A rider is an extra protection added to an insurance policy in exchange for paying a higher premium to an insurer.
What is an insurance rider?
An insurance rider is a modification to an insurance policy. Also known as an endorsement, it allows you to adjust the terms of your insurance to protect your business without having to buy a whole new policy.
Why are riders necessary?
Riders are necessary because general liability, commercial property, commercial auto, and other forms of small business insurance don’t allow for much customization other than increasing or decreasing coverage limits or deductibles. Riders are a way to modify your protection to fit your specific business requirements without having to buy a whole new policy.
What are some common ways you can modify your small business insurance with riders?
You can adjust your small business insurance with riders in many different ways, including:
- Covering commercial property that isn’t stored at one fixed location with a commercial property floater rider
- Extending the period in which a business can file a claim for a claims-made policy, such as professional liability or errors and omissions insurance
- Adding coverage for specific types of property that commercial property insurance policies normally exclude, including building foundations, underground pipes, drains, and fencing
- Adding an endorsement to workers’ compensation insurance that extends benefits to casual employees for whom state law doesn’t mandate coverage
- Modifying business interruption insurance so that it kicks in when a primary supplier, partner, or customer shuts down (known as contingent business interruption insurance)
- Adding a communicable disease rider to business interruption insurance or another policy to cover losses related to infectious diseases, such as the coronavirus
Since virtually every type of business insurance has multiple riders or endorsements available, there are numerous opportunities to customize your protection. Check with your licensed Insureon agent to discuss your specific needs and options.
Are insurance policy riders always cost-effective?
Not necessarily. If a rider duplicates coverage you already have in another policy or is too expensive, you may want to forgo it.
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