EOFY insurance checklist for small business owners: Brought to you by NRMA

Get your business insurance in shape before tax time with this practical guide brought to you by NRMA Small Business Insurance. They’ve outlined key steps to help you review your coverage, maximise deductions, and stay protected as the financial year wraps up.

Key steps to prepare for EOFY with business insurance

1. Review your insurance policies
   • Take the time to review all your current insurance policies. Ensure that your coverage is up to date and aligns with your business needs. This might include general liability, professional indemnity, property, and business interruption insurance.
2. Update your coverage
   • If your business has grown or changed over the past year, you may want to update your insurance coverage. This could involve increasing your coverage limits or adding new types of insurance to protect against emerging risks. For example, adding on business interruption due to an insured event.
3. Document your assets
   • Keep an accurate record of all your business assets, including equipment, inventory, and property. This documentation is crucial for making insurance claims and ensuring you have adequate coverage.
4. Assess risk management practices
   • Evaluate your current risk management practices and identify areas for improvement. Implementing better safety measures can reduce the likelihood of incidents and potentially lower your insurance premiums.
5. Check for tax-deductible premiums
   • Remember that the premiums you pay for business insurance may be tax-deductible. (Claiming a tax deduction for other operating expenses)
   • Ensure you have detailed records of all insurance payments to claim your deductions.
6. Prepare for potential claims
   • Review the process for filing insurance claims and ensure you have all necessary documentation readily available. This includes photos, receipts, and detailed records of any incidents that may lead to a claim.
7. Consider consulting with insurance professionals
   • You may choose to seek advice from insurance brokers or advisors to ensure you have the right coverage for your business. They can help you identify any gaps in your insurance, recommend and negotiate coverage if needed.

How insurance plays into tax time

Insurance is not just a safety net for your business; it can also have an impact at tax time. Here’s how:

• Business interruption insurance: If you have business interruption insurance and have received payouts due to a covered event, these payouts may need to be reported as income. However, the premiums paid for this insurance may be deductible, helping to offset the tax impact.
• Vehicle insurance: If you use a vehicle for business purposes, the insurance premiums for that vehicle may be deductible. Vehicle insurance can include coverage for accidents, theft, and other damage.
• Product liability insurance: If your business manufactures or sells products, product liability insurance can help protect you from claims related to product defects. The premiums for this insurance may be deductible, helping to reduce your taxable income.
• Professional indemnity insurance: For businesses that provide professional services or advice, professional indemnity insurance can help protect against some of the particular risks you face. The premiums for this insurance, which often helps cover legal costs and damages from claims of negligence or mistakes, may be tax-deductible.
• Home-based business insurance: If you run your business from home, you may want additional coverage beyond what may be included in your standard home insurance. Premiums for home-based business insurance, which can help cover business equipment and liability, may be tax deductible.

Time to get your business insurance sorted for EOFY

Don’t wait until the last minute to prepare for EOFY. Start organising your records and reviewing your finances today. NRMA Insurance is here to support businesses. Visit https://www.nrma.com.au/business-insurance or call 132 818.

Information provided in this article is of a general nature and does not consider your personal situation. It does not constitute legal, financial, or other professional advice and should not be relied upon as a statement of law, policy or advice. You should consider whether this information is appropriate to your needs and, if necessary, seek independent advice. This information is only accurate at the time of publication. Although every effort has been made to verify the accuracy of the information contained on this webpage, MYOB disclaims, to the extent permitted by law, all liability for the information contained on this webpage or any loss or damage suffered by any person directly or indirectly through relying on this information.

This is general advice only and does not take into account your individual objectives, financial situation or needs (“your personal circumstances”). Before using this advice to decide whether to purchase a product, you should consider your personal circumstances and the relevant Product Disclosure Statement. Product Disclosure Statement and Target Market Determinations available from nrma.com.au. Insurance issued by Insurance Australia Limited ABN 11 000 016 722 AFSL 227681 trading as NRMA Insurance.