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Workplace Health & Safety

Is my business covered for that? 7 common business insurance gaps

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Most small and mid-sized businesses are aware of the importance of having business insurance but often simply opt for general property and liability insurance and call it a day. While these policies cover most of the basics, there may be gaps in your insurance that can leave your business exposed to risk and financial loss. Here are some of the most common potential gaps we see in business coverage and an overview of more specialised policies and endorsements that may help you protect your business and help your business recover after a covered loss. Keep in mind that individual policies can vary widely, so it’s always important to review your coverage options with your broker.


  1. Am I covered if an employee sues my business?

    As an employer, you know that there are certain rules and regulations you need to follow for how you treat your employees, and what you can reasonably expect from them. These days, with more people working from home, and added health and safety considerations for those in the workplace, it can be more difficult than ever to know exactly the right approach—potentially increasing the risk of an employee suing, based on claims of:

    • Sexual harassment
    • Discrimination
    • Breach of employment contract
    • Wrongful evaluation
    • Failure to employ or promote
    • Wrongful discipline


    Company management is also at risk—directors and officers can be personally sued by employees, vendors, competitors, investors, customers, or other parties, for actual or alleged wrongful acts in managing the company.

    Consult your insurance broker about adding these coverages to help close the potential gaps:

    • Employment Practices Liability Insurance – to protect against lawsuits filed by employees who claim their legal rights as employees have been violated.
    • Directors & Officers – to protect your company’s officers and directors if they are personally sued for acts or omissions committed in their capacity as corporate officers or directors.


  1. Is my business covered if it’s sued by a customer for professional negligence?

    When you provide professional services, there is a chance that a customer may claim you failed to complete the services in a satisfactory manner, made a mistake, or provided incorrect information that resulted in a financial loss for them. While you would hope that you could work things out amicably, that may not always be the case. If your business is sued by a customer for either actual or alleged financial damage, appropriate professional liability insurance may help cover the costs.

    Consider adding Professional Indemnity insurance to help protect against claims directly related to your professional services.

  2. If my business is damaged by a fire or break-in and must close temporarily, are my operating expenses insured?

    If your business suffers a physical loss and you need to close part or all of your operation, you may lose revenue and incur additional expenses, such as:

    • Mortgage, rent, and lease payments
    • Employee payroll
    • Taxes and loan payments
    • Relocation costs if your business must move due to physical damage to the premises


    To help cover the potential gap following a covered property loss, ask your insurance agent or broker about adding business interruption insurance to your property policy.

  3. Am I covered if one of my employees accidently infects my company’s computer system with malware?

    You may have heard about data breaches or cyberattacks on large companies. Cybercriminals are not focusing solely on big money, they are looking for vulnerabilities. Small and mid-sized businesses who use outside IT services or have limited IT resources may be more exposed than they realise. If you have employees, your risk is even higher, because each employee is another potential gateway for cybercriminals to access your business.

    Consider procuring a commercial cyber policy to help provide solutions and services for privacy breaches, network security, incident response, and media liability.

  4. Is my business insured if our mechanical system breaks down?

    Advances in technology have led many businesses to rely on increasingly sophisticated equipment. If your business is one of them, consider what would happen if your mechanical or electrical system broke down, and the resulting impact to your business. You could lose valuable resources needed to make the products you plan to sell.

    To help close this potential gap, consider Technology Property Insurance to provide the funds and resources to get you back up and running quickly after a covered loss.

  5. Is my business covered if it is damaged by a flood?

    Floods can happen, anytime and anywhere. If your property is damage by flood, you could be stuck with the bills to replace damaged propert, rebuild to code, and remove debris, on top of operating costs and loss of income during the resoration period.

    Ask your agent or broker about commercial flood insurance options available such as Business Pack.

  6. Is my business covered if my employees are injured while they are overseas?

    If you or your employees travel abroad as part of your business, you may want to make sure you have appropriate coverage that extends beyond Australian borders. For example, how could you help an employee who had a medical emergency while outside the country, lost a passport, or needed to get out of a country due to a political uprising?

    To help cover this potential gap, consider group business travel insurance – to provide resources for international travel, including emergency medical, cash and document replacement, local country reports and travel alerts, and more.

    Regardless of the type of business you run, it may be smart to talk to your independent insurance agent or broker to make sure your business is appropriately insured so that you can focus on keeping your business running smoothly, even if you experience a loss.

This content is brought to you by Chubb Insurance Australia Limited (“Chubb”) as a convenience to readers and is not intended to constitute advice (professional or otherwise) or recommendations upon which a reader may rely. Any references to insurance cover are general in nature only and may not suit your particular circumstances. Chubb does not take into account your personal objectives, financial situation or needs and any insurance cover referred to is subject to the terms, conditions and exclusions set out in the relevant policy wording. Please obtain and read carefully the relevant insurance policy before deciding to acquire any insurance product. A policy wording can be obtained at, through your broker or by contacting any of the Chubb offices. Chubb makes no warranty or guarantee about the accuracy, completeness, or adequacy of the content. Readers relying on any content do so at their own risk. It is the responsibility of the reader to evaluate the quality and accuracy of the content. Reference in this content (if any) to any specific commercial product, process, or service, and links from this content to other third party websites, do not constitute or imply an endorsement or recommendation by Chubb and shall not be used for advertising or service/product endorsement purposes. ©2020 Chubb Insurance Australia Limited ABN: 23 001 642 020 AFSL: 239687. Chubb®, its logos, and Chubb.Insured.SM are protected trademarks of Chubb.

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