02 Oct 8 Often Overlooked Business Insurance Policies
It is good business to control your insurance costs, but not when it leaves your company exposed to risk. Here are 8 often overlooked business insurance policies that you should consider for full protection.
Employment Practices Liability Insurance (EPLI)
Employment Practices Liability Insurance protects employers against various employee claims. These include discrimination, wrongful termination, harassment, and unfair work practices such as failing to promote a worker.
Every business faces these risks, but small and medium-sized business is often the most vulnerable to employment claims. Either they do not have an employee handbook, or it doesn’t outline hiring, discipline, and employee termination policies and procedures. They probably don’t have a legal department to advise them either.
Fortunately, most times you can add an endorsement to a Business Owners policy (BOP) or a general liability policy making this coverage very affordable.
Cyber Liability Insurance
Many business owners underestimate the risk of cyber incidents, and it can cost them dearly. All businesses are susceptible to cyber breaches, but especially start-ups and small to medium-sized business.
According to Verizon’s 2017 Data Breach Investigation Report, 61 percent of cyberattacks target smaller enterprises. Why? They have fewer resources and they don’t realize the risk. A Symantec study revealed 77 percent of small business owners believe they have little to fear, when only 17 percent have cyber security protection.
The costs to a business are very significant too. According to the Ponemon 2017 State of Cybersecurity in SMB report, the average cost of a cyberattack is $2,235,000.
Professional Liability Insurance
Whether you’re a solopreneur or run a modest business enterprise, when you provide a service or advice to clients you’re always at risk of lawsuits. Regardless if the client has a valid claim, you bear the costs unless you have proper insurance coverage.
Professional liability insurance protects you from claims from discontented clients. Missed deadlines, an inability to complete a project, failure to meet the client’s expectations, or claims your advice lead to a loss can all trigger lawsuits. Personal liability or an umbrella policy can’t protect you either when you’re sued for professional services. Fortunately, insurers offer specific professional liability solutions to address your industry and needs.
Non-Owned Auto Insurance
Commercial auto insurance provides coverage for vehicles your company owns. However, it does not provide coverage for employee-owned vehicles.
If your employees use their vehicles while conducting your business it poses a major risk. If your employee is at-fault in an accident or causes damage to property, the aggrieved party could sue your employee and your company.
Consequently, non-owned auto insurance is the only way to provide adequate protection if employees use their cars for anything related to your business.
Global Business Insurance
Traveling to foreign destinations, exporting goods or providing services to new markets, and operating in other jurisdictions without adequate insurance drastically increases risk.
If your U.S. business wants to expand outside of the nation, you need global business insurance. International trade makes everything more complicated. E-commerce is especially worrisome, since customers are anywhere in the world. While this is great for sales, it can also be a litigation nightmare and very costly if something goes wrong.
Global business insurance provides broad coverage and a single contact point in the U.S. for questions and claims.
Even if your business isn’t on a flood plain, it doesn’t mean it isn’t a risk. At least a quarter of claims are from outside of high-risks areas and your Commercial Package Policy (CPP) or Business Owners Policy (BOP) business property insurance doesn’t cover it. You need to buy a separate policy from National Flood Insurance Program (NFIP) via your insurance agent.
Commercial flood insurance provides up to $500,000 of coverage for your building and up to $500,000 for its contents. You can also buy excess insurance coverage which includes protection against business interruption.
Inland Marine Insurance
Don’t dismiss this coverage, because you don’t own a boat. The purpose of this insurance evolved over the years to include a wide range of property and materials while in transit.
Business property insurance is location specific. Basically, it only covers what’s in or nearby your place of business. If your business transports property by car, truck, airplane, or boat you need inland marine insurance to protect it.
Inland marine insurance covers lost or destroyed property and may also cover delays that impact your company’s finances.
Contingent Business Interruption Coverage
When your business depends on suppliers to deliver their goods and services consistently, you’re also susceptible to their risk. If something untoward occurs and they can’t deliver, you earn less income and may spend more due to business interruption.
Contingent Business Interruption coverage can reimburse you for lost income caused by a partial or total supplier loss. It is optional coverage you can add to your commercial insurance policy.
Rely on a skilled, independent insurance agent to align your business needs with appropriate insurance products. It is a complicated industry and you need a knowledgeable partner by your side. They can access multiple products, assess their suitability, and recommend what best serves your business and your budget.