Kristy: [00:00:00] Hello Boss, and welcome back to the Run Your Business Like a Boss podcast. Today I'm joined by special guest Casey Fenton, who is the founder and managing director of Sparksure. Sparksure provides smart and simple insurance solutions for millennials by millennials. Casey has rich and deep experience when it comes to understanding the nitty gritty of insurance policies and negotiating with insurance companies on behalf of small business owners.

If you do not have insurance for your business, then I encourage you to listen to this episode. This is the one investment that you absolutely need to make in your business, but I also get that it can feel deeply overwhelming and confusing to know what you need to do in order to adequately cover your business.

I brought Casey on to demystify and simplify this process to help you understand the types of insurance that you should have in place for your business and to [00:01:00] help you to make a more informed decision when it comes to insuring your small business. Are you ready? Let's go.

Casey. Hello. Welcome to the Run Your Business Like a Boss podcast. I am so excited to have you here with us today.

Casey: I am just as excited. Thank you so much for having me on. I'm, I'm really keen to, um, provide some insight into the world of insurance for your listeners.

Kristy: Yes. Just before we hit record today, we were [00:02:00] talking about how it can sometimes feel a little bit overwhelming the whole insurance space, not knowing where to start. And I think some people just put their head in the sand when it comes to insurance. So I'm really excited for us to just get this out into the, into the world.

And for any business owner, who's listening to this today to really have a little bit of a clear view on what to do next when it comes to business insurance. So insurance may not be the sexiest of topics. I totally get that, but it really is an important one. And I want to kick this conversation up with you just sharing with us your thoughts on why is it important for every business owner to have business insurance whether they're a company or whether they're a sole trader and specifically what are the risks to the business if they don't take out business insurance.

Casey: Yeah, of course. Um, it is one of those things. Unfortunately, insurance, is something that you might not always see the [00:03:00] value in upfront, um, because it is, uh, something that's quite, uh, reactive in the sense of, um, you know, you don't necessarily get anything out of it unless you, something goes wrong and you need to make a claim.

Um, so I suppose it's really important for businesses to consider that when running a business, mistakes do happen and things do go wrong and it's about thinking about whether or not you are in a financial position to be able to cover the costs associated with potentially, um, you know, fixing that error or, um, you know, having legal, um, proceedings commenced against you and whether you can cover the cost for the legal proceedings and whether or not, there's a, you know, lump sum payment that you're required, to make in, in that regard.

So I think a lot of people, don't realise, or perhaps, um, may have forgotten that, um, yeah, an insurance policy actually covers the, the legal costs as well. So, it's definitely really important for businesses to consider that, especially when, you know, how [00:04:00] long is a piece of string? It might be a minor mistake that, you know, might cost a couple of hundred dollars for you to rectify and you can, you might be able to do that yourself.

But if it's something more serious, we could be looking at really large amounts. And then could that potentially be, you know, some of your personal assets that are, you know, on the line in terms of your house and, and those sorts of things. Worst case scenario, of course.

Kristy: Yeah. And I think we have to always think in worst case scenario when it comes to these sorts of things.

Casey: Yeah, with running a business that's, we know we have to sort of, um, think about the issues that we might be facing and, and how we're going to, uh, respond to those or overcome those or prevent those or, you know, whatever it might be.

Kristy: Yeah, it might not be fun to think about risks and it might not be fun to think about worst case scenarios, but it's a little bit like any of these big things in our life, whether it be our house, whether it be our car, whether it be our life insurance, our health insurance, and also our business insurance. Obviously, no one wants to have to [00:05:00] use their business insurance, but that peace of mind of knowing that it's in place to cover you so that you're not going to need to draw upon your personal assets is, I think that far outweighs any cost of a policy without a doubt in my mind.

Casey: Correct. For sure.

Kristy: With that in mind, I'd like you to step us through, what is the critical insurance policies that in your mind, every business owner should have in place?

Casey: Okay, so I wish that question could be, well, I wish my response to that question could be super black and white. Unfortunately, it's not. It will vary from business to business because different businesses have different exposures. But if I can try and simplify it, you know, as much as possible, generally, the policies that I would recommend as a minimum, and again, this depends on your business. For example, one, workers compensation insurance. This is only applying to businesses that either employee staff [00:06:00] or engage in certain types of subcontractors for that business. So if you're, um, a business that's just a one woman or a one man show, then works compensation might not be something that you need, but if you are, um, employing staff or have subcontractors on board, that actually could be a legal requirement for you to have that policy in place.

Now workers compensation is a little bit of a niche policy in the sense that each state is actually different and each state has a different regulatory body monitoring that policy and the way that it's issued and who handles it as well. In some states like here in WA where I am, uh, brokers do deal with those policies.

Whereas in some states where you are, for example, um, Kristy in Queensland, that's actually handled directly through the government. So that's something to keep in mind. And that is one of those non negotiable, um, policies, if you sort that [00:07:00] category of having some extra hands to help you run the business and keep the wheels turning.

Following that, I would mention public and products liability insurance. So this is a policy that generally all businesses should have in place. And again, dependent on the type of business that you're running, your risks and exposures with regards to that insurance will vary. And the reason that I say that is because public and products liability insurance protects you in the event that you are held responsible for either personal injury to a third party, so that could be a member of the public that could be a customer or damage to a third party's property. Again, that would be potentially a customer's and other business owner's property. So, service based businesses like mine, we're very low risk in that regard because me as being an insurance broker, you know, the chance of me injuring somebody or damaging [00:08:00] someone's property is really low.

I still have the cover in place because it protects me in certain circumstances when I might be having face to face meetings with clients, face to face meetings with other businesses, uh, or other people in my network, attending networking events, workshops, working remotely from a co working space, if I choose to go and, um, you know, change my scenery for the day and go and, um, enjoy another place to work from, it's going to protect me in that event.

You know, sending thank you gifts to clients and people in my network. It's also protecting me with that regard. So businesses with a high higher risk in relation to public and products liability would be product based businesses. So e commerce businesses that are sending physical products out to their customers, or businesses who have a physical shop front or have a lot of, you know, foot traffic coming through, so to speak. So think about cafes, beauty salons, um, those sorts of things. So, again, Still a [00:09:00] really important cover to have because how long is a piece of string in terms of when we're talking about injury to somebody?

Property damage is a little bit easier to gauge I suppose when we know that you know the type of property that we're coming into contact with but personal injury is a different one. You know, it could be something as simple as a laptop cord being left, um, you know, in the cafe or the co working space and someone tripping over that and having quite a serious neck injury or something along those lines.

Again, that is like, you know, catastrophic worst case scenario, but that's something to consider and something we should be thinking about. So that we've covered workers compensation, public and products liability. And then the third policy that a lot of businesses that I particularly deal with and I think a lot of the emerging businesses nowadays, um, it would be professional indemnity insurance.

So this is your service based businesses predominantly, who are providing professional services and advice. So big exposure for me as an insurance broker. [00:10:00] I'm constantly on a day to day basis providing my clients with advice on insurance. Um, so it's really important that I have that professional indemnity insurance in place in case I make an error.

Um, and I will stick my hand up, um, and, and say that I'm not perfect. Um, and I do make mistakes and I have had make, have made mistakes in the past. Um, but there's that confidence there. I mean, I'm, I'm pretty confident in being able to come up with a resolution myself, but you know, that worst case scenario, if I have told a client that I've put a policy in place for them, and then for whatever reason I haven't put the policy in place, it's, you know, slipped through the cracks somewhere, and then that client then has a claim, um, obviously, going to be a big problem for me, and I've got professional indemnity insurance in place to protect me in those regards.

So again, that's a policy that, for some businesses wouldn't apply because they're not needing, um, coverage for any advice because they're not providing advice. But that probably my sort of top three as a minimum that we should be looking at all of [00:11:00] those three and thinking, do we have an exposure here? Yes, no. And then moving our way through.

Kristy: That is such a good question to ask is, you know, what is my exposure here? And I think that I'm just going to circle back over a few of the things that you just mentioned, the workers compensation insurance, and the fact that that is different across states. And, you know, if you do have a team in place, whether it be subcontractors or what have you, then that could be a legal requirement for you.

So, if you don't have that in place and you do have people that are working for you inside your business, that's definitely something that must be at the highest priority. And so then also you mentioned public and products liability insurance. And I love the fact that you were describing toggling between both a product based business as well as a service based business on this one.

And, you know, obviously no one expects that they're going to trip on a laptop cord, but the fact is, is that if you are going into these coworking places, or if you are meeting clients in public places, and I think a lot of these places, even if you're doing a photo [00:12:00] shoot, you're often asked for your public liability insurance anyway.

So, you know, having those things in place is absolutely critical. No one would want to be in a situation where something has inadvertently happened. No one is going to intentionally try and do that for a client or yourself for that matter. So you know, having that protection in place is so important.

And then the professional indemnity. I think this one really does apply to a lot of my listeners. There are some e com clients here, but there are also, uh, you know, a lot of service based businesses. So if you are offering that service, having that professional indemnity in place, because to your point, Casey, you know, people make mistakes, maybe things are misinterpreted or, you know, we just can't, we can't know what's going to happen, right? This is all about protection.

Casey: For sure. And I think that, from what I see with claims when it comes to professional indemnity insurance is sometimes it's not even, um, you know, making an error or, you know, providing incorrect advice in some cases where we can see claims arise at one when I say in some cases, [00:13:00] a lot of the time, it's from lack of advice.

So you should have advised me this or you should have you know, um, elaborated on this more. So in some cases it's actually the advice that you don't provide that could potentially, um, you know, see you in some trouble.

Kristy: Yeah, good point there. So lots of food for thought there. What other policies do you think is important to consider for online business owners?

Casey: Okay. So if we're talking specifically online business owners, um, and definitely a big one out there at the moment is cyber insurance. Um, you know, in a perfect world, I would have loved to have popped that in with sort of the other three policies that I mentioned because of the way that the world's going and what we've been seeing happening in this space lately. It's, it's been claimed upon more and more. Um, but I am also conscious of the fact that businesses do have budgets. Um, so I do try and sort of, when I'm talking with my clients or potential clients, we sort of create like a little bit [00:14:00] of a hierarchy in terms of the insurance policies and, you know, need to have legally, really should haves and then some nice to haves in there as well. So, uh, cyber insurance, each business has varying exposures dependent on what sort of services that providing, what sort of client information they're holding, because we do obviously nowadays, privacy is a huge one. So, um, we are required to take certain precautions to make sure that any, uh, personally identifiable information that we hold on file is kept safe.

And then if there is a breach with that information, there's certain steps that we should be taking to basically notify people and, and deal with that, according to the law. So the cyber insurance is really important from that aspect because, by having that insurance policy in place when something does go wrong, when there is a privacy breach, you actually got the advice, of the experts, um, from the insurance company to help [00:15:00] you, um, handle that situation.

And then those costs are also actually covered by the policy as well. Um, so it's, it's like a side of the liability, exposure, that part of the policy. And then I suppose, um, the other aspect is the things that we see, um, in the media all the time. And this is where businesses are actually hacked, um, and have information stolen.

Finance, you know, finance is stolen, all that tricked into transferring, um, funds to some hacker sitting in Siberia impersonating one of your usual suppliers, um, or one of those usual businesses that you're paying on a regular basis. So what they call the socially engineered theft is a huge, um, exposure on the rise lately.

And at the end of the day, I think most of us like to think we're pretty savvy when it comes to, um, picking up on those scam emails and phishing emails. Um, but I will say, you know, there are specific crime rings out there that actually this is, this is actually their job. That's [00:16:00] what they're there to do.

So they do a pretty good job at making things look really legitimate. That's probably 10%. 90%. You know, you can see them as soon as they come through to your inbox, you know, to report it, delete it and get rid of it. But the other thing to also consider is we again, we do have bad days where we might miss something and we might click on a link that we perhaps shouldn't have.

And also if we've got a team as well, we've got to keep in mind that basically when you've got a team, unfortunately, there is, I suppose, a little bit more, um, of a risk of something going wrong because we've got more people, um, doing the things. Um, so when there's more people doing the things, yeah, the chance of something happening, um, increases because that's a little bit more out of our control when we're sort of talking about a business that's a one man or a one woman show. We like to think we're fairly in control of ourselves, but we can't, you know, unless we're sort of helicoptering all of our team, we can't make sure that everything's done correctly, um, 100 percent of the time. But that, that is a big exposure, just the cybercrime [00:17:00] side of things and, you know, identity based theft and all those sorts of nasty things that we see happening.

Kristy: Yeah, I think, you raise a really valid point around the team as well. So I think that that's something that if you're hiring a VA or if you've got an in house support person who is reviewing your emails, we might be more discerning and cautious than perhaps, you know, that person might be. And like, like you said, mistakes happen, and I watched this documentary on Disney. I think it was of this American reporter who traveled all around the world for different types of crime. And one of the crimes was what you were talking about before, the hacking side of things, and it is, it is a full time job. These are organisations with a lot of backing behind them, a lot of data, and they're getting more and more and more savvy around how they're delivering, you know, this information to us that it is becoming more and more difficult to discern. I got something the other day from MyGov, and I was like, Oh, [00:18:00] that's interesting.

I jumped straight onto the website on my PC separate to the text. And then I realised that there was no email there, that that would have definitely been, had I've clicked that link, goodness knows what would have happened.

Casey: Yeah, and I think as as I mentioned, we all like to think that we're pretty good at making sure we've got the right protection measures in place and we're doing the right things. But if you look at, you know, massive organisations like Apple, Google, Optus, who are huge organisations who would have the largest security protections in place that you can possibly have, and they get hacked.

Um, so in now, you know, in this day and age, I think it's one of the, it's, it's not if you get hacked, it's sort of when you get hacked, um, unfortunately, because if those organizations are compromised, then, um, you know, little old us sitting over here in comparison to those organizations if, if we're targeted and someone wants to get in, yeah, it's likely to [00:19:00] happen, unfortunately.

Kristy: You're busy, right? Like Especially if you are a one woman band and you're trying to do all the things and, you know, you just, you're just scrolling through trying to get through your inbox and you just haven't quite registered that that might not be legit. It looks and smells and sounds and feels like the real thing and yeah, to your point, if large organisations can have it, we are certainly just as much risk, if not more as small businesses. Okay, so what would you say to someone who doesn't have the budget for insurance? What would be like your headline act on that one?

Casey: And I think that when when people make that comment that they don't have the budget for insurance, I think that's definitely an indicator that insurance has been an afterthought in the process of getting the business set up and it's one of those things, unfortunately, that it really needs to be considered as a fixed business expense when you are in the stages of planning a business [00:20:00] or getting set up. If you have Um, got everything under, you know, underway and then insurance has been an afterthought, which does happen. So if you're a listener who falls into that category, you're certainly not alone. I, I see it a lot. It's, it's not too late, but if you feel as though you don't have the budget for the insurance policy, or insurance policies, then perhaps you sort of need to think about, well, do you have the budget to protect yourself or to cover the costs if something were to go wrong? Because, you know, you might be in a circumstance where it's alleged that you've made a mistake and you might not have actually made a mistake but there could just potentially be some legal costs  associated with defending what they’re holding you liable for, and if you’ve got an insurance policy in place, the insurance policy will actually cover those defense costs. So when you’re thinking that you don’t necessarily have the budget for insurance, do you have the budget to cover the legal costs or the legal expenses if something [00:21:00] were to go wrong?

Um, and I think that's also if you are worried about budget, it's really important to be having that conversation with an insurance broker so that you can sort of create that hierarchy of, um, you know, need to haves versus nice to haves, and then also talking about potentially some ways that we can look to reduce the premium.

Having that conversation and, and at least it's a bit more of an informed decision if you still feel as though you don't want to pay the insurance premium, at least you've had conversations where you're making an informed decision, as opposed to sort of just looking at the dollar side of things initially and making a decision based on that purely.

Kristy: Yeah, there's a lot to consider and I think that I like the way that you said, look at it like a fixed business expense rather than, you know, just like I'm doing well now is the time to get insurance in my business. You know, it is something that needs to be looked at from the get go, and it's not something that you do once [00:22:00] you're, once you've grown, or once you're growing, it is actually something to your point that you want to put in place in the very, very beginning.

And it's just part of the cost of running your business. And I think that, you know, we, we spend so much money on subscriptions. I think I could pretty much speak for every one of the people who are listening, the business owners who are listening today. I can guarantee that there are a lot of subscriptions that go out, and that's just part of running their business.

And it's the same with insurance. This is just part of the operational costs of running your business. And that peace of mind, you wouldn't not insure your car. You wouldn't not insure your house. And I look at it as much the same as that. So what are the, what are the steps that a business owner would take if they haven't taken out insurance to this point, or even if they've, you know, used a different broker, what are the steps that you take your clients through including the payment options and things like that?

Casey: Definitely. So it's all about having a bit of an initial conversation. Um, you know, potential new client, um, like any sort of business, [00:23:00] relationship it's a matter of, um, getting to know one another a little bit and making sure that it is going to be a good fit. I will certainly, um, stick my hand up and say that there's, you know, 5 percent of the time I might be talking to somebody who is in the very early stages of business, who is very, very low risk in terms of something going wrong, who is very, um, concerned about budget. I'm going to have that conversation with them about what I think they need to have in place, but in some cases I might not be the best option for them.

You know, it could mean that they might be better off going to a direct market insurer, because of that, what their needs are in that, at that point in time. Um, but in most cases, um, that that's not usually the case, but that does happen and yeah, it's about having that conversation, me getting to know the business.

Generally speaking, most businesses, I can sort of give some ballpark figures of what they're going to be looking at premium-wise. And then once we've sort of, um, worked our way through that, [00:24:00] it's a matter of me then getting to know some specifics about your business so that then I can go away and work on some options for you, come back to you with those options.

Um, it might just be from one insurer. It could be multiple insurers dependent on the situation, but I think this part here is the key and that's being able to have that conversation and explain what is actually being put in front of you. I'm sure plenty of us have probably purchased an insurance policy, maybe direct with an insurer, and they've had the policy schedule come back to them and they've sort of go, okay, I can tick the box to say that I've got insurance, but I have absolutely no idea what any of this means.

Um, and you might not particularly understand certain conditions or restrictions that the policy may have, or some of the exclusions. Um, so that's a really a good time for us to discuss all that, and then I can answer questions. And I think at that point in time, um, I generally feel as though that the clients that I'm speaking to are really comfortable in asking questions.

Um, because I think when it comes to insurance, some people can be a little bit shy [00:25:00] in asking questions because they feel as though they should know the answer to it. But they don't, you know, step back and not ask the question. But I think it's about having that really comfortable relationship and knowing that the person that you're speaking to actually understands your business on the other end of the phone.

Then if need be, we might need to make some changes or tweaks to the options that I've provided, depending on what we've discussed in that situation, in that conversation. And then it's a matter of me putting the policies in place. We have some, uh, a document that is just checked over to make sure that the information that I've given the insurer is correct.

We sign off on that. And then we talk about payment options. So clients have got the option to pay that premium upfront in full. Otherwise, for, you know, cash flow purposes, we do have installment plans available for the policies as well.

Kristy: Yeah. And I'm a big believer of outsourcing to people that know more than I do. I don't have the time to invest in looking into all of these different policies. Nor do I really, it's not going to add [00:26:00] value to my life to learn these things either. So that's why I would prefer to go to the expert, and get that support so that I know that I've got the right policies in place so that I am protected and covered in my business.

So I'd love to hear, you know, your final messages. What have you got to say to our boss who's listening today when it comes to insurance that we may not have touched on in throughout the interview?

Casey: I think as a bare minimum, you need to have a conversation with someone who knows what they're talking about when it comes to insurance so that you've had that conversation. We've talked about what risks and exposures your business faces. What insurance policies are available to protect you, um, you know, in the event that all of your other procedures, you know, that you do on a day to day basis, in case something happens and something falls through with that and something goes wrong, you know what policies you can have there as a backup plan, so to speak.

So I, I always say to my clients, um, and anyone that I'm speaking to, at the [00:27:00] very least, I want you to have a conversation with myself so that you're leaving at least feeling informed, um, so that you can then make that decision. So you may choose, you know, if you're a new client, you might decide that no, I'm happy with accepting those risks and exposures and I'm not going to take out insurance. That is entirely up to you as a business owner. But I at least feel like I've been able to have provided some sort of help and assistance in at least giving you the information that you need to be able to make that decision.

And then for, you know, my existing clients, if we're talking about, you know, the current policies that they have in place and we talk about Policies that they don't have in place that I might recommend again, as long as they can leave that, um, you know, conversation with more information and more knowledge and more power to be able to make that informed decision, then I'm happy.

I'd be much happier if they obviously had put the policy in place, um, but I think, I just don't like [00:28:00] the thought of people just at, like you said, putting their head in the sand and not having all the information in front of them to, to make a decision.

So I think that's, my message is just at least get the education there and then you can decide what steps you take after that.

Kristy: Yeah, good advice. And I think to your point, you know, sometimes people feel silly that they haven't done it. So if you're like in year 6 or year 10 of your business and you've never had insurance, do not let that stop you from reaching out to someone like Casey, because it's really important that you do take action and now is better than never. Right? And at the end of the day, Casey is a professional or your insurance broker is a professional and they've got your best interests at heart. So there's no point in letting your fear of looking silly or being silly or not doing the right thing, not that there's right or wrong, but letting that stop you from doing what's best for you and your business moving forward.

So I think that if [00:29:00] you take away any messages from this podcast episode, it's that investing in insurance broker to get the right insurance in place is going to ultimately support you and your business and give you that peace of mind that I think there's so many different things going on in our business. Whatever we can do to have peace of mind is so powerful. It just takes that stress away, even if it's just a little bit of stress.

Casey: Correct. Yeah, for sure. And I think as well, if you, you know, even after listening to the podcast today and if you are using an insurance broker or you might even be insured directly with an insurance company, if you still don't feel confident in being able to ask them questions or confident in their responses or confident in the fact that you feel that they actually understand your business and understand, um, what it is that you do, then, then that could potentially, um, be the problem there.

You know, it's all about, you know, finding the right fit for you in your business. So, I think if, if that's not there first, it's going to make the rest of [00:30:00] the process pretty difficult. And maybe then you're not going to get that peace of mind that you're, you know, coming to get.

Kristy: Yeah, absolutely. Thank you so much, Casey, for joining us for this conversation. I really appreciate you sharing your wisdom and just giving us a little bit of insight into the world of business insurance. I appreciate you and your time today.

And to you boss, thank you so much for joining us for today's conversation. I do encourage you if you don't have insurance in place in your business, or if you're not sure if you are appropriately covered for your business, head down into the show notes, grab Casey's links and reach out to her today. I hope you enjoyed this conversation. As always, I look forward to chatting with you next week.

This episode was recorded on the land of Killin Darbin. I pay respect and tribute to the Turrbal people who are the traditional owners and caretakers of the land in which this podcast has been created. [00:31:00]