Business owners, so you think you’re insured properly: 5 things to check
Whoever said, “You can never have too much insurance” obviously never had to pay the premiums. Still, there’s no denying the fact you need it to protect your business and its assets.
So you probably have building and contents, public liability and public indemnity insurance. But what else should you get cover for? What else can you get cover for?
The answer to the first question really depends on the type of business you own. As for what you can get cover for, you may be surprised.
Here are five types of insurance every business should consider:
Business Interruption insurance
If there’s a fire at the premises, chances are your building and contents insurance will cover it. But while everything’s being rebuilt/repaired/replaced, you’re not making any money.
Business Interruption can cover you for loss of profit, ongoing staff costs and additional operating costs (e.g. temporarily relocating to another premises).
Goods in Transit insurance
You may have the stock you have on the premises insured, but what about the stock that’s in transit? Whether you’re buying it, selling it or just using it, your business could suffer if it’s lost or damaged.
With Goods in Transit insurance, you’re covered whether it’s coming or going by ship, air, post, rail or road.
Burglary insurance
While your contents insurance probably covers you against fire, flood, malicious damage and other perils, it may not cover you if your goods are stolen. And if your business involves a property you don’t always have attended, that could be a serious risk.
But with Burglary insurance, your goods are covered if they’re taken from your premises.
Product Liability insurance
No-one goes out of their way to sell a product that will harm people or property. But accidents can happen. There may be a glitch in production, or a misprint in the instruction manual, or the customer may have simply used your product the wrong way.
And that accident can result in legal action.
Product Liability insurance covers you against claims of injury, death or damage from goods you sell, supply, deliver, repair or service.
Employment Practices Liability insurance
While you’d never purposely upset your employees, there may come a time when they feel unhappy enough about their work situation to take legal action.
Employment Practices Liability insurance covers you for any damages or costs resulting from accusations of discrimination, unfair dismissal, harassment or other situations.
As you can see, when it comes to insuring your business you have a lot of options. A combination of bad luck and not being insured for one of the above scenarios could cost your business dearly.
It pays to sit down with a risk insurance advisor on a regular basis and review which insurances—the obvious and the not so obvious—you should consider. Even if you decide not to take out insurance in these additional areas of risk, an annual insurances review can make sure you’re neither under- nor over-insured.
This might save you money on premiums.
It will definitely add to your peace of mind.
Get in touch and we’ll make a time to sit down with you and review your business’ insurance needs.
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If your business provides a car to an employee (or you’re the business owner/employee using it), there’s a good chance the Fringe Benefits Tax (FBT) rules apply. A car fringe benefit arises when a car owned or leased by an employer is made available for the private use of the business owner, an employee or their associate (such as a family member). “Private use” doesn’t just mean weekend road trips — it can include everyday commuting and even cases where the car is parked at an employee’s home, making it available for personal trips. Understanding how FBT is calculated and what records to keep is essential for compliance — and for avoiding paying more tax than necessary. What counts as a “car” for FBT purposes? The FBT law defines a car as a motor vehicle (except a motorcycle or similar) designed to carry less than one tonne and fewer than nine passengers. From 1 July 2022, some zero or low-emission vehicles are exempt from FBT, provided they meet certain criteria — for example, they must be first held and used after 1 July 2022 and must not have attracted Luxury Car Tax. Electric vehicle running costs, such as charging, are also exempt when the vehicle itself qualifies. Two main methods for calculating FBT on cars There are two ways to calculate the taxable value of a car fringe benefit. 1. Statutory formula method This method applies a flat 20% statutory rate to the base value of the car, adjusted for the number of days in the FBT year the car was available for private use. The formula is: (A × B × C ÷ D) − E A = Base value of the car (cost price plus GST and certain accessories, less registration, stamp duty and eligible reductions) B = Statutory fraction (generally 20%) C = Days available for private use D = Total days in FBT year (365) E = Employee contributions If the car has been owned for at least four full FBT years, the base value can be reduced by one-third. 2. Operating cost method This method calculates the taxable value by applying the private use percentage to the total operating costs of the car (actual and deemed costs). The formula is: Taxable value = [Operating costs × (100% − Business use %)] − Employee contributions Operating costs include: Fuel, oil, repairs, maintenance, registration and insurance Lease costs (for leased cars) Deemed depreciation (25% diminishing value) and deemed interest for owned cars Certain costs, such as tolls, car parking and insurance-funded repairs, are excluded. The business use percentage is determined by odometer readings, logbook records, and a reasonable estimate based on usage patterns. The three-month logbook requirement (operating cost method only). If you use the operating cost method, you must keep a logbook for at least 12 continuous weeks (roughly three months) to record: The date of each trip Odometer readings at the start and end Total kilometres travelled Whether the trip was for business or private purposes The purpose of each business trip This logbook is generally valid for five years, but you must start a new one if usage patterns change significantly (e.g., a role change, relocation or different duties). You also need to record odometer readings at the start and end of each FBT year. Why record-keeping matters. Keeping accurate records can support a higher business use percentage (and therefore a lower FBT bill). They also ensure you claim only legitimate business kilometres and help you provide evidence if the ATO reviews your FBT calculation. Finally, your records help you decide which calculation method (statutory or operating cost) is more tax-effective. Key takeaways for businesses and employees. If a car is available for private use, FBT may apply — even if the car isn’t driven often for personal trips. Electric cars may be FBT-exempt if they meet eligibility criteria, but you may still need to calculate their taxable value for reporting purposes. The operating cost method often works better if business use is high — but only if you have a compliant logbook. Keep odometer readings, expense records and a valid logbook to support your claims. Need help with your FBT obligations? Get it at Ascent Accountants. We guide business owners through every step of FBT compliance — from choosing the right valuation method to maintaining the right records for ATO peace of mind. If you provide cars to employees or use a company vehicle yourself, now is the time to review your FBT position before the next FBT year rolls over. Let’s talk .
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