Running a business has never been easy. And, in today’s increasingly volatile environment, it’s more important than ever to ensure your business is properly protected in more ways than one.
It’s worth spending some time reviewing three key areas: insurance protection, risk management and succession planning.
INSURANCE
Review your policies
At a minimum, your business should have both compulsory insurance (such as workers’ compensation and public liability cover) and additional cover for risks such as property damage, theft and natural disasters.
It’s also important to ensure your insurance cover is up-to-date and reflects any operational or staffing changes since the policies were taken out.
Fluctuating asset values make it essential to regularly review policies to ensure you are not underinsured or overinsured if the worst happens.
Other common insurances
Even when you hold policies covering traditional business risks, there are other potential events to consider.
Management liability insurance protects private companies, its directors, and managers from personal and corporate financial loss arising from mismanagement, governance mistakes, or any employment disputes. While Professional Indemnity (PI) insurance protects businesses against financial losses from claims of negligence or breaches of professional duty.
Cybercrime is another high-risk area and may warrant dedicated insurance cover.
Personal cover for business owners
It’s also important to have protection if you cannot work for some reason.
Options for personal insurance include death cover, trauma insurance for specified serious illnesses or injuries and income protection insurance.
These types of personal insurances not only protect your business, but your family as well should the unthinkable happen.
Consider key person protection
Protecting your business also means planning for the loss or incapacity of key employees.
Key person insurance compensates the business for financial losses arising from the death or extended incapacity of an important staff member, for example; the loss of a sales representative who generates revenue for the business.
Lump sum payouts from these policies can be used to offset costs and losses incurred by the business (such as recruiting a successor and a temporary loss of revenue).
RISK MANAGEMENT
Identify potential threats
Another important way to safeguard your business is by developing a detailed risk management plan (RMP).
Risk management plans identify and outline potential risks that could affect your business and help ensure you are ready to act if they do occur.
Your plan needs to be regularly reviewed as the business evolves. Review triggers can include changes such as moving premises, entering a new market and increasing your workforce.
Undertake a risk assessment
The initial step in creating a RMP is assessing and identifying the type and level of risks your business faces and the likelihood and consequences of these risks occurring.
With a clear understanding of your risks, you are much better placed to introduce systems and processes to manage and minimise these risks and to document your planned responses if they eventuate.
SUCCESSION PLANNING
Start planning early
Effectively, planning for the future is essential to the continuation of your business, as a recent NAB study found nearly half of SME owners expect their retirement to trigger business closure, liquidation or forced sale.i
Starting the succession planning process well before it’s required, helps ensure the process will be smooth and protects the business and staff from upheaval or continuity risk.
Business.gov.au provides a succession planning template to help you get started.
Regularly review your plan
A detailed succession plan needs to be regularly reviewed to ensure it still reflects current market conditions and whether nominated successors remain suitable.
Consider whether gradual and planned handover of responsibilities to in-house successors would help smooth the transition and reduce continuity risk if decision-making is currently centred on one person.
Also consider potential tax risks from unexpected disposal or transfer of business assets following a succession event, as this is one of the ATO’s targeted focus areas.ii
If you need help or guidance on how to protect your business, please contact our office.
Tips for cybersecurity risks
Cybercrime is increasingly targeting small businesses, particularly as more rely on cloud-based platforms. According to an Australian Cyber Security Centre (ACSC) report, 43 per cent of cyber-attacks in 2024 targeted small businesses. Average recovery costs for affected businesses exceeded $40,000, highlighting the importance of strong protections and recovery plans.iii
Common cyber risks for small businesses include:
Ransomware attacks
Phishing emails targeting staff
Scam emails and text messages
Data breaches involving client information
Insecure payment systems
Malicious software
A good place to start assessing your cyber risks is the ACSC’s online Cyber Health Check Tool. This free tool helps you complete a basic cyber security assessment for your small business (or not-for-profit) if you are unsure what to do. The assessment takes less than five minutes to complete and is anonymous.
Strategies to handle your cyber risks:
Turn on multi-factor authentication (MFA)
Implement access controls
Train your staff in basic cyber hygiene
Update your software
Secure your network and external services
Harden your website from hackers
Use reputable cloud platforms
Implement a regular backup schedule for all business data
Develop an emergency plan for cyber incidents
Consider obtaining cyber insurance cover
Hire IT professionals to run a risk assessment
Reset your devices before selling or disposing of them
Keep your devices locked and physically secure
Source: Australian Cyber Security Centre
i Planning for life after business | NAB
ii Areas of focus 2025–26 | ATO
iii Annual Cyber Threat Report 2024-2025 | Cyber.gov.au
