Business owners have an overwhelming amount of responsibility to juggle, and it can be easy for some details – like comprehensive small business insurance – to fall through the cracks. Often times, insurance policies are purchased when the company is initially founded but then not reevaluated as the company’s needs evolve, which can leave major gaps in coverage and unnecessary risk exposures.
Evaluating whether you have the right coverage for your business can be an intimidating task – so we designed our “small business insurance check-up” to help you sort through the options with simple, easy-to-digest overviews of the types of coverage that may be relevant to your current business operations.
The Small Business Insurance Check-Up
1. General Liability Insurance – protects your business in the event that you’re found to be responsible for bodily injury or property damage that occurred in conjunction with or because of your business operations. It covers defense costs, medical bills, and settlement or damage awards. Some examples of claims include: a vendor being injured on your property, a customer getting hurt while using your product, or a competitor accusing you of slander in an advertising campaign.
2. Commercial Property Insurance – insures physical property, including the structure and its contents, against losses caused by a “covered event.” When initially purchasing small business insurance, you may have chosen basic coverage, which can limit covered events to fires, explosions, theft, and vandalism. As you reevaluate your policies, consider adding coverage for floods, earthquakes, and other risk factors, and talk with your insurance agent about whether your policy provides the replacement cost value or actual cost value (which takes depreciation into account).
3. Business Income Insurance – covers the costs associated with a business interruption. In other words, it provides for lost profits and continuing expenses if your business is unable to operate due to a covered event, such as a fire. Where property insurance will pay for the damages to physical property, business income insurance will help you pay for things like rent or mortgage payments, taxes, utilities, and payroll.
4. Business owner’s policy (BOP) – bundles the three core types of small business insurance policies: general liability, commercial property, and business income. If you’ve opted for a BOP, be sure to evaluate the details of your coverage, including exemptions and coverage limits.
5. Commercial Auto Insurance – covers your company vehicles and drivers while they’re doing business on your behalf. Even if you don’t have a fleet of vehicles, you may still need commercial auto coverage if your employees regularly use their personal vehicles to conduct company business.
6. Worker’s Compensation – pays benefits to workers who are injured on the job, including their medical care, part of lost wages, permanent disability settlements, and/or death benefits to dependents. As you evaluate your current coverage, don’t forget to consider the insurance implications of your “remote employees.”
7. Professional Liability Insurance – protects against damages arising from the rendering of or failure to render professional services, including accusations of omissions, negligence, misrepresentation, violation of good faith and fair dealings, or inaccurate advice. If you work in professional services and don’t currently have professional liability insurance (aka errors & omissions insurance), now is the time to reevaluate your risk exposures.
8. Employment Practices Liability – safeguards your business in the event that you’re accused of violating employment laws and regulations, such as: wrongful termination, sexual harassment, discrimination, and breach of employment contract. Whether the allegations are credible or not, the cost of mounting a defense can cripple a small business.
9. Cyber Liability – addresses the risks that come with using modern technologies, including data breaches, system failures, cyber extortion, and compliance with emerging cybersecurity regulations.
There’s no one-size-fits-all solution when it comes to small business insurance, so it’s important to talk with an expert who can help you balance your risk exposures with practical coverage options.
We Can Help You with Your Small Business Insurance Needs
At Swarts, Manning & Associates, we provide a unique perspective on all of your commercial coverage options, and we help to determine which carrier best fits your business needs. We strive to find you the broadest coverage at the best available rate. Give us a call to get started: (833) 878-2820.
Each week, Swarts, Manning & Associates covers relevant topics for your business. Stay tuned to hear more discussions about managing your insurance and industry-specific tips.
