What Business Insurance Is Mandatory in Australia?

Understanding which business insurance is mandatory in Australia is essential for business owners, employers, and sole traders. While not every type of insurance is legally required, failing to hold compulsory cover can result in fines, legal action, or the inability to operate your business.

Operating without the right insurance exposes businesses to serious financial and legal risks. Learn more about the risks of operating without business insurance and how uninsured claims can impact your business.

This guide explains what insurance Australian businesses must have, when it applies, and what additional cover is strongly recommended.

Is Business Insurance Mandatory in Australia?

There is no single business insurance policy that is mandatory for all businesses in Australia. However, certain types of insurance are legally required depending on your business structure, activities, and whether you employ staff.

In practice, many businesses must hold specific insurance policies to:

• Comply with Australian laws and regulations
• Meet contractual or licensing requirements
• Protect against significant financial risk

Workers Compensation Insurance (Mandatory for Employers)

If your business employs workers, Workers Compensation Insurance is legally mandatory in every Australian state and territory.

This insurance covers employees for:

• Workplace injuries or illness
• Medical expenses
• Lost wages
• Rehabilitation costs

Workers compensation requirements vary by state, but all employers must hold cover from an approved insurer or state authority.

Learn more about Workers Compensation Insurance and employer obligations.

Compulsory Third Party (CTP) Motor Insurance

If your business owns or operates vehicles, Compulsory Third Party (CTP) insurance is mandatory. This cover is required to register vehicles and provides protection for injuries caused to other road users.

CTP insurance does not cover property damage or vehicle repairs, so businesses often require additional commercial motor insurance.

When Is Public Liability Insurance Required?

Public Liability Insurance is not legally mandatory in all cases, but it is often required by:

• Local councils
• Landlords
• Event organisers
• Principal contractors
• Licensing bodies

Many businesses cannot operate without public liability insurance, particularly those that:

• Interact with the public
• Work at client premises
• Operate from leased locations
• Provide on-site services

Read more about Public Liability Insurance and when it’s required.

Professional Indemnity Insurance (Mandatory for Some Professions)

For certain professions, Professional Indemnity Insurance is mandatory under industry regulations or licensing requirements.

This commonly applies to:

• Financial advisers
• Accountants
• Engineers
• Consultants
• Architects and designers

Professional indemnity insurance protects against claims arising from advice, errors, or professional services.

👉 Learn more about Professional Indemnity Insurance.

Other Insurance Commonly Required by Contract or Licence

While not legally compulsory, the following types of insurance are often required by contracts, regulators, or industry standards:

• Management Liability Insurance – for companies with directors and employees
• Cyber Insurance – increasingly required for businesses handling customer data
• Business Insurance Packages – often required by landlords or financiers

Holding these policies can be essential for winning contracts and protecting your business.

If you’re unsure which insurance policies apply to your situation, this guide explains what insurance you need for your small business and how coverage requirements vary.

What Happens If You Don’t Have Mandatory Insurance?

Operating without required insurance can lead to:

• Fines and penalties
• Breach of contract or lease agreements
• Legal claims against your business
• Personal liability for directors or sole traders
• Loss of licences or inability to operate

Even where insurance is not legally mandatory, the financial consequences of operating without cover can be severe.

How an Insurance Broker Can Help

Understanding which insurance is mandatory for your business can be complex, particularly when requirements vary by state, industry, and business structure.

An experienced business insurance broker can:

• Identify which insurance policies are legally required
• Explain contractual and licensing insurance obligations
• Arrange suitable cover from approved insurers
• Ensure your business remains compliant
• Assist with claims and ongoing policy reviews

Working with a broker helps ensure you meet your legal obligations while avoiding unnecessary or unsuitable cover.

Final Thoughts

While not all business insurance is mandatory in Australia, some types of cover are legally required, and others are essential for operating your business safely and compliantly.

If you’re unsure which insurance your business must have, seeking professional advice can help prevent costly mistakes. For a broader overview of protecting your business, read our short guide to insurance success for business owners.

Speak with Morgan Insurance Brokers to confirm your mandatory insurance requirements and arrange suitable cover for your business.

by Lauren Spice

Machinery Breakdown Insurance for Business – FAQs

Machinery breakdown insurance protects businesses against the sudden and unexpected failure of essential equipment. For many businesses, a single mechanical or electrical failure can cause costly downtime, lost revenue, and expensive repairs that standard business insurance does not cover.

This guide explains how machinery breakdown insurance for businesses works, what it covers, and when businesses should consider adding it to their insurance program.

What Is Machinery Breakdown Insurance?

Machinery breakdown insurance covers the cost of repairing or replacing machinery that fails due to mechanical or electrical breakdown. Unlike general property insurance, this cover applies to internal failures such as motor burnout, electrical faults, and pressure system failures.

What Does Machinery Breakdown Insurance Cover?

Machinery breakdown insurance may cover:

• Electrical motor burnout
• Power surges and electrical failure
• Mechanical failure of equipment
• Refrigeration and air conditioning breakdown
• Sudden and accidental internal damage

Cover applies to insured equipment essential to business operations.

What Is Not Covered by Machinery Breakdown Insurance?

Typically excluded:

• Wear and tear
• Gradual deterioration
• Poor maintenance
• Pre-existing faults
• Consumables and routine servicing

This is why correct policy structure matters.

Which Businesses Need Machinery Breakdown Insurance?

Machinery breakdown insurance is commonly required by:

• Retail and hospitality businesses
• Manufacturers and workshops
• Commercial property owners
• Medical and professional practices
• Food and beverage businesses
• Offices with critical equipment

Any business relying on powered equipment is exposed to this risk.

Is Machinery Breakdown Included in Business Insurance?

Machinery breakdown insurance is not automatically included in standard business insurance policies. It is usually an optional extension or separate section that must be specifically added.

A business insurance broker can review whether your existing policy leaves gaps in cover.

Machinery Breakdown vs Business Interruption Insurance

Business interruption insurance covers lost income resulting from an insured event.

In many cases, both are required to fully protect a business following equipment failure.

Machinery Breakdown Insurance FAQs

Does machinery breakdown insurance cover electrical failure?

Sometimes, but not always.

Machinery breakdown insurance can cover electrical failure, but only when the policy specifically includes electrical breakdown.

In some policies, electrical failure is a separate option or extension, meaning it is not automatically included and must be added to the cover.

That’s why policy wording matters, many standard business policies exclude electrical failure unless electronic breakdown is taken out separately.

How much does machinery breakdown insurance cost?

Premiums vary depending on the type of equipment, values insured, and risk profile of the business.

Is refrigeration equipment covered?

Refrigeration and cooling equipment can be insured under machinery breakdown policies, which is critical for many businesses.

Do small businesses need machinery breakdown insurance?

If equipment failure would stop operations or cause major costs, this cover should be considered regardless of business size.

Machinery breakdown insurance should be structured to work alongside your broader business insurance program. An insurance broker can identify coverage gaps and ensure your policy reflects how your business actually operates.

by Lauren Spice

Changing from a Sole Trader to a Company: How to Update Your Business Insurance

Transitioning from a sole trader to a company structure is an exciting step for any business owner. It often marks growth, new opportunities, and greater professionalism. But it’s also a time to review your insurance coverage because your risks and legal responsibilities change too.

Why You Need to Update Your Insurance When You Become a Company

When you move from a sole trader to a company, your business becomes a separate legal entity. This means your existing insurance policy which is in your personal name may no longer provide the right protection.

In most cases, you’ll need to update your insurance details or take out a new policy under the company name.

Your insurer will usually ask questions such as:

• Are the business activities the same?
  If your operations, services, or products have changed, this can affect the type and level of cover required.
• Are there common directors from the previous entity?
  Insurers look at the people managing the business to assess continuity and risk.
• Has your turnover increased?
  Higher turnover can mean increased exposure and insurers may adjust your premium accordingly.
• Have there been any previous or potential claims?
  Claims history from the sole trader period can still be relevant, especially for professional indemnity or liability policies.

Updating your insurance ensures there are no gaps in cover during your transition, and that your new company is fully protected from day one.

The Benefits of Reviewing Your Cover with Morgan Insurance Brokers

When your business structure changes, it’s the perfect time to review your insurance portfolio. Working with Morgan Insurance Brokers means you’ll have a dedicated expert who:

• Understands your business and industry risks
• Reviews your existing policies for suitability under your new company
• Shops the market for the best available cover and pricing
• Helps you understand your legal obligations as a director and company officer
• Supports you with claims management and ongoing advice

With Morgan Insurance Brokers, you can rest assured you’re getting comprehensive, tailored protection, not a one-size-fits-all policy.

Key Insurances a Company Should Consider

When you incorporate, your insurance needs typically expand. Below are the core policies every company should review or establish:

1. Public Liability Insurance
   Public Liability Insurance Protects your business against claims for personal injury or property damage caused to third parties.
2. Business Insurance
   Covers your premises, stock, equipment, and contents against loss, damage, or theft.
3. Management Liability Insurance
   Protects directors and officers from claims related to management decisions including breaches of duty, misrepresentation, or employee issues.
4. Cyber Insurance
   Essential in today’s digital world. Covers data breaches, cyber-attacks, and recovery costs.
5. Motor Insurance
   Covers company-owned vehicles for accidents, damage, or theft.

By ensuring each of these areas is adequately protected, you safeguard your company’s assets, reputation, and future.

Final Thoughts

Changing your business structure is a major milestone but don’t let outdated insurance put your success at risk.
Speak with Morgan Insurance Brokers today to review your current cover and find the best protection for your new company structure.

by Lauren Spice

Professional Indemnity Insurance: What it Costs and Why You Need it as a Sole Trader

When running your business as a sole trader, it is important to insure yourself against anything that could bring financial harm to you and your business. Because you are legally the same entity, any business liability is your liability.

For most sole traders who provide services for clients, you could find yourself in the tough spot of having a client sue you for your service not delivering in the way they expected it to. This is where professional indemnity insurance would cover you.

Do I Need Professional Indemnity Insurance?

The chances are high that if you don’t think you need professional indemnity insurance, you most probably do. Don’t just think of how someone could make a claim against your business; think about the time, effort, and resources that drain your business when battling a claim like this. The loss that comes from having to pay the legal fees for the claim and the loss of business are enough to not just damage your business finances but your personal funds as well.

The professions that have a legal requirement in Australia for adequate professional indemnity insurance are:

• Accountants
• Architects and draftsmen
• Bookkeepers, BAS, and tax agents
• Electricians
• Financial Planners and mortgage brokers
• Plumbers
• Registered migration agents
• Real estate agents

While not a legal requirement for some, it is still an important insurance policy to consider for almost every business that provides advisement or services, including but definitely not limited to:

• Tradesmen (plumbers, electricians, builders, etc.)
• Personal trainers
• Massage therapists
• Tutors
• IT professionals
• Engineers

All of these sole traderships can benefit from having an indemnity insurance policy, especially if a client insists on lodging claims of negligence or malpractice. Insuring yourself with this policy means you are protecting you and your business from financial risks by covering costs for legal fees; it also covers any compensation paid to the client if a claim is successful.

How Much Does Professional Indemnity Insurance Cost for Sole Traders?

Just like a sole trader's business, no two insurance policies are the same. The cost of your policy can be influenced by a range of factors:

• Number of staff: If you are operating a sole tradership with employees, the number of people you employ can mean higher premiums.
• Staff turnover: Sole traders with a lower annual turnover means there is less risk for your business, meaning lower premiums. High turnovers mean more risk of claims made against you, so insurers charge higher premiums.
• Client type: The type of clients you deal with can also have an impact on your insurance premiums. The larger-scale the client, the higher the premiums compared to lower-end clientele.
• Industry: Some industries may have higher premiums than others because they carry a higher risk profile. For instance, an accountant would face much higher premiums than an artist.
• Additional benefits: As mentioned above, no two policies are the same. If you choose to include additional protections into your policy this will cost you more.
• Excess: An excess is what you pay if you ever have to lodge a claim. The higher your excess is, the lower your premiums will be.
• Previous claims: It is also a legal obligation in Australia to inform future insurers about past claims you may have made against any insurance policies.

Depending on all of the factors above, a thorough business evaluation is also done to evaluate any further risk factors relevant to the insurer. As a benchmark, professional indemnity insurance can range anywhere from $50 to over $200 AUD per month.

Why Choose Morgan Insurance Brokers?

When you choose to insure yourself with Morgan Insurance Brokers, you can rest assured knowing our specialist brokers compare policies from over 100 insurers, tailor making a comprehensive insurance plan specifically for your business.

Don’t wait until it’s too late, contact us today for a free quote and protect your business.

by Mojo Dojo

Protect Your Online Business with Cyber Liability Insurance

In the digital age, protecting yours and your customers' data is of the utmost importance, especially if you deal with personal data like home addresses and contact numbers. Data breaches are on the rise in Australia, with thousands of breaches reported each year, meaning your business is at risk of having a cybersecurity incident.

The most notable data breach from the past few years was the Medibank breach that saw 9.7 million people’s personal details leaked to a well known ransomware group, highlighting the importance of cyber liability insurance. It is crucial for sole traders and small businesses to protect themselves and their business against unexpected financial risks surrounding cyberattacks.

What is Cyber Liability Insurance and What Does it Cover?

Cyber liability insurance offers a level of financial protection in the case of a cyber security breach. For instance, if a data leak does happen then the business will be liable for incident response, remediation, brand damage, litigation, compliance fines, and any customer damages.

Alternatively if ransomware or hackers wipe any data or lock you out of your system, cyber liability insurance could help reimburse you for any costs associated with the potential damage to your computer system or loss in business. Cyber insurance policies help reduce the costs of the fallout.

There are a handful of ways businesses get hacked:

• Viruses: These are a type of malicious code or programme written into how a computer operates, intended to spread from computer to computer and give hackers the ability to destroy computer systems.
• UI redress attacks: Known also as clickjacking, is when a hacker tricks a user into clicking a button they didn’t intend to so they download malware, viruses, transfer money, or purchase false products online.
• Cookie theft: This is when hackers get access to cookie data and can get information like addresses, phone numbers, and other sensitive information.
• Distributed denial-of-service (DDoS) attacks: These kinds of attacks are done by flooding an online server with internet traffic to try and stop users from accessing the services and sites.
• Domain name system (DNS) spoofing: Hackers do this by changing the domain name of a website so that any users are redirected to a fraudulent website that could steal the users information.
• Social engineering: Social engineering is the use of deception to try and manipulate someone into disclosing confidential or personal information for fraud. The most common type of social engineering is phishing, where an email has a link that downloads harmful software or redirects to a malicious website when clicked.
• Missing security patches: Security patches are updates your computer needs to install so your computer is safe and protected from hackers. When a security patch is missing, leaving your computer open to cyberattacks.
• Malware injections: Malware is an umbrella term for different programmes installed on computers and mobile devices with the intention of causing harm and finding data for financial gain. The most common type of malware injection is an SQL infection, where a hacker uses malicious code to manipulate a database into revealing information.
• Password cracking: This one is simple, with a simple solution. Also known as password hacking, it is the process of using a programme to guess a password that is protecting a system.

Why do Sole Traders Need Cyber Liability Insurance?

Cyberattacks could happen to anyone, which is why it is best to be prepared for the fallout of a potential data breach. In 2024, business-targeted cybercrimes have been witnessed every 7 minutes in Australia. The ACSC itself has 77,600 reported cases of cybercrime, that’s a 15% increase on previous year. Cyberattacks cost Australian businesses a total of $33 billion annually.

All of these reasons and more are why sole traders need a cyber liability insurance policy. When it comes to cyber security, there is no such thing as IF, but WHEN.

What Can Cyber Liability Insurance Cover?

This largely depends on the insurance company. Not all companies are the same, which is why it helps to talk to an insurance broker for your insurance needs. A cyber liability insurance policy can cover:

• Cyber extortion
• Cyber espionage
• Denial of service
• Card skimming
• Crimeware
• Hacking

Why use Morgan Insurance Brokers?

When it comes to protecting your customers data and information, it is crucial to get cyber liability insurance so you are covered for any unexpected attacks. As with many things, insurance is there to help, but Morgan Insurance Brokers are there to help you. We are dedicated to getting you the best insurance protection possible for you to run your business stress-free.

Don’t let a cyberattack crash your business, contact us today as your next cyber liability insurance broker and get one step closer to safeguarding your future.

by Mojo Dojo

How does Fleet Insurance works?

As a specialist in fleet insurance, we know how risky owning a fleet of vehicles can be. You never know what might happen when you’re out on the road all day every day, the cost of repairs for vehicles aren’t cheap these days either. Multiply that potential cost by how much fleet you own for your business, and that is a potential financial landmine.

Having fleet insurance gives you that little bit of extra security in knowing you cover your vehicles in case of damages in accidents both on and off the road. Depending on your policy, insurance coverage can extend to third party damage and theft as well. At Morgan Insurance Brokers, we guarantee getting you the best fleet insurance coverage for your business.

Understanding Fleet Insurance and Why you Need It

Put simply, fleet insurance is a type of insurance policy that covers all vehicles. This could be anything from basic car sedans or hatchbacks, to vans, to utes, and even to trucks. By insuring your entire fleet with a tailor-made fleet insurance policy instead of individually insuring each vehicle separately, you could save yourself thousands of dollars in premiums.

One thing to note is that compulsory third-party (CTP) insurance (or Green Slip in NSW) is a legal requirement in Australia. Some states include this insurance as part of your vehicle registration, but other states like New South Wales and Queensland require you to have insured your vehicle with a pre-approved list of CTP insurers before registering your vehicle. CTP insurance is separate from fleet insurance and is usually not included in fleet insurance policies.

What Does Fleet Insurance Include?

Depending on which insurance policy you sign with, these are some of the standard coverages that come included:

• Damage to own property: A comprehensive fleet policy will always cover any damage to the vehicle itself, whether that be your own fault or someone else’s fault.
• Damage to property: If there is damage to any property caused by a vehicle in your fleet, the fleet policy will cover any damage costs regardless if there is damage to the vehicle or not.
• Damage to other vehicles: Also known as third-party insurance, if you or another vehicle in your fleet has been in an accident involving another person, the costs can be covered by the fleet policy.
• Theft: On average, a car is stolen every 11 minutes in Australia. When you have comprehensive fleet insurance coverage, you would be able to replace any stolen or broken-into vehicles.
• Storm, hail, flood, and fire: With how common storms, flooding, and bush fires are in Australia, when you get fleet insurance you can rest assured knowing your car is insured for any natural disasters.

Though whether or not these policies are included in every insurance policy varies between insurers and can vary depending on your businesses needs. At Morgan Insurance Brokers, we insure for all of the above and make sure your assets are properly protected.

Why should I Insure my Fleet with Morgan Insurance Brokers?

When you get fleet insurance with us, we manage all your claims. From the time you lodge the claim and all the way through to the repairs, we fast-track your claims to get your vehicles on the road sooner because we know that every minute your vehicle is not on the road impacts your business.

We know getting your vehicle back on the road is important, so we make sure we prioritise same-day responses to all our fleet clients for speedy resolutions and to minimise business delays and disruptions.

Comprehensive insurance coverage, excess free windscreen claims, and automatic additions (automatic purchasing of new fleet) are some of the key benefits of insuring with us. We know the administration and paper work that goes into small business insurance claims over damaged vehicles or property, so we handle all of this for you.

Depending on the size of your fleet and the Insurer you choose, there is potential for Insurers to include risk management review in your policy. This would mean Insurers have strategies they can implement to make sure your vehicles stay on the road, minimising the regularity and severity of claims. This means less money spent in the long run and reduces your premiums.

Through insuring your fleet with Morgan Insurance, our specialised fleet insurance brokers go above and beyond for our clients to make sure they get the best insurance possible, but they also get the best service in case of claim lodgements.

Morgan Insurance Brokers work to find the best insurance policies for your business, maximising the protection of your assets. Contact us today and we can discuss your insurance needs with a free and easy consultation.

by Mojo Dojo