Common Misconceptions About Insurance

There are few things you buy in life hoping to never use. Insurance is one of them. With so many variations in policies, the features could mean the difference between your business and reputation collapsing or rebuilding. It’s a wise purchase, but not necessarily one you want to make—and can be very confusing. Let’s take a look at some common insurance myths to clarify fact from fiction.

Aon

Myth 1. I need only Professional Indemnity insurance

Professional Indemnity (PI) insurance may be one of the most important considerations for any business that provides a service, but it’s not the complete package. PI provides protection against claims that your advice or service caused financial loss. As an occupational therapist who personally interacts with suppliers or customers, however, you may also need to consider Public Liability (PL) insurance. PL covers claims relating to personal injury or property damage during day-to-day business dealings. For example, a client who slips and injures themselves on your premises.

You may also need to consider business insurance that covers your site and equipment from damage caused by fires, storms, or other events. If your business involves the Internet, Cyber Insurance is also worth considering (see myth four). An insurance broker can help you understand your options so you can make an informed choice.

Myth 2. All my insurance policies cover contractors the same way as employees

Why wouldn’t your insurance policies cover contractors the same way as employees? Unfortunately, it’s not that simple. While your PI policy may provide some protection to contractors, they still need their own insurance. Check these details before hiring.

Myth 3. I work from home so I don’t need Public Liability

Working from home may save on office rent and transport costs, but it doesn’t protect your business from liability risks. Even if most of your business is carried out from home, you may still meet clients there or elsewhere. Claims of personal injury or property damage can surface unexpectedly (such as slips and falls, or even coffee spills). PL should therefore be a key consideration regardless of where you work. Myth 4. I don’t need Cyber Insurance—I have no data and nothing worth hacking

Put simply, any business that has a digital footprint, or uses the internet to perform any part of its service, is susceptible to cybercrime.

Even if you don’t consider your data to be highly sensitive, personal information like client addresses and bank account details can be enough to lure criminals. Using a cloud-based hosting service doesn’t offer complete protection to your responsibility in keeping client data safe. Gone are the days when cyber criminals kept their sights set on large corporations, as more and more small businesses have become targets in recent years.

Myth 5. I only need to notify/contact my broker (or insurer) if I need to make a claim

In order to get the most value from your broker, it’s important to keep in regular touch with them. Think about the different insurance policies you have—changes to your business circumstances could mean your insurance policies also need to be updated to ensure you’re covered properly. For example, if you renovate your work premises, you may need to increase the sum insured on your Business Insurance. If you experience an incident which is likely to lead to a claim, you should also notify your broker (rather than wait until you need to make the claim). Staying in contact will help ensure your insurance coverage stays up to date with your changing business needs. About the Author Aon is a leader in risk insurance and proud to be OTA’s preferred broker. For more information, or to discuss your cover, please call the team on 1800 805 191, email au.ot@aon.com or visit our website at aon.com.au/ota

This information is intended to provide general insurance related information only. It is not intended to be comprehensive, nor does it, or should it (under any circumstances), be construed as constituting legal advice. You should seek independent legal or other professional advice before acting, or relying, on any of the content of this information. Before deciding whether a particular product is right for you, please consider the relevant Product Disclosure Statement (if applicable) and full policy terms and conditions, available from Aon on request, or contact us to speak to an adviser. Aon will not be responsible for any loss, damage, cost, or expense you or anyone else incurs in reliance on, or use of, any information contained in this article.

© 2021 Aon Risk Services Australia Limited ABN 17 000 434 720 AFSL no. 241141 (Aon)