Protecting Your Business with the Right Insurance

Every business faces its own set of risks, making having the proper insurance coverage an absolute necessity. Regardless of the type of business you own, it can potentially mitigate the costs of damages and lawsuits, safeguarding the livelihood you’ve invested significant time, effort, and money into building and maintaining.

Because there are many ways to configure your insurance coverage, you may need more than one policy, and the ones you choose will depend on factors such as your industry and number of employees. Here are some of the most common options to review with a licensed insurance agent to get a better sense of which may suit your needs best.

Business owner’s policy (BOP)

BOP is essentially the umbrella policy for business property and general liability insurance, both of which can help protect your business from financial loss due to various events. Each of these coverages can also be purchased as separate policies as desired.

Business property/hazard insurance
Although many states do not require businesses to carry hazard insurance, it is still an essential policy to have since it may cover the replacement costs for equipment and inventory due to theft, fire, wind, lightning, or other natural disasters. (If you’re a home-based business, be aware that your private homeowners insurance may not provide enough coverage for these events.)

General liability insurance (GLI)
GLI, also known as business liability insurance, provides coverage for claims made against you. These could involve allegations of bodily harm, property damage, reputational harm, privacy violations, or advertising injury like copyright infringement.

Business income insurance

This policy operates as business interruption insurance, aiming to compensate for lost income in the event of a temporary closure caused by an incident that hinders your business’s ability to operate, such as theft or fire, smoke, or water damage. The coverage lends financial support to pay your mortgage or rent, taxes, or other loan payments until you’re able to reopen.

Commercial auto coverage

You should consider obtaining a commercial auto policy if your company utilizes company-owned or leased vehicles driven by employees, if an employee uses their personal vehicle for business purposes on behalf of your company, or if you frequently need to rent a car for business-related activities. An especially valuable coverage to get is personal injury protection, which covers accidents irrespective of fault. For instance, should an employee accidentally injure someone in a car accident while driving the company car, your insurance may assist in paying for any medical bills.

Data breach insurance

Your business is at greater risk of being hacked if it handles sensitive data like credit cards, health records, or other personal customer information. Data breach insurance acts as a safety net for your company should any of this data be stolen or lost. It may cover crucial expenses like investigations, credit monitoring for victims, or legal defense against possible lawsuits, helping protect your business’s financial well-being and reputation.

Employment practices liability insurance (EPLI)

While not mandatory, EPLI can potentially mitigate significant out-of-pocket costs due to lawsuits filed against you or your company by job candidates or current or former employees. Such grievances could include allegations of sex, age, or race discrimination, harassment, or wrongful termination.

Smaller or newer businesses in particular should strongly consider getting EPLI; because they lack the in-house legal support and comprehensive employee handbooks common in larger corporations, they often face increased vulnerability to legal claims. This policy could help them surmount the financial challenges associated with securing legal representation should it be needed.

Professional liability insurance

Also known as errors and omissions (E&O) insurance, this type of policy provides coverage if you’re taken to court over alleged mistakes or negligence in your professional services. For instance, a client may sue you for misrepresentation, meaning they believe you gave information or advice that caused them financial loss or harm. An outside company could also sue you for an injury such as copyright infringement, claiming that your business used their protected work without permission. E&O insurance may assist with legal fees, settlements, and other expenses in any of these instances.

Workers’ compensation insurance

Most state laws require businesses to have workers’ compensation insurance for work-related injuries or illnesses. These policies help pay for some of the employee’s lost wages, medical care, and ancillary services that assist in their recovery. In addition, the coverage may provide disability benefits for those in need of more time to recoup and contribute to an employee’s funeral expenses as applicable.

Providing a safety net for your company with business insurance is critical. It’s not just about financial protection—it’s about safeguarding your reputation, your employees, and the future of your business.

TAKE ACTION:
Contact a certified insurance agent, who can assist you in understanding and exploring the diverse array of plans to identify the ones that align with the needs of your business.