The covers that are sections, not policies
In short
- Several well-known covers are not sold as standalone policies at all — they are optional sections inside a broader business policy.
- Which sections exist, what they are called, and what each includes varies between insurers.
- That is why searching for one of them by name produces confusing results: the product being searched for often does not exist in that form.
A business that has just had a shopfront window broken searches for glass insurance and finds a confusing mix of results. The reason is simple and rarely explained: for most Australian insurers, glass is not a policy. It is a section inside a business policy, selected or not selected when the cover was arranged.
The same is true of several other familiar-sounding covers, and knowing which ones changes the question a business asks its broker.
How a business policy is actually assembled
Australian business policies are typically written as a single contract containing a set of cover sections. The schedule lists which sections were selected, and the wording explains what each one does. A business is insured only for the sections shown on its schedule.
Policy documents state this openly. It is common for a business policy to offer somewhere around a dozen selectable sections, and for the documentation to note that not all of them can be taken on their own — some are available only alongside another section.
That dependency is the mechanism behind a great deal of confusion. Business interruption, for instance, generally responds to a loss covered by another section of the same policy, which is why it is rarely sold in isolation.
Which covers this affects
The covers most often mistaken for standalone products are glass, money, theft, machinery breakdown, electronic equipment breakdown and tax audit cover. On the liability side, statutory liability and employment practices liability are usually sections of a management liability policy rather than products in their own right.
Standalone versions do exist for some of these. Specialist agencies write equipment breakdown as its own product, and there are dedicated writers of product recall. Those are genuine exceptions rather than the general rule, and they tend to be aimed at larger or more specialised risks.
The naming is not standardised, and that matters
Insurers do not use the same section names or draw the same boundaries. One will list machinery breakdown and electronic equipment as separate sections; another folds both into a single equipment breakdown section; a third bundles theft together with money. At least one common business policy has no machinery breakdown section at all.
This is why comparing two policies section by section is harder than it looks, and why a broker asking what a business wants covered will often reframe the question in terms of the events to be insured rather than the section names.
It is also why a definition of one of these covers that claims to describe the whole market should be treated carefully. The honest answer is that it depends on the wording, and the wording is the document to ask for.
What people get wrong about it
The first error is assuming a cover exists as a product because it has a familiar name. Searching for it produces broker pages built around the search term rather than around a policy, which reinforces the impression.
The second is assuming a business pack automatically includes everything in the list. It includes only what appears on the schedule, and sections not selected are simply not there — which is discovered, reliably, at claim time.
The third is comparing two quotes on price without comparing which sections each one contains. Two policies for the same business can differ by several sections, and the cheaper one is frequently the narrower one.
Questions
- How do I find out which sections my policy includes?
- The schedule lists them. It is the document that names the insured, the period of insurance and the sections in force, and it is the thing to ask for rather than the certificate, which summarises far less.
- Can I add a section mid-term?
- Adding or removing a section is an alteration to the policy and is handled by the insurer or agency, usually through the broker who arranged it. Whether it can be done partway through a period of insurance, and on what terms, is a question for whoever issued the policy.
- If glass is not a policy, why do search results say otherwise?
- Because pages are frequently written around the phrase people search for rather than around how the cover is actually sold. The product being described is nearly always a section of a broader business policy.
Sources
- Moneysmart (ASIC) — The regulator’s consumer site. A starting point on insurance documents generally, not a definition of any particular policy.
- ASIC Connect — professional registers — The authoritative record of who holds an Australian financial services licence and who is appointed as an authorised representative.