YOU NEED TO GET THIS

If your business has even the slightest risk exposure to causing property damage or personal injury to another person then you should consider Public Liability Insurance. This could even be you working in another office and someone trips up over your bag and injures themselves or you spill a drink over your client's laptop.

If you are aiming to work for other companies or the government, it is common mandatory requirement that you have Public liability insurance.

For Next Level Mentoring I have Public Liability Insurance. My Limit of Liability is $10 million and my excess is $500. I pay $400 per annum, of which $110 is the fee to the broker.

ONLY NEED IF YOU HAVE EMPLOYEES.

If you are NOT employing anyone then Workers Compensation is NOT mandatory. Since you are starting out, you probably do not have employees.

You cannot get workers compensation as a Sole Trader since you are not an "employee" of the company. But you will need it when you employ people.

If you have set up as a Company and are the sole director then you do not need workers’ compensation for yourself. Technically you are a 'Working Director' and it is therefore optional.

If you do want the comfort of being protected, either as a Sole Trader or as a working director then you should consider some of the personal insurance below. You may already have some of them through your current company's staff insurance or your superannuation (pension) so check first;

• Death.
• TPD (total and permanent disability)
• Loss of income insurance

As soon as you start to employ people, workers compensation becomes mandatory. Please note that contracting a consultant or business to do services for you is not considered ;employment; so you do not need workers compensation for that.

For Next Level Mentoring, I do not have Workers Compensation as I am a "working director". I already have Death, TPD and Loss of Income insurance through my Superannuation which covers me (though I may switch to paying it myself rather than Super as you can claim a tax deduction on it).

PROBABLY NOT NECESSARY

This is only essential if you are using your motor vehicle for your business i.e. using it for deliveries or for getting to clients’ sites.

As you are setting up a side hustle, it probably isn't likely you are using a motor vehicle for your business.

Your personal private vehicle insurance may also cover you for some occasional business. This depends on your policy and you should check your policy wording.

For Next Level Mentoring, I do not have Motor Vehicle Insurance as I do not use my private vehicle for work.

CONSIDER HAVING THIS INSURANCE BASED ON YOUR BUSINESS SERVICES

If your professional advice has the potential to lead to negative effects then you should consider getting Professional Indemnity Insurance, which is sometimes called Professional Liability. 

Here are some examples. If you are a

• coach providing advice that your client will act upon,
• an accountant helping clients with their tax,
• a consultant providing their technical opinion,
• or an IT specialist working for a Company,

the costs to defend your business against any allegations or claims, whether you are liable or not, can be huge.

Then you have the costs for compensation if you’re found liable, which can happen even under the best intent of your advice.

Read the paper and you will find examples where a big issue for a Company was caused by a contractor accidentally making a mistake. That is why, if you are contracting to large organisations, they normally mandate you to have Professional Indemnity insurance.

For Next Level Mentoring, I went several years not having Professional Indemnity Insurance because mentoring was more around offering guidance than giving clear directions on what the mentee should do, so the risk of a claim was very low. But this risk profile changed as the business grew, including starting Side Hustle Success, so I now have it. My cover is $1 million via QBE and currently costs me $655.50 per year. I got this myself rather than using an insurance broker.

 Here is a list of some of the other business insurance that you may want to consider for your specific business.

You can get more details of these at https://business.gov.au/risk-management/insurance/business-insurance

• Product Liability - if your product could break and lead to injury, death or property destruction.
• Goods or asset insurance - if you have property or goods that you want to cover.
• Directors insurance - This covers directors and officers from personal liability and financial loss if a manager or director of the business uses wrongful acts during business- intentionally, allegedly or accidentally.

For Next Level Mentoring, I made the decision not to have any of these at this moment but I am constantly reviewing my services and the potential risk it exposes.