Business Checklist: Insurance
By Graham Park
Part 1 – Starting a horticultural business
Part 2 – Start new or buy an existing business
Part 3 – Business names
Part 4 – Business Checklist – part 1
Part 5 – Business Checklist – part 2
Part 6 – Business Checklist: Insurance
Following from the previous blog posts on the essential business owner’s checklist (see above), this post higlights either obligations you are required to meet in setting up a business or that you should strongly consider.
As an employer you need to ensure the following:-
INSURANCES
1. Work Cover
Work cover insurance is compulsory in Queensland if you employ workers, this insurance is aimed at covering a business for the costs associated with compensating workers who sustain a work-related injury or illness.
Work cover insurance is not necessarily all encompassing, as a worker is still able to make a Common Law Claim, that is, to seek compensation through the courts if as an employer the worker considers that you were partly or entirely at fault in their illness or injury. Your Workcover Insurance will cover some or all of such claims.
As an employer you need to:
•Make application for a Workcover Policy before you employee anyone.
•The policy is renewed each year, with the following critical dates:
- By the end of July, you will receive a Declaration of Wages form or Premium Notice.
- By the end of August, submission of Declaration of Wages.
- By 16th September, due date for payment of (insurance) premium to obtain the early payment discount.
- By the 30th September, return to Workcover Queensland your direct debit request if you choose to use a payment plan, which allows you pay our premiums using a monthly or quarterly payment plan. This must be done using a direct debit facility.
- By the 30th September payment in full if you do not choose to pay in instalments are take the early payment plan.
- The 5th October, first instalment is taken from your bank account if you use an instalment plan.
Apart from paying your premiums, managing your Workplace Health and Safety obligation is also necessary. If there is an injury at work you have certain obligations.
1. You are required to send a Workcover Queensland Employers Report within eight (8) business days of becoming aware of an injury. The Employers Report form details all the information you are required to give. Workcover Queensland provide detailed information sheets.
You are able to dispute the employees claims, initially at the time you lodge your claim. Or after the claim has been approved by Workcover Queensland to Q-Comp, which is the Workers’ Compensation Regulatory Authority.
2. You are required to pay the injured worker’s wages for the day of injury, this cannot be drawn from the worker’s sick leave, annual leave or other entitlements.
3. You are also obliged if necessary to take every reasonable step to assist with an employee’s rehabilitation.
4. You are required and it is usually in your best interests to co-ordinate a suitable duties program if the injury requires such.
5. You should be aware the definition of those who work for you is quite extensive, and not simply those limited by Taxation standards. For example sub contractors can be considered as workers and under certain circumstance can make a Workcover Claim against you.
Workcover Queensland insurance is administered through a Queensland Government Act, so it is important that you meet your obligations, as fines and charges can be laid in certain circumstances.
Workcover does not only include physical injuries, but physiological matters as well. Other states need to contact their respective administrative bodies.
Workcover premiums are based on the industry type and Experience Based Rating (EBR). The EBR you achieve will affect the total premium paid. As with most insurance types, if you have claims against your Workcover Insurance your premiums may increase.
Detailed information can be viewed on line by accessing the WorkCover Queensland Website at www.workcoverqld.com.au
It is a good business practise to keep detailed employee records, including detailed notes about any sort of injury even if the employee requires no time off from work, or if the results of an incident could lead to a future Workcover Claim. Employees can make claims well after an injury occurred, again a visit to Workcover information is needed to fully understand all your obligations.
2. Public Liability Insurance
This is an insurance that protects you and or your business against some of the financial risk of being liable to a third party for personal injury, including death or damage to property as a result of activity or occurrence in connection with your business.
The insurance will be limited to a value, for example a five (5) Million dollars, this will cover you per occurrence to a claim up to that value. You need to consider what size policy you should obtain, because if the claim exceeds the policy limit you have, you and or your business may be liable for any sum found against you in excess of the policy limit.
There is no Government legislative obligation for this insurance although it is unlikely that many clients would engage your business in the absence of this insurance. It is also a responsible and prudent insurance to have and maintain
3. Product Liability
This is often bundled with Public liability, again it is not legislatively required, but again it is responsible and prudent to have and maintain. It covers against claims of damage or injury caused by goods or products sold by your business.
4. Other insurances
There are a number of other insurance to consider as follows:
4.1 General property insurances – depending on the policy and covers, burglary or theft, fire damage, flood, etc.
4.2 Business interruption – insures your business and will provide funds if your business is interrupted from its normal operation for example by fire.
4.3 Motor vehicle insurance – there is a compulsory component, in terms of third party insurances at time of vehicle registration. Comprehensive insurance covers third party injury and property damage, as well as damage to your vehicle and the like.
4.4 Disability insurance – this insurance will pay a percentage of the income you earn if you are forced to stop work because of injury, accident and illness. As a business owner it is likely you will not have any protection via Workers Compensation. The insurance is complex and there are many types, and can include components, such as Income Protection, Trauma, Permanent injury or disability.
4.5 Fidelity Insurance – insures against theft or misappropriation by employees.
4.6 Machinery breakdown – insures against machinery breakdown.
4.7 Consequential loss – insures against consequential loss.
4.8 Director and office bearers insurance – provides some protection to person functioning in the listed capacity.
4.9 Electronic Equipment and Breakdown policies – can insure to replace computers and data re-entry.
4.10 Employment practices liability – can insure for claims by employees for employment related allegations, such as Wrongful dismissal, etc.
4.11 Tax audit – if the ATO carries out an audit this covers some or all the costs of your accountant in the audit.
4.12 Weather – for loss of crops, trade or activity not proceeding due to weather.
There is a vast range of insurable options available to business owners, not all are required by businesses via government legislation, however some should be considered essential, whilst others are worth considering. The names and combinations of insurance in some cases will vary, and business owners will need to consider their operations and determine those applicable to them, and determine what insurance best suit them.
The information in the article is general in nature and should not be substituted for professional advice specifically for individual requirements.
<this article first appeared in Issue 5 of hortiQ magazine>
writer – Graham Park holds a B. App Sc (RT), MAIH, Managing Director of TNS Holdings, Parks Landworks P/L and Park’s Hortworks P/L. www.parksworks.com.au
