Directors and Officers (D&O) Insurance Archives

How Much Insurance Does Your Business Need?

Posted on July 12, 2024September 3, 2024 by Ownby Insurance Service

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!

What is Business Income Coverage and When Do You Need It?

Posted on June 10, 2024September 3, 2024 by Ownby Insurance Service

If you own, operate, or manage a business, you know how important it is to track revenue and financials. But what if that revenue stopped coming in due to a fire? What if a major theft prevented you from being able to pay your bills and payroll? Having business income (also known as business interruption) coverage in place may help lift the financial burden. But it’s very important to understand when and how it can be used.

Business Income Coverage Examples

Let’s take for example, Christina owns an independent bookstore and also owns the building where the store is located. A fire damages part of the store, and in the process of putting out the fire, her inventory is destroyed by smoke and water damage. It’s going to be several months before the property can be cleaned and repaired for patrons to safely enter, and new inventory must also be ordered and stocked.

The property policy on the business covers much of the physical damage, and there is also some coverage for inventory. However, Christina knows she’ll have trouble paying her employees and her bills without any revenue being generated. So, what does she need to know if she has business income coverage in place?

What is the actual loss sustained? Christina will need to know the total of her covered losses and how much was covered by other insurance policies.
What is the amount of income lost? Christina will need to be able to provide information on the amount of revenue she would have generated had the store been open as normal.
What is the “waiting period” of the policy? Most business income coverage will have an amount of time that must pass before the coverage can take effect.
What is the “period of restoration”? How much time will the policy cover while the business is closed?

These crucial factors will help determine when, how much, and for how long Christina can expect the policy will pay.

Named Perils

These policies typically have named perils as well. So, while a fire, theft, wind, etc. may be covered, you’d have to check your policy to see if a service line being damaged would be covered. In addition, civil authority may be covered as an interruption after a natural disaster. As an example, if a sinkhole damaged the only road leading to your business and the government ordered closure as a result, you might be covered for business income.

Understand Your Business Income Coverage

However, and as with any policies, it is extremely important to understand your coverage and limits. Don’t assume you’d be covered for certain situations, talk with your agent and get an understanding of what would trigger this coverage, for how much, and for how long.

To learn more about it, contact Brandon from our team at brandon@ownbyinsurance.com or 865-453-1414 today.

What Does a “High Net Worth” Client Look Like in Insurance?

Posted on June 10, 2024September 3, 2024 by Ownby Insurance Service

You may have seen the term “high net worth” somewhere and thought, “That’s not me, we’re not ‘rich’ we’re just upper middle class.” But when it comes to insurance, high net worth is more about value than wealth.

Consider homes as an example. A high value home is typically one that is valued at $750,000 or higher. With inflation and today’s property values, your home may fall in that range now, even if you didn’t pay that much to buy it. But if the size, location, and/or values of homes around you have increased – your home likely is worth more too.

In addition, do you have a more expensive vehicle? What about multiple vehicles? Do you have a boat, RV, ATV, or other additional vehicles? Do you have a gun collection, jewelry, or other personal property that might be worth more than your current policy’s limits. All these things add up, and they may need more coverage than is offered by “standard” home and auto policies.

Property isn’t the only place you face risk; you have personal liability as well. And the more you have, the more you may be sued for if someone feels you are responsible for some type of “damage” to them. Lawsuits are more common now, as are larger court judgments and settlements. Having more coverage for personal liability can help protect you and your assets.

So, do you need “special” coverage?

Maybe not “special” coverage, but you very well might need “different” coverage. Important things to check include:

Property limits on your policy – are they high enough for the value?
Coverage language like Replacement Cost versus Actual Cash Value – would you want to pay the difference if you had a claim?
Liability limits on your policy – lawsuits can be costly and adding more may not be as expensive as you’d think.

Things you should consider to better protect yourself:

Get the current property value of your home assessed and match your policy limits closer to that value
Take precautions to protect your property like home security systems, protection devices, home & roof inspections, and discussing safety with your family
Discuss valuable items like jewelry, firearms, and collections with your insurance agent to see if they need to scheduled on your policy
Consider a Personal Umbrella Policy (PUP) for additional protection

Make sure you understand your current policies, coverages, and limits. Review what you have and what you may need on a regular basis to make sure changes have been accounted for properly. It can make a huge difference in your protection whether you’re high net worth or not!

Want more tips to help better protect yourself and your family? Need a policy review? Contact Brandon from our team at brandon@ownbyinsurance.com or 865-453-1414 today.