to prevent, but you can’t guarantee won’t happen to your business. The effects of hacking on the reputation of your business can be enormous, but it can also include loss of essential data, loss of profits and litigation. Costs can include compensation to affected customers, investigations and data recovery, fines and penalties, and crisis management.
  4. Fire: What happens if there is a fire at your business’s property? Even a small fire can result in the closure of your business until the repairs are completed. A large fire that completely destroys your property can close your business for months and even years while you try to rebuild and replace lost equipment, stock and other items. 
  5. Floods: It can be something as simple as a dishwasher or washing machine flooding, broken water pipes or storm damage. Whatever the cause of the flooding, the cost of repairs and the cost of potentially closing your business while the repairs are undertaken can have a significant effect on your profits.


These five issues are just a snapshot of the risks to small businesses. There are also workers compensation costs for injuries at work, public liability, professional liability and product liability to consider. 

You might also contemplate business interruption insurance that will cover lost profits in the event that you have to close your operations due to any of the above incidents. This type of insurance is just about essential for any business that operates from a physical location, which is just about every small business in Australia.

If you have the right insurances in place for your business, you can avoid these major financial losses. We recognise there is a lot to consider which is why our Insurance Advisernet Authorised Representatives are here to assist you. They are specialists when it comes to business insurance and make it their business to understand yours. Enquire about business insurance today. 

Lewis Insurance Services is here to help our clients with advice on helping to protect your business by advising on the appropriate insurance cover for your business.  To discuss further, please contact Lewis Insurance Services on 07 3217 9015 or send us an email by clicking here.

This article was published by our AFSL Licensee, Insurance Advisernet Australia Pty Ltd (02/08/2018)

This information and any accompanying material does not consider your personal circumstances as it is of a general nature only. You should not act on the information provided without first obtaining professional financial advice specific to your circumstances and considering the Product Disclosure Statement