The work you do may require any combination of the following types of business insurance for optimal risk protection.
General Liability Insurance for Your Business
Regardless of your industry, your business could probably benefit from the protection General Liability Insurance offers. General Liability is standard coverage for most businesses, and the starting point for any risk management insurance program.
General Liability Insurance offers protection from lawsuits alleging your business caused physical injury or property damage to a third party. If, for example, a customer in your storefront tripped over a loose tile or carpet, broke her wrist, and sued your business for damages, your General Liability Insurance would kick in.
In addition to paying for the cost of your legal defense (which might include court costs, lawyers’ fees, and more), your General Liability coverage pays for any judgments or settlements you’re found liable for, up to the limits of your policy.
If your business meets certain guidelines and has a fairly low risk profile, you may be able to purchase your General Liability Insurance through what’s called a Business Owner’s Policy, or BOP. The BOP combines General Liability and Property Insurance for a single discounted premium.
Your insureon agent can help you determine whether you’re eligible for a BOP and how much General Liability is adequate for your business.
Property Insurance / Errors & Omissions Coverage for Your Business
Whether you operate heavy machinery every day or do most of your work from a laptop computer, your business property is what allows you to serve your clients and maintain your revenue stream. Property Insurance allows you to protect your business assets from damages and theft.
For instance, if an electrical storm caused a power outage that fried your electronics, you would be able to file a Property Insurance claim with your insurance provider to recover funds to purchase a replacement.
When you discuss Property Insurance with your insureon agent, be sure to ask whether it makes sense to insure your property for its current value or its full replacement value. The former allows you to save money on premiums but provides lower payouts in the event of a claim. The latter costs more initially, but provides you with adequate money to purchase new gear if necessary.
Professional Liability Insurance / Errors & Omissions Coverage for Your Business
Even the most careful business owners can benefit from Errors and Omissions Insurance (also called Professional Liability or Malpractice Insurance). This is because everyone makes mistakes and because it’s becoming more and more common for disgruntled customers to initiate a lawsuit when they are dissatisfied with someone’s work.
Errors and Omissions Insurance protects you from the costs associated with lawsuits alleging that your professional performance (that is, something that you did as part of performing your job) caused a financial loss. In addition to paying for any settlements or judgments for which you are found liable in such cases, E&O Insurance covers the cost of your legal defense, which, between lawyer’s fees and court costs, can easily run into the tens of thousands of dollars.
Even business owners who have never faced a lawsuit and who are careful in executing their work should consider investing in Errors & Omissions Insurance. A single lawsuit can cause significant financial losses when you don’t have a cushion to rely on.
Umbrella Insurance / Excess Liability Insurance for Your Business
Umbrella Insurance offers you a way to extend the coverage you have on your existing insurance policies. If, for example, you are found liable for $750,000 in damages and the limit on your General Liability policy is $500,000, you would be responsible for the remaining $250,000. Without Umbrella Insurance, that money would have to come out of your (or your business’s) bank account.
Umbrella Insurance offers two main benefits: first, it’s convenient. With the purchase of a single Umbrella Insurance policy, you can extend the coverage limit on several of your other insurance policies. Second, it’s inexpensive. Compared with purchasing multiple policies with higher limits, purchasing Umbrella Insurance offers a bargain.
One important limit of Umbrella Insurance, however, is that it cannot be applied to an Errors & Omissions policy. If you need higher limits on that type of insurance, you’ll have to purchase a policy with a higher limit.
When you talk with your insureon agent, be sure to ask whether Umbrella Insurance makes sense as a way to extend the protection your business enjoys.
Workers’ Compensation Insurance for Your Business
Workers’ Compensation Insurance offers coverage for injuries and illnesses your employees incur during the course of doing their jobs. In the event that a sick or injured employee sues you for damages related to his or her injury, your Workers’ Compensation Insurance covers your legal costs as well as any settlement or judgment costs.
At present, most states require most businesses to carry some form of Workers’ Compensation Insurance. Some states even mandate that sole proprietors have some Workers’ Comp to protect themselves. In other states and certain industries, you may be able to exclude yourself from a Workers’ Compensation policy to save money on premiums.
Your insureon agent can let you know what kind of Workers’ Comp you need to carry, whether you need to insure 1099 contractors in addition to W2 employees, and what policy limit makes sense for your work.
Manage your risk.
For many businesses, buying insurance is only one aspect of managing the overall risk your business faces. Many companies can reduce their overall risk level (and even the cost of their insurance, in some cases) by implementing specific risk-management strategies. Be sure to ask your insureon agent about any risk-management strategies you can implement to improve your business’s risk profile.
Don’t underestimate the value of Workers’ Compensation Insurance.
Even if your business has a low risk profile, your employees are exposed to some risk. Office workers, for example, can develop repetitive-use injuries such as carpal tunnel syndrome, which can be costly to repair. If laws in your state do not require you to carry this type of coverage, discuss with your agent whether it’s a good idea for your business.