Income protection insurance is vital if you’re self-employed and rely on your income to pay your financial commitments. Unfortunately though for owners of businesses in rural Australia income protection insurance isn’t available. This means if you own a rural business you’ll need to purchase an alternative type of policy that will provide you with some form of income should the worst happen.
Why you need insurance protection for your rural business
Mother Nature is one of the main aspects of the earth that can’t be controlled. Nobody knows what is going to happen tomorrow, or next week, or next month or year. Your rural business might be providing you with a very lucrative income this year, as it might have done since you bought or started it, but what if Mother Nature decides it’s time to clean a few cobwebs away and sends along a disaster that puts you out of business?
Disasters happen in Australia all the time. Most, understandably, aren’t classed as newsworthy because they are nothing more than personal disasters but to the individual or family involved they can spell financial devastation and even the ruin of their business.
For example, let’s imagine you have a rural farm that supplies the local area with several types of vegetables. You’ve worked hard for numerous years to build up a dedicated customer base and as a result your farm has grown as well. But then an unexpected natural or man-made disaster, such as a drought or some kind of major chemical spillage, wipes out your entire crop for one year. There is absolutely nothing you can do to avoid the disaster but your customers are forced to shop elsewhere and you lose your entire income.
What do you do?
If you have previously failed to purchase any type of insurance policy against such disasters then there’s a good chance you’ll lose your rural business and more importantly your income. You may be able to survive on your savings until you can plant and harvest new crops but if not then you’ll be forced to earn a living through alternative employment. Obviously if you buy or start a rural business in Australia then this is your vocation in life and you probably aren’t going to want to move to an urban area to find work and generate an income.
Possible insurance products for rural businesses in Australia
Thankfully there are several types of insurance product available in Australia that can be used to insure your business, your property, your machinery and even your livestock/produce against potential disasters. As mentioned above, it’s impossible to get income protection insurance for rural businesses but with a bit of research you can often insure everything else so that your insurance pay-out is enough to provide you with a cash lump sum to use as income.
Using a rural hotel and camping ground as another example of a rural business you can see how by combining several different types of insurance product you can insure your business to provide you with financial security.
So let’s say you own a large rural hotel and camping ground that is highly popular with hikers and nature lovers. The money you make from your hotel business is your only source of income and you rely on its popularity to cover your financial commitments. Unfortunately an unexplained bush fire leaves your hotel in ashes and your camping ground unusable. You have nothing left of your business and no income to pay your bills or your living expenses.
Thankfully you understood that the weather in rural Australia can be unpredictable and that natural disasters do occur, and as a result you invested in several insurance policies when you bought or started your business. As examples these insurance policies may have included:
- Buildings and contents insurance for rural businesses – depending on the particulars of your buildings and contents policy you might get a pay-out equivalent to the value of your property and its contents, or you might get a pay-out that covers the cost of rebuilding and replacing everything that was damaged in the fire. Either way, you amount you receive from this type of insurance policy will easily be enough to start a new rural business or rebuild the one you lost.
- Vehicle insurance for company vehicles – if any vehicles registered to the business were damaged as a result of the fire then these can be claimed for with this type of policy. Obviously you’ll have vehicle insurance as standard but including damage due to natural disasters is a must in rural Australia.
- Public liability insurance – as a business that has guests on the premises public liability is essential. Even in the event of a natural disaster this type of policy will pay out to replace everything claimed for by your guests if they choose to claim against you.
Buying insurance products for your rural business
Not all insurance products will suit all rural businesses so it’s important to get a professional assessor to visit your business before purchasing any type of insurance policy. Simply asking for insurance quotes when it comes to a rural business isn’t enough because every business has different risk factors. The risks that your business faces will affect the amount of coverage you can get and the amount you pay in terms of premiums so it’s important to get an accurate assessment from the start.
Your insurance assessor will be able to tell you which insurance policies will be best for your needs. If you then buy the types of policy they suggest you should have everything adequately covered with enough left over to provide an income while you decide what to do next.
Losing the business that you’ve worked so hard to build up is bad enough but having to do it with the added worry of having no money coming in can become too much. A few wise purchases though can give you peace of mind and a way to get round the fact that income protection insurance isn’t available in rural Australia.