A business takes years to build, but an accident or disaster could destroy it all in minutes. Operating any business in Australia offers opportunity and risks, yet it can be difficult to know which route to take in terms of insurance.

From accidents to complicated legal disputes, businesses can face challenges that disrupt business operations and financial stability, and commercial insurance is a powerful safety net.

With this in mind, what are the most common types of commercial insurance in Australia, and why is it so important to have? This blog will help you make an informed decision.

Types of Commercial Insurance

Every business (regardless of size or industry) can face risks, whether it be property damage from natural disasters or liabilities from customers. In any case, it is a good idea to be protected from the unexpected. What are some types of commercial insurance?

Public Liability Insurance

Public liability insurance is fundamental for businesses that interact with clients, suppliers, or the general public. It covers legal costs and compensation claims if someone is injured or their property is damaged due to your business activities.

There are several types of liability insurance, including:

Product Liability Insurance
Public Liability Insurance
General Liability Insurance
Professional Liability Insurance
Employer’s Liability Insurance
Property Damage
Advertising injury

For example, if a customer slips and falls on your premises, the insurance covers the costs involved. What does public liability insurance cover?

Third-Party Injury: Covers medical expenses and legal costs if a non-employee is injured on your business premises or due to your business operations.

Third-Party Property Damage: Pays for repairs or replacements if your business activities cause damage to someone else’s property. For specific information however, double-check with your insurer as it may not be included in your insurance premium

Professional Indemnity Insurance

Are you part of a business that provides professional services or advice for a fee? Professional indemnity insurance (also known as PI insurance) protects you against claims of negligence, errors, or omissions that result in a client’s financial loss. It covers:

Legal Costs: Covers expenses related to defending claims in court.
Compensation Payments: Pays for damages to clients due to professional mistakes or negligence.

In Australia, certain professions are mandated by law or industry standards to hold professional indemnity insurance to operate legally and ethically.

PI insurance extends to cover the legal expenses, investigative costs and if necessary financial compensation. Covers you for defamation, incorrect advice, breach of duty, omission, public relations, or engaging in misleading or deceptive conduct.

Cyber Insurance

Cyber insurance offers protection against losses resulting from cyber incidents in relation to your business, losses to others, response costs, criminal financial losses, and tangible property as a result of a cyber attack. Coverage includes:

Business Interruption: Compensation for income loss during downtime caused by cyber events.
Data Breach Costs: Expenses related to notifying affected individuals and regulatory bodies.
Cyber Extortion: Costs associated with ransomware attacks, which can include negotiation and payment.

If you use computers, online systems, applications or software to help run your business, it’s in your best interest to invest in cyber Insurance to avoid the devastating impact and cost of cybercrime. Knightsbridge Insurance Group can point you in the right direction and provide data-driven strategies.

Business Interruption Insurance

Business interruption insurance provides coverage for loss of income when business operations are halted. This could be due to unforeseen events such as fire, flood, or equipment failures. What is covered?

Income Replacement: Covers the profit that would have been earned during a period of disruption. This includes gross profits, gross earnings, and monthly earnings.
Fixed Costs: Assists with operating costs that continue even when business activities are suspended. It can also cover relocating costs and/or operating from a different location.
An indemnity period between 3 to 24 months to meet ongoing expenses following things like a fire or explosion.

As a cost-effective strategy, this insurance assists with everyday costs and protects profit margins so a business can get back on its feet after disaster strikes.

Workers’ Compensation Insurance

According to Fair Work Australia, it is mandatory in Australia for businesses with employees, workers’ compensation insurance covers medical expenses and wages for workers who are injured or become ill due to their job. What does workers compensation insurance cover?

Medical Expenses: Covers costs for treatment and rehabilitation.
Income Support: Provides a portion of the employee’s wages during recovery.

Employers are required to have this insurance to cover their workers.

Commercial Property Insurance

Commercial property insurance protects a business’s physical assets (including buildings, equipment, and inventory) against risks like fire, theft, liability claims and natural disasters.

It ensures that the cost of repairing or replacing damaged property does not fall entirely on the business. What specifically does this cover?

- Building Coverage: Protection for the physical structure of your business premises.
- Contents Coverage: Safeguards equipment, furniture, and inventory within the building.
- Third-Party Claims: For bodily injury or property damage occurring on the premises.
- Flood and Natural Disaster Coverage: Options protection against floods, earthquakes and other disasters.
- Loss of Rental Income: Ensuring rental revenue continues if the property becomes inhabitable due to covered damage.

Legal expenses, contents and stock products, glass and signage, or tenant improvements or benefits.

Businesses can often customise their policies to include coverage for risks relevant to their operations, such as machinery breakdown or loss of rental income.

Knightsbridge Insurance Group provides tailored solutions for property owners, landlords, and tenants to safeguard their investments and ensure business continuity.

If you would like to learn more about insurance policies, read the 7 must-have in your logistics insurance policy for 2025.

How Do You Choose Insurance for Your Business?

Assessing Business Needs. What are the risks associated with your industry and operations? Consider the nature of your services.

Understanding Policy Terms and Costs. Look into the specifics of insurance policies and avoid unexpected gaps. A policy may not cover what you need it to or it may be over-budget.

Industry-Specific Requirements. Certain industries may have mandatory insurance requirements or standards. For example, healthcare professionals might be legally required to hold professional indemnity insurance.

Consulting Insurance Brokers. Engage with professional insurance brokers for valuable insights into the complex landscape of commercial insurance.

Knightsbridge Insurance Group offers tailored advice, compares policies from various insurers, and assists you in finding coverage that aligns with your business requirements and budget. Contact us today!

Looking for Commercial Insurance Brokers in Melbourne?

Don’t let the complexity of commercial insurance get in the way of your peace of mind. Life can be unexpected, and when you run a business, your business activities have the potential to affect stakeholders in serious and costly ways, so it is best to be prepared.

As your trusted insurance brokers, Knightsbridge Insurance Group help you find the right products and commercial insurance in Australia as there is no one-size-fits all solution. If you’re tired or trying to compare confusing policies, fees, and coverage options, we take the time to explain your options in real-world language.

Whether you need speciality insurance, personal insurance, get in touch with us on 1300 527 4343 and make a claim today. We’ll lead you to victory.

What Are the Most Common Types of Commercial Insurance in Australia?