Please ensure Javascript is enabled for purposes of website accessibility

Category: Commercial Insurance

5 Things to Know Before Securing a Construction Bond

Posted on by Jon Blankenship

Article Overview: Construction bonds protect project owners by guaranteeing contractors meet their financial and contractual obligations. Before securing one, contractors should understand bond types, qualification requirements, costs, the role of surety underwriters, and the added complexity of government or infrastructure contracts, which often carry stricter bonding thresholds.

Government agencies and municipalities don’t hand out infrastructure contracts to just anyone. Before a contractor can even bid on a public project, they typically need to prove financial reliability through a construction bond. This requirement protects taxpayers and project owners from the risk of unfinished work, unpaid subcontractors, or outright contractor default.

For contractors new to public works, the bonding process can feel like a maze of paperwork, underwriting reviews, and unfamiliar terminology. Understanding how construction bonds function – and what underwriters look for – can mean the difference between winning a lucrative government contract and losing it to a better-prepared competitor.

Let’s review five essential things contractors need to know before securing a construction bond, with particular attention to the heightened requirements of infrastructure and municipal work.

What is a Construction Bond, and Why Do Government Contracts Require One?

A construction bond is a three-party agreement between a contractor (the principal), a project owner (the obligee), and a surety company (the guarantor). The surety financially guarantees that the contractor will fulfill the terms of the construction contract. If the contractor fails to perform, the surety steps in to cover losses, up to the bond’s penal sum.

Government contracts almost always require bonding because public projects are funded by taxpayer dollars. The Miller Act, a federal law dating back to 1935, mandates that contractors on federal construction projects over $150,000 provide both a performance bond and a payment bond. Many states have adopted similar “Little Miller Act” statutes for state and municipal projects, often with their own thresholds and requirements.

Unlike insurance, which protects the policyholder, a construction bond protects the project owner and the public. If a contractor defaults, the surety doesn’t simply pay out – it typically works to ensure the project gets completed, either by financing the original contractor’s completion or hiring a replacement.

What Are the Different Types of Construction Bonds?

Contractors bidding on infrastructure and government work generally need to understand three primary bond types:

Bid bonds guarantee that a contractor will honor the bid they submit and enter into the contract if awarded the project. If a contractor backs out after winning a bid, the bid bond compensates the project owner for the difference between the winning bid and the next-lowest bid.

Performance bonds guarantee that the contractor will complete the project according to the contract’s terms, specifications, and timeline. These bonds typically take effect once the contract is signed and remain active until the project reaches substantial completion.

Payment bonds guarantee that the contractor will pay subcontractors, laborers, and material suppliers. This protects smaller businesses down the supply chain from nonpayment, which is especially important on public projects where liens cannot typically be placed against government-owned property.

Choose a bid bond if you’re still in the bidding phase of a project. Choose a performance and payment bond combination once you’ve won the contract and need to formalize your commitment to the project owner.

How Do Surety Companies Determine Bonding Eligibility?

Surety underwriters evaluate contractors against what’s commonly known as the “three Cs”: character, capacity, and capital.

Character refers to the contractor’s reputation, business history, and track record of completing projects on time and within budget. Underwriters often review references, past project performance, and any history of claims or litigation.

Capacity assesses whether the contractor has the equipment, workforce, experience, and management systems necessary to complete the specific project in question. A contractor bidding on a $20 million bridge project needs to demonstrate prior experience with projects of similar scale and complexity.

Capital examines the contractor’s financial strength, including working capital, net worth, credit history, and overall financial statements. Sureties typically request several years of financial statements, often prepared by a CPA, along with current work-in-progress schedules.

Contractors pursuing government or infrastructure work should expect a more rigorous underwriting process than smaller private projects. Larger bond amounts, often required for infrastructure contracts, mean sureties conduct deeper financial scrutiny before approval.

What Does a Construction Bond Cost?

Bond premiums are typically calculated as a percentage of the contract value, commonly ranging from 1% to 3% for contractors with strong financials and credit. Contractors with weaker credit profiles or limited experience may pay higher rates, sometimes 3% or more, particularly for their first few bonded projects.

Several factors influence the premium rate: the contractor’s credit score, financial statements, industry experience, and the size and complexity of the project itself. Infrastructure projects, which often involve larger bond amounts and longer project timelines, may also require contractors to demonstrate additional financial reserves to secure favorable rates.

It’s worth noting that bond costs are generally built into the overall project bid, so contractors should factor premium costs into their pricing strategy before submitting a proposal.

What Makes Bonding for Government and Infrastructure Projects Different?

Government and municipal contracts come with bonding requirements that exceed what’s typical for private commercial work. Understanding these differences helps contractors prepare more competitive, compliant bids.

Higher bonding capacity requirements. Infrastructure projects, such as roads, bridges, water treatment facilities, and public buildings, often involve contract values in the tens or hundreds of millions of dollars. Contractors need sufficient bonding capacity, the maximum amount of bonded work a surety will support, to qualify.

Stricter compliance standards. Public projects often involve prevailing wage laws, Davis-Bacon Act requirements, and detailed reporting obligations. Underwriters factor these compliance burdens into their risk assessment.

Longer underwriting timelines. Because of the scale and complexity involved, bonding for infrastructure work typically takes longer to underwrite than smaller private jobs. Contractors should begin the bonding process well before bid deadlines to avoid losing opportunities due to delays.

Statutory bond requirements. As noted earlier, federal projects over $150,000 fall under Miller Act requirements, and most states have comparable statutes for public work below that threshold. Contractors should confirm the specific bonding thresholds and requirements for each jurisdiction before bidding.

Contractors new to public infrastructure work should build a relationship with a surety agent experienced in government contracting well in advance of their first bid. This relationship often proves more valuable than shopping for the lowest premium, since an experienced surety can guide contractors through compliance requirements and help them scale bonding capacity over time.

Building a Bonding Strategy That Supports Long-Term Growth

Securing construction bonds isn’t simply a box to check before submitting a bid. It’s a financial relationship that, managed well, can expand a contractor’s capacity to take on larger and more complex projects over time.

Talk with Brandon Patterson on our team at brandon@ownbyinsurance.com to start building your bond strategy.

Beyond the Price Tag: What Really Matters When Comparing Insurance Policies

Posted on by Ownby-Client-Login

Article overview: The cheapest insurance policy isn’t always the best value. Coverage limits determine your maximum payout, deductibles affect what you pay out-of-pocket before coverage kicks in, and exclusions reveal what’s not covered at all. Evaluating these three factors together gives a clearer picture of true value than price alone.

 

A low premium can feel like a win until the moment you actually need to file a claim. That’s when policyholders often discover the fine print they skimmed past during the shopping process. A coverage limit too low to replace a damaged home, a deductible that eats into savings, or an exclusion that leaves a major risk unprotected – these gaps can turn an affordable policy into an expensive mistake.

Comparing insurance policies effectively means looking past the monthly premium and examining how a policy actually performs when it’s put to the test. This guide breaks down the three factors that matter most: coverage limits, deductibles, and exclusions. Understanding each one helps buyers make informed decisions and avoid unpleasant surprises down the road.

  1. What are coverage limits, and why do they matter?

A coverage limit is the maximum amount an insurance company will pay out for a covered claim. This cap can apply to the policy as a whole or to specific categories within it, such as liability, personal property, or medical expenses.

Choosing a policy with inadequate limits is one of the most common – and costly – mistakes buyers make. If a homeowner’s policy caps dwelling coverage at $200,000 but rebuilding the home would actually cost $300,000, the policyholder is left to cover the $100,000 gap out of pocket.

Choose higher coverage limits if the cost of replacing your assets or covering potential liabilities exceeds the policy’s default cap. This is especially relevant for homeowners in high-cost construction markets, drivers with significant assets to protect, or business owners carrying substantial liability risk.

To evaluate whether coverage limits are sufficient, buyers should:

  • Calculate the actual replacement cost of their home, vehicle, or business assets – not just the purchase price or current market value.
  • Review liability limits against personal net worth, since a lawsuit exceeding policy limits can put personal assets at risk.
  • Ask providers about umbrella policies, which extend liability coverage beyond a standard policy’s limits.
  1. How do deductibles affect the overall cost of a policy?

A deductible is the amount a policyholder pays out-of-pocket before insurance coverage begins. Generally, policies with higher deductibles come with lower premiums, while lower deductibles mean higher premiums. This trade-off is central to comparing insurance options.

The right deductible depends on financial circumstances and risk tolerance. A $2,000 deductible might lower monthly costs significantly, but it only makes sense if the policyholder has $2,000 readily available in the event of a claim.

Choose a lower deductible if predictable monthly costs matter more than minimizing premiums, particularly for those without a robust emergency fund. Conversely, financially stable buyers who rarely file claims may save more over time with a higher deductible and lower premium.

A few considerations when evaluating deductibles:

  • Some policies, particularly homeowners insurance in disaster-prone areas, carry separate deductibles for specific events like hurricanes or earthquakes—often calculated as a percentage of the dwelling coverage rather than a flat dollar amount.
  • Health insurance plans often include both individual and family deductibles, which can significantly affect out-of-pocket costs for larger households.
  • A lower premium paired with a high deductible isn’t automatically a better deal. It’s worth running the numbers on what a realistic claim scenario would cost in total.
  1. What exclusions should buyers watch for in a policy?

Exclusions are specific situations, events, or types of damage that a policy does not cover. Every insurance policy has them, and they’re often buried in sections buyers are tempted to skip.

Overlooking exclusions can be financially devastating. Standard homeowners insurance, for example, typically excludes flood damage – a coverage gap that becomes painfully clear only after water has already ruined a home. Similarly, many auto policies exclude coverage for rideshare driving unless a specific endorsement is added.

As another example, a standard homeowner’s policy from most major insurers excludes flood and earthquake damage by default, requiring separate policies like those offered through the National Flood Insurance Program (NFIP) for full protection.

Common exclusions worth investigating include:

  • Natural disasters: Floods, earthquakes, and sometimes windstorms are frequently excluded from standard property policies.
  • Business use of personal property: Running a business from home or using a personal vehicle for rideshare driving often isn’t covered under standard policies.
  • Pre-existing conditions: Many health and life insurance policies include waiting periods or exclusions related to conditions diagnosed before the policy’s start date.
  • Wear and tear: Most policies exclude gradual damage from aging or lack of maintenance, covering only sudden, accidental events.

Reading the exclusions section isn’t optional due diligence – it’s a critical step in understanding what a policy truly protects against.

  1. How should these factors be weighed together?

Coverage limits, deductibles, and exclusions don’t exist in isolation. A policy with generous coverage limits but a long list of exclusions might offer less real-world protection than a more modest policy with fewer gaps. Likewise, a low deductible paired with low coverage limits could mean smaller out-of-pocket costs per claim, but inadequate protection for a major loss.

The most effective way to compare policies is to build a simple side-by-side table listing each policy’s premium, coverage limits by category, deductible amounts, and key exclusions. This format makes it far easier to spot the trade-offs than scanning multiple dense policy documents separately.

It’s also worth asking insurance providers direct questions: What happens if a claim exceeds the coverage limit? Are there ways to lower the deductible without a significant premium increase? What riders or endorsements are available to close common exclusion gaps?

Making an informed choice

Price will always be a factor in choosing an insurance policy, but it shouldn’t be the deciding one. Coverage limits determine how much protection is actually available, deductibles shape the real cost of filing a claim, and exclusions define the boundaries of what’s covered in the first place.

Buyers who take the time to compare these details – rather than defaulting to the lowest premium – put themselves in a far stronger position when they actually need to rely on their coverage. Before signing on with any provider, request a full policy document, not just a summary, and don’t hesitate to ask questions about anything that seems unclear.

Contact Brandon Patterson from our team at brandon@ownbyinsurance.com to get your policy comparison questions answered.

NEMT Insurance Risks Growing Alongside the Market

Posted on by Jon Blankenship

Article Overview: The Non-Emergency Medical Transport (NEMT) market is expanding rapidly, bringing with it a distinct set of insurance risks – from liability exposure and driver compliance to fraud and regulatory complexity. Insurance professionals entering or operating in this space need specialized coverage strategies to stay ahead.

At Ownby Insurance Service, we’ve developed deep expertise in the NEMT space. This post outlines the key insurance risks emerging alongside market growth, and what carriers, brokers, and operators need to understand to address them effectively.

What Makes NEMT Insurance Uniquely Challenging?

NEMT sits at the intersection of healthcare and transportation – two heavily regulated industries, each carrying its own liability exposure. When you combine them, the risk profile becomes significantly more complex than either sector alone.

Drivers are transporting medically vulnerable passengers. These are individuals with mobility limitations, chronic conditions, or post-procedural needs. An incident that might be minor in standard commercial transport can result in serious injury – and significant claims – in the NEMT context.

Compounding this is the fact that many NEMT providers are small or mid-sized operators, sometimes running fleets of just a few vehicles. They may lack the internal risk management infrastructure that larger medical transportation companies have built over decades.

What Are the Biggest Insurance Risks in the NEMT Market?

  1. Liability Exposure from Passenger Vulnerability

The passengers NEMT providers serve are, by definition, not in peak health. This elevates the potential severity of any claim involving bodily injury. A fall during boarding, a vehicle accident, or improper wheelchair securement can result in outsized medical costs and legal exposure.

Standard commercial auto liability limits often fall short in these scenarios. NEMT operators need policies that reflect the elevated risk of transporting medically fragile individuals – with limits and endorsements that match the actual exposure they carry every day.

  1. Driver Qualification and Compliance Risk

NEMT regulations vary significantly by state, and many require drivers to meet specific training, background check, and certification standards. When operators fail to verify and document compliance – or when they rely on subcontractors who don’t meet those requirements – their insurance exposure grows substantially.

Underwriters evaluating NEMT risks look closely at hiring practices, training programs, and how operators handle driver monitoring. A gap in any of these areas can result in coverage disputes or claims denials when incidents occur.

  1. Vehicle Maintenance and Equipment Liability

Wheelchair lifts, securement systems, and medical equipment installed in NEMT vehicles require regular inspection and maintenance. Equipment failure is a documented cause of passenger injury in this sector – and it’s one that raises both auto and product liability questions.

Operators who lack formal maintenance logs or who defer equipment servicing create coverage challenges. For insurers, this is a key underwriting variable that directly affects loss ratios in NEMT portfolios.

  1. Fraud and Billing Abuse

NEMT fraud is a recognized problem within Medicaid-funded transport. Common schemes include billing for trips that never occurred, inflating mileage, or using unqualified vehicles. According to the Government Accountability Office, Medicaid improper payments – including NEMT-related fraud – cost the program billions annually.

For insurance professionals, fraud exposure runs in both directions. Operators face liability if fraudulent billing practices lead to state or federal investigations. Carriers, meanwhile, need robust claims review processes to identify fraudulent or inflated claims within their own NEMT books.

  1. Regulatory and Contractual Complexity

NEMT providers typically operate under contracts with Medicaid managed care organizations (MCOs), brokers, or state agencies. These contracts often contain specific insurance requirements – minimum coverage limits, additional insured endorsements, and reporting obligations – that vary by state and contract type.

Failure to maintain compliant coverage can result in contract termination, which is an existential risk for many operators. Insurance professionals serving this market need to understand these contractual frameworks and help clients stay ahead of changing requirements.

How Is Market Growth Amplifying These Risks?

The NEMT market’s expansion is drawing in new entrants who don’t always have the operational history or risk management practices of established providers. Technology platforms that connect riders with transport providers – sometimes called “NEMT brokers” – are also reshaping the landscape, creating new questions about liability when incidents involve third-party drivers or vehicles.

Fleet sizes are growing. Geographic coverage areas are expanding. And as NEMT providers scale, the complexity of managing compliance, driver oversight, and equipment standards scales with them.

For insurers, this means loss exposure is evolving faster than historical data can capture. Pricing NEMT risks accurately requires forward-looking underwriting – not just a review of prior losses.

What Coverage Do NEMT Operators Actually Need?

A comprehensive NEMT insurance program typically includes several components working together:

  • Commercial auto liability with limits appropriate for medically vulnerable passengers
  • General liability covering non-vehicle incidents, including boarding and disembarking
  • Workers’ compensation for drivers and attendants
  • Non-owned and hired auto coverage for operators using subcontracted vehicles
  • Excess/umbrella liability to address the elevated severity potential of passenger injury claims

Beyond coverage structure, NEMT operators benefit from working with insurers who understand the regulatory environment and can help them build risk management practices – not just issue a policy.

What Should the Market Expect Next?

Two trends are reshaping NEMT insurance risk. First, technology. GPS tracking, electronic trip verification, and AI-assisted dispatch are becoming standard, and they generate data that can meaningfully improve both risk management and fraud detection. Insurers who learn to use this data in underwriting will have a real advantage.

Second, regulatory pressure is increasing. States are tightening NEMT oversight in response to documented fraud and service quality concerns. Operators who treat compliance as a checkbox exercise will face growing exposure. Those who build compliance into their operations will be better positioned—and better insurable.

Build Your NEMT Book with Confidence

The NEMT market rewards specialists. Operators need insurance partners who understand their unique risk profile, and carriers need underwriters who can price and structure NEMT coverage accurately.

Ownby Insurance Service has built that expertise. Whether you’re an NEMT operator assessing your coverage, a broker expanding into this market, or a carrier looking to sharpen your underwriting approach, we’re equipped to help you navigate the risks that come with this growing sector.

Connect with Brandon Patterson on our team at brandon@ownbyinsurance.com to discuss your NEMT insurance needs.

Dental Practice Insurance: What Owners Need to Know

Posted on by Jon Blankenship

Article Overview: Dental practice owners face a distinct set of risks – from malpractice claims and data breaches to equipment failures and employee injuries. The right dental practice insurance program combines professional liability, general liability, property, cyber, and workers’ compensation coverage to protect the business from financial loss. Working with a specialist like Ownby Insurance Service ensures your coverage matches the specific exposures of a dental practice.

The right insurance program can help a Dental Practice focus on what they do best – helping patients – instead of spending additional time on concerns of the business’s protection. The challenge is knowing which coverages actually apply to a dental practice and where common gaps tend to appear. This guide breaks down the essential policies every dental practice owner should carry – and why each one matters.

What Makes Dental Practice Insurance Different from General Business Insurance?

General business insurance wasn’t designed with a dental practice in mind. A standard commercial package policy may cover your building and some general liability exposure, but it won’t address the clinical risks that define your day-to-day operations.

Dental practices face a unique combination of exposures: they deliver hands-on medical treatment, store highly regulated patient health data, operate expensive and sensitive equipment, and employ clinical staff who work in physically demanding conditions. Each of those factors requires specific coverage language – not a generic business policy.

That’s why dental practice owners benefit from working with an insurance specialist who understands the industry, rather than applying a one-size-fits-all approach.

What Types of Insurance Coverage Do Dental Practices Need?

Professional Liability (Dental Malpractice Insurance)

Professional liability – commonly called dental malpractice insurance – is the foundation of any dental practice insurance program. It covers claims alleging that a treatment caused patient harm, whether through a procedural error, a misdiagnosis, or an adverse outcome the patient attributes to your care.

Malpractice claims don’t require negligence to be costly. Even a defensible claim can generate significant legal fees before it’s resolved. Professional liability coverage pays for your defense costs and any resulting settlement or judgment, up to your policy limits.

Pay close attention to whether your policy is written on a claims-made or occurrence basis – this affects whether claims filed after your policy period are covered. Dental practices switching carriers or retiring should also ask about tail coverage (also called an extended reporting endorsement) to protect against claims that surface after coverage ends.

General Liability Insurance

General liability covers third-party bodily injury and property damage claims that aren’t related to clinical treatment. If a patient slips in your waiting room, or a vendor damages property during a visit, general liability responds.

This coverage is often bundled into a Business Owner’s Policy (BOP), which pairs general liability with commercial property insurance at a combined rate. For many dental practices, a BOP is an efficient and cost-effective starting point.

Commercial Property Insurance

Your practice’s physical assets represent a significant investment. Commercial property insurance covers damage to your building (if owned), dental equipment, furnishings, and supplies from covered events like fire, theft, and certain weather events.

For dental practices, it’s worth discussing equipment breakdown coverage as a separate endorsement or standalone policy. Standard property insurance typically covers damage from external events – not mechanical or electrical breakdown of your dental chairs, X-ray machines, sterilization units, or HVAC systems. Equipment breakdown coverage fills that gap. The cost of replacing or repairing specialized dental equipment without coverage can be substantial.

Cyber Liability Insurance

Dental practices collect and store protected health information (PHI) under HIPAA – making them a target for data breaches and ransomware attacks. Cyber liability insurance covers costs associated with a breach, including patient notification, credit monitoring services, regulatory defense, and potential fines.

The healthcare sector has consistently ranked among the most targeted industries for cyberattacks. A breach doesn’t need to involve thousands of records to be expensive: notification requirements, investigation costs, and potential HIPAA penalties add up quickly even for smaller incidents. Cyber coverage is no longer optional for any practice handling digital patient records.

Workers’ Compensation Insurance

If your practice has employees, workers’ compensation is required by law in most states. It covers medical expenses and lost wages for employees who are injured or become ill as a result of their work.

Dental staff face real occupational hazards – repetitive stress injuries, exposure to infectious materials, and musculoskeletal strain are all documented risks in the industry. Workers’ comp ensures your employees are protected and shields your practice from direct liability for workplace injury claims.

Business Interruption Insurance

If a covered event – such as a fire or significant equipment failure – forces you to temporarily close, business interruption insurance replaces lost income during the period your practice cannot operate. It can also cover ongoing fixed expenses like rent and payroll while you’re getting back on your feet.

This coverage is often underestimated until it’s needed. Dental practices that have to pause operations for weeks or months face serious financial pressure, and business interruption coverage is what keeps that from becoming a long-term problem.

What Coverage Gaps Do Dental Practices Commonly Miss?

A few coverage areas tend to be overlooked in dental practice insurance programs:

  • Employment practices liability (EPLI): Covers claims from employees alleging discrimination, harassment, or wrongful termination. As you grow your team, this exposure grows with it.
  • Hired and non-owned auto liability: If employees use personal vehicles for practice-related errands, your general liability policy likely won’t cover an at-fault accident. This endorsement fills that gap.
  • Umbrella or excess liability: Provides additional limits above your underlying policies – important if you face a large claim that exceeds your primary coverage.

How Much Does Dental Practice Insurance Cost?

Premium costs vary based on several factors: your practice’s location, the number of dentists and employees, the procedures you perform, your claims history, and the coverage limits you select. A solo general dentist in a suburban market will have different exposures – and different premiums – than a multi-dentist practice offering oral surgery or sedation.

Working with a specialist who can access multiple carriers ensures you’re getting competitive rates without sacrificing coverage quality. Ownby Insurance Service has direct experience placing coverage for dental practices and can help identify the right program for your specific situation.

Take the Guesswork Out of Dental Practice Coverage

Insurance decisions for a dental practice carry real consequences. Too little coverage leaves your business exposed; the wrong policy language can mean a claim isn’t covered when you need it to be.

Ownby Insurance Service specializes in placing insurance for dental practices, with the industry knowledge to match your coverage to your actual risks. If you’re opening a new practice, reviewing existing policies, or expanding your team, this is a conversation worth having before a claim forces it.

Reach out to Brandon on our team at brandon@ownbyinsurance.com to review your current program or discuss coverage for a new practice.

Insurance When Buying a Business: What You Need to Know

Posted on by Jon Blankenship

Article Overview: When acquiring a business, you need to audit the seller’s existing policies, understand coverage gaps, evaluate Extended Reporting Period (ERP) coverage, and secure new policies before the deal closes. Missing this step can leave you personally exposed to claims that predate your ownership.

Buying a business is one of the most significant financial decisions you’ll ever make. Due diligence covers financials, contracts, and operations – but insurance is often the last item on the checklist, despite being one of the most consequential. A gap in coverage during or after the acquisition can expose you to liabilities you didn’t create and costs you didn’t budget for.

What Role Does Insurance Play in a Business Acquisition?

When you acquire a business, you’re not just buying its assets and revenue – you’re inheriting its risk history. Claims related to prior incidents, employee disputes, or product liability can surface months or even years after the transaction closes. Without the right insurance structure in place, those liabilities can become your financial responsibility.

Insurance due diligence serves two core purposes: understanding what coverage currently exists and identifying what needs to change once ownership transfers. Both are equally important.

What Insurance Policies Should You Review Before Closing?

Start by requesting a full schedule of the seller’s current insurance policies. This should include every active policy, its coverage limits, deductibles, expiration dates, and claims history for the past three to five years.

Key policies to request and review:

  • General Liability Insurance – covers third-party bodily injury, property damage, and advertising injuries
  • Commercial Property Insurance – protects physical assets including buildings, equipment, and inventory
  • Workers’ Compensation Insurance – required in most states; covers employee injuries and lost wages
  • Directors & Officers (D&O) Liability – particularly relevant if the business has a board or investors
  • Professional Liability (Errors & Omissions) – critical for service-based businesses
  • Commercial Auto Insurance – if the business owns or operates vehicles
  • Cyber Liability Insurance – increasingly important for any business handling customer data

For each policy, confirm whether it is written on a claims-made or occurrence basis. This distinction directly affects whether ERP coverage will be necessary after the acquisition.

What is the Difference Between Claims-made and Occurrence Policies?

An occurrence policy covers incidents that happen during the policy period, regardless of when the claim is filed. An occurrence-based general liability policy, for example, will still respond to a claim filed two years later, as long as the incident occurred while the policy was active.

A claims-made policy only covers claims filed while the policy is active. Once the policy is cancelled or transferred, coverage ends – even for incidents that occurred during the covered period. This is where Extended Reporting Period coverage becomes critical.

What Is ERP Coverage and Why Does It Matter in Acquisitions?

Extended Reporting Period (ERP) coverage – sometimes called “tail coverage” – extends the reporting window on a claims-made policy after it expires or is cancelled. This means claims can still be filed after the policy period ends, as long as the underlying incident occurred while the original policy was active.

ERP coverage is most commonly associated with professional liability, D&O, and cyber liability policies. When a business is sold, the seller’s claims-made policies are typically cancelled. Without a tail, any claims arising from pre-acquisition incidents may go uncovered entirely.

Who pays for ERP coverage?

This is a negotiation point. In many transactions, the seller is responsible for purchasing tail coverage because the liability originated under their ownership. However, buyers should confirm this in writing before closing. If the seller fails to secure it, the buyer may be left holding the bag.

ERP coverage periods typically range from one to six years. Longer tails offer greater protection but come at a higher premium.

What Risks and Coverage Gaps Should You Look for During an Acquisition?

Beyond reviewing existing policies, a thorough insurance review identifies specific exposures that may need new or enhanced coverage post-acquisition.

Are there coverage gaps related to the transition itself?

The period between signing and closing can create temporary coverage vulnerabilities. If the seller’s policies are cancelled before new policies are bound, any incident during that window may be uninsured. Work with your insurance broker to ensure continuous coverage with no gaps during the transition.

What industry-specific risks need to be addressed?

Different industries carry different exposures. A restaurant acquisition, for example, involves food spoilage risks, liquor liability (if alcohol is served), and equipment breakdown coverage. A technology company may need robust cyber liability and errors & omissions coverage. A professional services firm will likely require strong D&O and professional liability limits.

Diablo Valley Insurance Agency, for example, offers customizable policy options tailored to specific business types – recognizing that a fast-food franchise has fundamentally different needs than a fine-dining establishment or a tech startup.

What additional coverage should buyers consider?

When evaluating a new policy structure after an acquisition, the following coverage additions are worth discussing with your broker:

  • Representations and Warranties (R&W) Insurance – covers losses arising from inaccurate representations made by the seller during the transaction. Increasingly common in mid-market M&A deals.
  • Pollution Liability – relevant if the acquired business has operated on owned or leased property with environmental exposure
  • Employment Practices Liability (EPLI) – covers claims related to wrongful termination, discrimination, or harassment involving employees of the acquired business
  • Business Interruption Insurance – protects against revenue loss if operations are disrupted post-acquisition

How to Approach Insurance When Structuring the Deal

The structure of the deal – asset purchase versus stock purchase – has direct implications for insurance.

In an asset purchase, the buyer generally acquires specific assets and liabilities, which can limit exposure to historical claims. In a stock purchase, the buyer takes on the entire legal entity, including its full claims history and any unresolved liabilities. Stock purchases make tail coverage and thorough policy review even more critical.

Bring an experienced commercial insurance broker into the acquisition process early – ideally at the same time as your attorney and accountant. Their job is not only to identify gaps but to help you structure coverage that reflects the actual risk profile of the business you’re acquiring.

Make Insurance Part of Your Due Diligence from Day One

Insurance gaps in a business acquisition are rarely obvious – until a claim arrives. By auditing existing policies, understanding claims-made versus occurrence distinctions, securing ERP coverage where needed, and addressing industry-specific risks, buyers can protect themselves from liabilities they didn’t create.

The right coverage structure doesn’t just manage risk – it protects the investment you’ve worked hard to build. Talk to Brandon Patterson (brandon@ownbyinsurance.com) and our team before your next acquisition closes to ensure you know your insurance standing from the moment ownership transfers.

Business Liability Risks Every Business Should Know in 2026

Posted on by Jon Blankenship

Article Overview: Business liability risks are growing more complex in 2026, driven by cyber threats, AI-related employment claims, climate events, and tightening regulations. According to the Allianz Risk Barometer 2026—a survey of 3,338 risk management experts from 97 countries—cyber incidents, artificial intelligence, and business interruption rank as the top three global business risks this year. The right insurance program can protect your organization from financial and legal exposure across all of these areas.

Running a business means accepting a certain amount of risk. That’s always been true. But the nature of those risks is changing faster than ever, and many businesses—nonprofits, restaurants, construction firms, and others—are finding that their existing coverage no longer reflects the threats they actually face.

Liability exposure doesn’t always come from the outside. Lawsuits from employees, regulatory penalties, cyber incidents, and environmental claims can all lead to significant financial loss. The good news: with the right coverage and a knowledgeable insurance partner, businesses can protect their leadership, their people, and their bottom line.

This post breaks down what business liability means, which risks are trending in 2026, and what insurance solutions are available to help.

What Is Business Liability Insurance – and What Does It Cover?

Business liability insurance protects organizations from legal and financial claims made by third parties, employees, regulators, or customers. Rather than a single policy, it typically refers to a suite of coverages designed to address different exposures.

The most common types include:

  • General Liability Insurance: Covers third-party bodily injury, property damage, and advertising injury claims
  • Professional Liability Insurance: Protects against claims of negligence or errors in professional services (also called Errors & Omissions, or E&O)
  • Management Liability Insurance: An umbrella category that includes Directors & Officers (D&O) coverage, Employment Practices Liability Insurance (EPLI), and Fiduciary Liability—protecting both leaders and organizations from claims related to employment practices, wrongful acts, and benefit plan mismanagement
  • Cyber Liability Insurance: Covers first-party and third-party losses from data breaches, ransomware, and cyberattacks
  • Environmental/Pollution Liability: Covers costs related to environmental contamination and regulatory violations

For organizations of all sizes—especially nonprofits, small businesses, and private companies—even a single uncovered claim can produce devastating consequences. Management liability claims, in particular, can threaten the personal assets of directors and officers if the right protections aren’t in place.

What Are the Biggest Trending Business Liability Risks in 2026?

How are cyber incidents threatening businesses in 2026?

Cyber incidents rank as the #1 global business risk for 2026, according to the Allianz Risk Barometer 2026—and it’s the fifth consecutive year they’ve held that position. That’s not a coincidence. Cyberattacks are growing more sophisticated, more frequent, and more expensive.

Generative AI is now being used to craft highly convincing phishing campaigns, making it harder for employees to detect threats. Cloud service outages in 2025 created ripple effects across entire supply chains. And ransomware demands continue to rise, targeting businesses of all sizes.

The exposure is real for businesses across every sector. Basic cybersecurity measures are no longer enough to prevent a breach—and when one occurs, the costs can include first-party business losses, third-party liability, regulatory fines, and lasting reputational harm.

Why is artificial intelligence now a top business liability risk?

Artificial intelligence jumped from #10 to #2 on the Allianz Risk Barometer 2026—the biggest single-year climb of any risk category. As AI becomes embedded in core business operations, so do the legal risks it creates.

Nowhere is this clearer than in employment practices. January 2026 was the worst month for US layoffs since 2009, with employers shedding more than 108,000 jobs, according to Challenger, Gray & Christmas (February 2026). Many of those layoffs were driven or informed by AI tools—and plaintiffs’ attorneys have taken notice.

Employment Practices Liability (EPL) claims tied to AI are accelerating. The landmark case Mobley v. Workday (2025) extended potential liability to AI vendors, not just employers, when algorithmic tools contribute to discriminatory hiring outcomes. Several states now require audits of AI hiring tools to detect bias. A January 2026 class-action lawsuit in California specifically targets AI hiring transparency, not just outcomes—a theory that could broaden employer exposure significantly.

The broader employment landscape is equally concerning. According to the Equal Employment Opportunity Commission, 88,531 new workplace discrimination charges were filed in FY 2024—a 9.2% increase over the prior year. EEOC systemic discrimination lawsuits rose 50% year-over-year. Nuclear verdicts continue to climb, including an $80.25 million wrongful termination and defamation award and a $26 million Mastercard settlement in early 2025.

For nonprofits and private companies that may lack large legal departments, a single employment claim can be financially crippling without proper management liability coverage.

What climate and environmental risks are affecting businesses?

Natural catastrophes dropped to #5 globally on the Allianz Risk Barometer 2026, but the numbers tell a more sobering story: insured losses from catastrophe events hit $100 billion for the sixth consecutive year. In 2025 alone, the US experienced over 30 billion-dollar weather events—from flooding to wildfire.

For businesses in construction, hospitality, and transportation, climate risk means more than property damage. It means business interruption, supply chain disruptions, and questions about whether existing property limits reflect true replacement costs.

Additionally, environmental liability is growing through PFAS exposure—so-called “forever chemicals” now subject to stricter state and federal regulations. Businesses in manufacturing, agriculture, and certain service sectors may face lawsuits and cleanup obligations they haven’t yet anticipated.

How do regulatory changes create liability exposure for businesses?

Changes in legislation and regulation rank #4 globally in 2026, driven by concerns over tariffs, data privacy mandates, ESG reporting requirements, and shifting DEI enforcement priorities.

The DOJ Civil Rights Fraud Initiative (July 2025 guidance) targets preferential treatment based on protected traits. Pay transparency laws now apply in more than a dozen states. The EU Directive 2023/970 on pay transparency mandates binding compliance measures by June 2026—relevant for any business with international operations or partnerships.

For employers, staying ahead of these changes requires regular policy reviews, compliance audits, and coverage that reflects current legal realities.

How Can the Right Insurance Program Protect Your Business?

Understanding your risks is the first step. Building a coverage strategy that addresses them is where a trusted, independent insurance partner makes the difference.

At Ownby Insurance, we work with a wide network of vetted carriers to craft tailored solutions for organizations across industries—not one-size-fits-all policies. Here’s how specific coverages map to the risks above:

  • Cyber Liability Insurance: Addresses ransomware demands, data breach response, regulatory fines, third-party claims, and reputational harm. Critical for any business handling sensitive client or employee data.
  • Management Liability Insurance (D&O + EPLI + Fiduciary): Protects leadership teams and organizations from employment-related lawsuits, wrongful acts claims, and fiduciary failures. Essential for nonprofits, startups, and established corporations alike—especially as AI-related EPL claims rise.
  • Environmental/Pollution Liability: Covers emerging PFAS and contamination exposures for businesses in construction, manufacturing, and related industries.
  • Business Interruption Insurance: Provides financial support when operations are disrupted by a covered event, including supply chain failures and climate-related shutdowns.
  • Umbrella/Excess Liability: Extends coverage limits across underlying policies, providing an additional layer of protection when claims exceed standard policy limits.

The key isn’t just having coverage—it’s having the right coverage. Many businesses discover gaps in their programs only after a claim is filed. A proactive review of your insurance program, especially as risks evolve, can prevent that from happening.

Take Action Before a Claim Forces Your Hand

The liability risks facing businesses in 2026 are real, complex, and in many cases, growing. Cyber threats are more sophisticated. Employment litigation is more expensive. Regulatory requirements are shifting. Environmental exposures are expanding.

The organizations best positioned to navigate this landscape are those that take action now—not at renewal, not after a lawsuit, and not after a data breach. A comprehensive insurance review with a knowledgeable, independent advisor is the most practical first step.

At Ownby Insurance Service, our team has the experience and carrier relationships to help businesses build coverage programs that reflect the actual risk environment they’re operating in. Reach out to Brandon Patterson on our team at brandon@ownbyinsurance.com to schedule a review of your current coverage.

Who Needs Builders’ Risk Insurance Coverage and Why It Is Important

Posted on by Jon Blankenship

Article Overview: This article answers questions on builders’ risk insurance coverage and its importance for construction projects. It shares helpful info for property owners, general contractors, subcontractors, and lenders. Stakeholders must secure this coverage before breaking ground to avoid dangerous gaps in standard property policies.

Every construction project carries inherent risks. From the moment you break ground to the final inspection, exposed materials, partially built structures, and expensive equipment sit vulnerable on the job site. Standard property insurance rarely covers a building while it is under construction or undergoing major renovations. This creates a dangerous coverage gap that can halt a project and drain budgets overnight.

To protect your investment and ensure project continuity, you need specialized protection. That is where builders’ risk insurance coverage comes in. But who needs may not be as obvious as it seems.

Who Needs Builders’ Risk Insurance?

A common misconception is that the general contractor automatically holds all the necessary insurance for a build. In reality, multiple parties have a vested financial interest in a construction project, and any of them can purchase the policy.

Here is a closer look at who needs builders’ risk insurance:

Property Owners and Homeowners

If you own the land and finance the construction of a new building, you carry the primary financial risk. Standard homeowners or commercial property policies generally exclude damage to structures under construction. Securing builders’ risk insurance protects your capital against catastrophic losses before the building is complete.

General Contractors and Builders

Contractors rely on this coverage to protect their materials, labor, and profit margins. If a fire destroys a partially framed building, the contractor is still responsible for completing the project. Without the right coverage, they would have to absorb the cost of replacing materials and re-doing the labor out of pocket.

Lenders and Investors

Banks and private lenders rarely fund a construction project without proof of insurance. They require this coverage to guarantee that their financial investment remains protected if a disaster strikes the site before the property can be sold or occupied.

The Importance of Builders’ Risk Insurance

Understanding the importance of builders’ risk insurance means looking at the specific threats that jeopardize construction sites every day. This coverage acts as a financial safety net, keeping your project moving forward when the unexpected happens.

  1. Robust Financial Protection

Construction sites face unique vulnerabilities. High winds can knock down scaffolding, a sudden freeze can burst newly installed pipes, and a stray spark can cause a devastating fire. Builders’ risk insurance covers the cost to repair or replace the damaged structure and materials, protecting your bottom line from severe financial strain.

  1. Coverage for Theft and Vandalism

Lumber, copper wiring, and high-end fixtures are prime targets for thieves. An unsecured job site after hours invites vandalism and theft, which can set a project back weeks and cost thousands of dollars. A comprehensive builders’ risk policy covers stolen materials and repairs malicious damage, ensuring you do not have to pay twice for the same supplies.

  1. Contractual and Lender Compliance

You often cannot start a project without this policy in place. Municipalities may require it to issue building permits. Furthermore, construction contracts typically mandate that either the owner or the contractor maintain a builders’ risk policy. Having this coverage ensures you remain compliant with local laws, loan covenants, and contractual obligations, preventing unnecessary legal disputes.

Secure Your Project Before Breaking Ground

A successful construction project requires careful planning, skilled labor, and rigorous risk management. Relying on standard property insurance during a build or renovation leaves your capital exposed to significant threats. Securing builders’ risk insurance coverage is the most effective way to protect your materials, satisfy your lenders, and guarantee that your project reaches completion, no matter what happens on the job site.

Do not wait until the foundation is poured to think about your coverage. Contact us today to discuss your upcoming project. Contact Brandon Patterson on our team at brandon@ownbyinsurance.com to learn about your build project’s risks and the coverage options available.

Insurance for NEMT Companies: Protecting Your Business and Patrons

Posted on by Jon Blankenship

Running a non-emergency medical transport (NEMT) company means taking on unique responsibilities. You’re not just moving people from point A to point B – you’re caring for vulnerable patients who depend on safe, reliable transportation to reach medical appointments that could impact their lives.

This specialized role comes with distinct risks that standard business insurance won’t cover. From vehicle accidents involving wheelchair-accessible vans to liability claims from patient injuries, NEMT companies face challenges that require specific insurance protection.

In this guide, we’ll explore the specific risks your NEMT business faces and the insurance coverages that can protect you, your employees, and the patients you serve.

Understanding NEMT Business Risks

Vehicle-Related Risks

NEMT vehicles spend more time on the road than typical commercial vehicles, increasing accident exposure. Your drivers navigate various weather conditions, traffic patterns, and unfamiliar routes while operating specialized equipment like wheelchair lifts and stretchers.

Consider this scenario: Your driver is transporting an elderly patient to dialysis when another vehicle runs a red light and crashes into your van. The patient suffers additional injuries, your vehicle sustains $40,000 in damage, and your driver requires medical treatment for whiplash. Without proper coverage, this single incident could financially devastate your business.

Patient Care Liability

Unlike standard transportation services, NEMT companies provide care during transport. You’re responsible for patient safety from pickup to drop-off, including proper securement in wheelchairs, assistance with mobility devices, and monitoring during the journey.

Imagine your employee fails to properly secure a patient’s wheelchair, causing them to fall during transport and break their hip. The resulting medical bills, rehabilitation costs, and potential lawsuit could reach hundreds of thousands of dollars.

Employment-Related Risks

Your drivers handle intimate patient care tasks, access personal health information, and work in patients’ homes. This creates exposure to discrimination claims, privacy violations, and allegations of inappropriate conduct.

Regulatory Compliance Risks

NEMT companies must comply with Department of Transportation regulations, Americans with Disabilities Act requirements, and state medical transport licensing. Non-compliance can result in fines, license suspension, or lawsuit vulnerability.

Essential Insurance Coverage for NEMT Companies

Commercial Auto Insurance

Standard personal auto policies won’t cover your business activities. Commercial auto insurance provides crucial protection for your fleet and operations.

Coverage components include:

  • Liability protection for bodily injury and property damage
  • Collision and comprehensive coverage for your vehicles
  • Medical payments for injured passengers
  • Uninsured/underinsured motorist protection

NEMT companies typically need higher liability limits than standard commercial vehicles due to patient vulnerability. Consider minimum limits of $1 million per occurrence, though many companies carry $2-5 million for adequate protection.

Real-world example: A NEMT van rear-ends another vehicle while transporting three dialysis patients. All passengers suffer neck injuries requiring ongoing treatment. With $1 million in liability coverage, the insurance company handles medical expenses, lost wages, and legal fees, protecting your business assets.

General Liability Insurance

This foundational coverage protects against claims arising from your business operations, including patient injuries that occur outside vehicle accidents.

Protection includes:

  • Slip and fall injuries at your facility
  • Patient injuries during loading/unloading
  • Property damage at patient locations
  • Advertising injury claims

Scenario: While helping a patient into their home, your employee accidentally knocks over and breaks an expensive personal item. General liability insurance covers the replacement cost, preventing an out-of-pocket expense that could strain your cash flow.

Professional Liability Insurance

Also called errors and omissions (E&O) insurance, this coverage protects against claims alleging negligent performance of professional services.

Coverage applies to:

  • Failure to follow patient care protocols
  • Medication administration errors
  • Improper patient handling techniques
  • Documentation mistakes affecting patient care

Case study: Your company’s care plan requires a patient to arrive at dialysis by 10 AM, but traffic delays cause a 30-minute late arrival. The patient misses their treatment, experiences complications, and claims your negligence caused their deteriorated condition. Professional liability insurance covers legal defense costs and potential settlements.

Workers’ Compensation Insurance

Required in most states, workers’ compensation protects employees injured on the job while shielding you from related lawsuits.

NEMT-specific considerations:

  • Repetitive lifting injuries from patient transfers
  • Back injuries from wheelchair securement
  • Stress-related conditions from patient care responsibilities
  • Vehicle accident injuries

Example: Your driver injures their back while operating a wheelchair lift for a 300-pound patient. Workers’ compensation covers medical treatment, rehabilitation, and partial wage replacement during recovery, while preventing the employee from suing your company.

Cyber Liability Insurance

NEMT companies handle sensitive patient health information, making them attractive targets for cybercriminals. Data breaches can result in massive fines, notification costs, and reputation damage.

Protection includes:

  • Data breach response costs
  • Regulatory fines and penalties
  • Credit monitoring for affected patients
  • Business interruption from cyber attacks

Commercial Property Insurance

This coverage protects your physical business assets, including your facility, medical equipment, and office contents.

Considerations for NEMT companies:

  • Wheelchair lifts and medical equipment in vehicles
  • Specialized communication systems
  • Patient records and computers
  • Building improvements for accessibility compliance

Work with Specialized Agents

Insurance agents familiar with NEMT operations understand your unique risks and can recommend appropriate coverages. They’ll help you navigate complex requirements and find competitive pricing from insurers who understand your industry.

Brandon Patterson from our team has experience with these risks and is ready to help you. Contact him today at brandon@ownbyinsurance.com to get the coverage info you need!

How Claims Impact Your Insurance Premiums

Posted on by Ownby Insurance Service

Your insurance premium is based on many factors, from the type of coverage you choose to your overall risk profile. But one aspect that often surprises policyholders is the impact of claims on their premiums. Whether you’ve recently filed a claim or you’re thinking about it, it’s important to understand how claims can influence the cost of your coverage.

Loss History: A Snapshot of Your Risk

Your loss history, or claims history, is a critical factor insurers use to determine your premium. This is essentially a record of all the claims you’ve filed in the past. Insurers view this as a representation of your risk level – policyholders who have filed multiple claims are generally seen as more likely to file additional claims in the future.

Each insurer has its own thresholds for how claims history impacts your premiums, but generally, past claims can lead to higher premiums.

Why Does Your Loss History Matter Impact Your Insurance Premiums?

Your loss history paints a picture for your insurer. For example:

  • If you’ve experienced multiple incidents, it could indicate a higher likelihood of future claims.
  • A long history of claims, even if they’re for relatively small amounts, can label you as a higher-risk policyholder.

While you can’t change your past claims, being aware of how your loss history is assessed can influence your approach to future claims.

Claim Frequency and Size Matter

Number of Claims

In insurance, the old saying “the fewer, the better” rings true. Filing multiple claims within a short time – even for small amounts – can signal a higher risk level to your insurer. Insurers often see frequent claims as an indicator of risk-prone behavior, even if the claims themselves are low-cost.

To manage your premium effectively:

  • Avoid filing claims for minor damages that fall close to or just above your deductible.
  • Consider whether the cost of repairing or replacing an item out-of-pocket is more affordable in the long run.

Claim Size

The size of the claim matters just as much as the number. Large claims require significant payouts from the insurer. When an insurer has to pay a big settlement for a loss, the chances are your premium will move upward to reflect the cost.

For instance, a single high-value claim – such as a major accident or property damage – might have a bigger impact on premiums than several smaller claims.

The Impact of Your Deductible Choice

Your insurance deductible – the amount you agree to pay out-of-pocket before your insurance kicks in – also plays a major role in claims and premiums. Filing claims for damages that barely exceed your deductible can lead to higher premiums in the future, meaning you’re left paying more overall.

The Value of a Claims-Free Credit

Insurance providers often reward policyholders who don’t file any claims over a certain period. This is commonly known as a claims-free discount or credit. Maintaining a claims-free record demonstrates a lower risk level, which insurers may reward with a reduced premium or special discounts.

Filing a claim could result in the loss of this credit, which can significantly increase your premiums in the long term. Depending on your provider, the impact of losing a claims-free credit can sometimes outweigh the benefit of filing a minor claim.

“Then Why Do I Even Have Insurance?”

All this doesn’t mean you should avoid filing claims entirely. Insurance exists to protect you in situations where the losses are too great to bear out-of-pocket. However, carefully evaluating the situation and considering the long-term implications can help you balance coverage with premium stability.

Smart Tips to Manage Insurance Claims and Premiums:

  1. Review Your Policy Carefully
    Understand your deductible amount, what types of incidents are covered, and how claims may impact things like claims-free discounts.
  2. Weigh Filing a Claim Against Out-of-Pocket Costs
    If the repair or replacement cost is close to your deductible, it may save you money long-term to pay out-of-pocket rather than file a claim.
  3. Keep Your Loss History in Mind
    Evaluate how additional claims could impact your overall risk profile and premiums.
  4. Focus on Preventative Measures
    Take steps to avoid future incidents, such as securing your home, maintaining your property, or installing safety features. Proactively reducing risks can help keep your premiums manageable over time.
  5. Bundle Your Insurance Policies
    Many insurers offer discounts for bundling, which can offset increased premiums due to claims.
  6. Ask About Claims Forgiveness
    Some insurers offer “claims forgiveness” features, where your first claim won’t impact your premium. Consider whether this add-on is available and worth adding to your policy.

When to File

Ultimately, balancing the cost of a claim versus the long-term implications for your premium is key. By thinking strategically and being proactive, you can ensure your insurance remains both effective and affordable. If you’re unsure, discuss the deductibles and potential impacts of filing the claim with our team and we’ll help you understand your options – but we won’t make the choice for you. That’s your decision!

Do You Know These 4 Often Overlooked Coverages for Property Managers?

Posted on by Ownby Insurance Service

When it comes to insurance, property managers and residential building owners often focus on general liability and property coverage. While these are crucial, there are additional risk exposures that need to be addressed. Here are four important types of coverage you might be overlooking:

  1. Errors & Omissions (E&O) Coverage

    What is it?

    Errors & Omissions insurance may help protect you against claims of negligence or inadequate work. If a tenant sues you for failing to perform your duties or for providing incorrect advice, E&O coverage might help with costly legal fees and settlements.Why you need it:
    Property management is a complex field where mistakes can happen despite best efforts. Whether it’s a clerical error that leads to financial loss or a misstep in tenant placement, E&O insurance provides vital protection.

  2. Tenant Discrimination Coverage

    What is it?

    This coverage offers protection if a tenant (or prospective tenant) alleges discrimination based on race, religion, gender, etc., during the rental process or tenancy.

    Why you need it:

    Even with the best intentions, discrimination claims can arise and lead to expensive lawsuits. Tenant discrimination coverage can help manage the financial burden of legal defense costs and settlements.

  3. Workers’ Compensation Coverage

    What is it?

    Workers’ compensation insurance can help cover medical expenses and lost wages for employees who get injured while working on your property.

    Why you need it:

    If you employ staff such as maintenance workers, cleaners, or security personnel, workers’ compensation is often legally required. But even office staff may have risk exposures such as moving large packages or injuries during on-site work. It can also protect you in lawsuits brought by employees for workplace injuries.

  4. Cyber Liability Coverage

    What is it?

    Cyber liability insurance protects against data breaches and cyber attacks, covering costs like legal fees, notification expenses, and compensation to affected parties.

    Why you need it:

    Property managers handle sensitive data, from tenant applications to payment information. A breach can not only damage your reputation but also lead to significant financial consequences. Cyber liability coverage helps mitigate these risks.Have you considered these overlooked coverages? We’re here to help you better protect your business and assets. For more detailed advice tailored to your needs, contact Brandon Patterson on our team at brandon@ownbyinsurance.com