How Do I Insure My Business?

How Do I Insure My Business?

Last Updated August 2017

As a small business owner, protecting yourself against liability can ultimately mean the difference between success and failure. With the increasing exposures business owners face today, it is important to understand the insurance options out there and how they will cover your company.

Do you know what types of insurance products you will need?  I have a Commercial General Liability policy, what else do I need?

The reality is, a Commercial General Liability (CGL) policy or even a Business Owners Policy (BOP), may not be enough.  Having a clear understanding of your operations will help to identify the potential exposures and address them with the correct insurance policy.  Of course, you should always consult a Blankit Insurance Professional to ensure proper protection.

 

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Property Insurance

The most obvious exposure for a business is the business property, equipment, and assets.  Understanding what is covered and how your commercial property policy will respond, could mean the difference between temporary and permanent closure. For example, how would your business survive if a fire or hurricane destroyed your property?

The property coverage in a business insurance policy can help protect the actual building in which your business is housed, as well as inventory, equipment, furnishings and other property you have there. According to the Insurance Information Institute (III), other covered costs may include, equipment breakdowns, the cost of removing debris after a covered loss, as well as business expenses during covered interruption periods.

 

Liability Insurance

Despite your best efforts to mitigate risk, you may still be faced with a lawsuit claiming damages for liability. The U.S. Small Business Administration (SBA) outlines three common types of liability insurance for businesses:

General liability coverage: Also known as “Slip & Fall” Insurance, this type of coverage protects you in the event you are sued because of accidents or injuries resulting in a negligence claim. For example, if someone is injured on, or in some cases off-premises of your business, and files a lawsuit against you, this type of coverage may (depending on the situation) cover some or all of the related costs.

Product liability coverage: The coverage is intended to protect manufacturers and distributors of products, in the event the product is defective and causes injury or damage.

Professional liability coverage: Service based businesses often purchase this type of coverage, which protects against errors and omissions as it relates to their expertise.  As an example, doctors, lawyers, architects & engineers, insurance agents, real estate agents, and consultants, just to name a few.

 

Employer Related Insurance

Depending on number of staff members, and structure of the organization (as well as other factors), there may be other insurance policies to consider.  Employment Practices Liability, for example, helps protect the business in the event an employee was to sue the employer for any employment-related issues such as; discrimination, harassment, wrongful termination, and in some cases wage and hour issues.

In addition, according to the Insurance Information Institute, all states (except Texas) require businesses with a certain minimum number of employees (at least three to five, depending on the state) to have workers compensation coverage, which may help protect the employer in the event an employee injures themselves during the scope of business.

 

Business Auto and Garage Liability Insurance

Similar to personal auto insurance, businesses also have vehicles they must insure while in stored and in operation. Depending on your business, there may be additional coverages such as a Garage Policy for vehicles while they are in your care, custody, and control.  The business auto policy is intended to protect the business against liability arising from your company’s vehicle(s).

 

Network and Data Breach Insurance

Better known as Cyber Liability Insurance, data breach coverage helps protect your business from unwanted and unwarranted access of confidential/private information.  This could include stolen credit card information, compromised client or employee records, and in some cases confidential business information.  The intention (depending on the type of policy) is to cover the costs associated with a data breach event such as IT forensics, notification costs, public relations, and liability.

 

Other Considerations

Many factors should be considered when searching for the appropriate coverages.

For instance, if you run your business from home, typically your homeowner’s insurance policy will limit or exclude coverage for business property, including tools and equipment used in the course of business as well as customer property while being repaired. There are business owner policies designed specifically for home-based businesses.

There may be even more business insurance options to consider in addition to those covered throughout this article. It is important to talk to your Blankit Insurance Professional when determining the appropriate coverages and adequate limits.

 

By Chris Orletski

 

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