Owning a business is a lot of work. It often involves managing people, making decisions, keeping track of many things at once, marketing, selling, and a slew of other tasks. When it comes to insurance, most business owners don’t have the time or resources to seek out what they need on their own. They rely on an agent to help them assess their risks and review their policy options. But even with an agent involved, it is best to understand your coverages and what insurance you may not have as well. So, how “much” do you need? Let’s review a few of the ways to find out.
Do You Sell Product(s) or Services?
Whether you offer products or services significantly affects your insurance needs. If you sell products, you may need product liability insurance to protect against claims related to product defects or injuries caused by your products. On the other hand, if you provide services, professional liability insurance (also known as errors and omissions insurance) can cover claims related to professional mistakes or negligence.
Do You Own or Lease Property for Business?
If you own or lease property for your business, you need to consider commercial property insurance. This type of insurance covers damages to your building, equipment, inventory, and other physical assets due to incidents like fire, theft, or vandalism. For those leasing property, make sure to check the terms of your lease to understand your insurance responsibilities.
Do You Have Employees?
Having employees introduces additional risks and responsibilities. You’ll need workers’ compensation insurance to cover medical expenses and lost wages for employees who get injured on the job. Additionally, employment practices liability insurance can protect against claims related to employee rights violations, such as wrongful termination or discrimination.
Do You Have Vehicles You Use for Business?
If your business uses vehicles for operations, commercial auto insurance is essential. This insurance covers damages and liability in case of accidents involving your business vehicles. Make sure to include coverage for all vehicles used for business purposes, whether they are owned, leased, or rented.
Do You Store Client/Customer Data?
In today’s digital age, data breaches and cyberattacks are significant threats to businesses. If you store client or customer data, consider investing in cyber liability insurance. This insurance helps cover costs associated with data breaches, including legal fees, notification expenses, and credit monitoring for affected individuals.
Additional Coverages
Apart from the key considerations mentioned above, there are other types of insurance you may need based on your specific business needs:
- General Liability Insurance: Covers a wide range of risks, including bodily injury, property damage, and advertising injury. This coverage is often included in the base policy for your business, such as in a Business Owners’s Policy (BOP).
- Business Interruption Insurance: Compensates for lost income if your business operations are halted due to a covered event, such as a natural disaster.
- Directors and Officers (D&O) Insurance: Protects your company’s leadership against personal losses resulting from legal actions taken against them due to their corporate decisions.
What About the Dollar Amount?
Are recent Blog on Total Insurable/Insured Value (TIV) may be able to help you calculate the amount you should have for the total insured limits on your policy. There are many factors involved here, and we’d encourage you to read more about it!
Even with all the above in mind, there may be risks that are very specific to the work you do. It is best to discuss your business with a licensed agent to really determine what you may need. Contact Brandon Patterson on our team if you’d like to discuss your business’s insurance!