Taking out insurance is an important consideration for every business. Insurance helps protect your business, workers, patrons and other people impacted by what your business does.
Some insurances are compulsory – they are required by law.
Other types are not required, but having them can be a good idea.
- Insurance can limit liability and financial loss if things go wrong
- Some organisations will choose only to engage businesses that have certain types of insurance.
Compulsory insurance
The law requires businesses to have some types of insurance. What is required will depend on what the business does.
Compulsory insurance includes:
- workers compensation insurance – if the business engages workers
- liability insurances – like public liability, professional liability, product liability or management liability insurance
- third party vehicle insurance – if the business owns and uses vehicles.
Workers compensation insurance
A business is required to have workers compensation insurance if it employs or engages workers.
Workers compensation insurance protects both the business and workers who become ill or are injured because of work.
Insurance requirements differ in each state and territory, and insurance must be with a registered or approved insurer recognised by relevant legislation.
Learn more about workers compensation insurance and find contact details for your local work health and safety regulator.
Liability insurance
There are different types of liability insurances that businesses may be required to have. What is required will depend on the federal, state and territory laws that apply to the business and the work.
Common types of liability insurances include:
- Public liability insurance covers your business when somebody dies, is injured or has property damaged.
- Professional indemnity insurance helps cover the costs of legal action and damages that may be caused by professional negligence, mistake or breaches of contract.
- Product liability insurance protects your business if a product the business makes, sells or repairs causes death, injury or property damage.
- Management liability insurance protects officers, directors and managers and their assets where management decisions have caused loss to others.
In practice:
An art school takes out public liability and workers compensation insurance
An independent art school employs artists to run workshops for children. Volunteers also help out at the art school.
The art school takes out:
- public liability insurance to protect students and members of the public visiting the school
- workers compensation insurance to protect employees.
They contact the regulator in their state and find that some of their volunteer teachers are also covered by their workers compensation insurance.
A small film producer takes out workers compensation insurance
A small film production company employs a production and research assistant.
It is required to have workers compensation insurance because it engages workers.
A studio photographer takes out public liability insurance
An independent photographer has a studio that’s open to customers. The photographer doesn’t employ anyone else.
The photographer finds out that, under relevant state regulation, they’re required to have public liability insurance to protect themselves and the business – for example, if a customer trips and gets hurt.
A theatre company asks to see their accountant’s professional indemnity insurance
A theatre company doesn’t have an in-house accountant. They use an independent certified practicing accountant when they need one. The accountant works as a sole trader from their home.
The accountant is required to have professional indemnity insurance. It protects her and her clients if she makes a mistake.
Before engaging the accountant, the theatre company asks the accountant to show that she has the required professional indemnity insurance.
Other insurance to consider
There are lots of other types of insurance that may provide protection for a business and business owner. These include:
- income protection insurance
- impairment and disability insurance
- business continuity insurance
- building and property insurance
- asset protection insurance
- technology or cyber-security insurance.
Some superannuation policies provide income protection or impairment and disability insurance policy. If you are an independent contractor with a superannuation fund, check with your fund to see what you might already be covered for.
Keep learning:
More in this section:
Setting up as an independent contractor
There are lots of independent contractors in the creative industries. When you work as an independent contractor, you have your own business. This page has information to help you work out if it’s the right business structure for you and some basics on setting up.
Setting up as a company
There are lots of things to consider when deciding whether a company is the right structure for your creative business. Setting up as a company can offer benefits, but it is not straightforward and can be costly.
Setting up or joining a co-operative
A co-operative is a business structure that exists to benefit its members. It can be a useful business structure to support creative professionals working in creative industries.
Registering your business
Most creative businesses need to be registered for different things so they can operate.
Business tax
Having some knowledge of how a business works with the tax system is important for any creative business – even if tax is usually something you’re not very interested in.
Record keeping for businesses and organisations
Keeping the right business records will help you keep things on track and meet your business obligations.
Employee records
Businesses and organisations must keep employee records, including about working hours, pay, leave and super.
