Specialty insurance

Specialty insurance provides financial protection to small businesses that face complex or niche risks, which most standard small business insurance policies won’t cover.

For small businesses that own expensive specialized equipment, sell rare assets, or conduct international business, specialty insurance offers customizable coverage to fill gaps in policies, help manage unusual exposures, and financially protect the business.

These businesses can include manufacturers, construction companies, and global trading firms.

Although specialty insurance policies operate similarly to standardized coverage, they can be tailored to a business’s unique risk profile when one-size-fits-all policies aren’t enough.

Specialized underwriters can help create coverage that can:

• Cover risks deemed too unusual or complex by standard insurance markets.
• Fill coverage gaps created by standard policies.
• Provide protection for specific events or items, such as weddings or classic cars.

Standard insurance generally provides broad, uniform coverage for common risks, such as general liability, commercial auto, and workers’ compensation insurance.

Specialty insurance is tailored to unique, complex, or high-risk situations that are typically excluded from standard coverage. These may include luxury assets, cyber risks, and specialized equipment.

Keep in mind that the definition of specialty coverage varies by insurance carrier. What one insurer considers standard, another might classify as specialty if it falls outside of their typical policy offerings.

Here’s how specialty and standard insurance policies stack up:

Insureon offers a variety of specialty insurance solutions to cover your small business’s unique, high-risk insurance needs. Examples of specialty insurance include:

Environmental insurance, also called pollution insurance, handles claims related to environmental mishaps, including mold, noxious odors, and air and water pollution. This policy will pay for any damage caused by a covered incident, including:

• Bodily injuries
• Property damage
• Pollution cleanup
• Business interruptions

This type of specialty insurance can be added as an endorsement to a general liability insurance policy, as most standard policies have an “absolute pollution exclusion.” For construction professionals, it's called contractors pollution liability (CPL) insurance.

Standard insurance policies often exclude coverage for operations, employees, and assets outside of the United States. Global insurance provides essential coverage for U.S. businesses with a variety of international exposures, including:

• Business auto
• Commercial property
• Kidnap and ransom
• Commercial general liability

Crop and agriculture insurance is a type of specialty property and casualty coverage. It protects companies that produce, process, and distribute agricultural products from the unique financial risks they face, such as losses due to:

• Low production
• Price drops and market volatility
• Natural disasters
• Plant disease and irrigation issues

Many additional insurance policies cover complex risks for small businesses. While most insurance providers require these to be purchased as specialized coverage, Insureon offers them as standard, cost-effective coverage for every small business.

These policies include:

Professional liability, also called errors and omissions (E&O) insurance, is essential to small businesses that provide services and expertise, such as accountants and IT consultants. It covers your legal fees if a dissatisfied client sues over:

• Work mistakes and oversights
• Undelivered services
• Negligence
• Breach of contract
• Missed deadlines

As cyber threats and data breaches become more common—and more costly—for small businesses, cyber liability insurance has become more critical. This policy helps companies recover from cyberattacks, covering costs for:

• Data breach response measures
• Cyber extortion payments
• Crisis communications and PR services
• Legal defense costs, like settlements and judgments

Inland marine insurance is important coverage for small businesses that ship goods, transport tools, or own trucks with high-value equipment.

It protects insured property no matter where it’s located, such as the expensive tools and equipment that contractors haul to different jobsites. Should something get damaged or stolen, an inland marine policy will pay to repair or replace the items.

Commercial umbrella coverage provides an extra layer of coverage for liability claims made on general liability, employer’s liability, and commercial auto insurance. An umbrella policy can boost coverage for all of these policies in $1 million increments.

Small businesses often buy this coverage if:

• A client’s contract requires higher limits
• Their business gets a lot of foot traffic
• The company owns a fleet of vehicles
• They work in a hazardous industry

Similar to umbrella coverage, excess liability provides an extra safety net in case of liability claims and litigation. The difference is that an excess liability policy adds a layer of protection to one designated policy, such as your general liability policy.

If an expensive lawsuit exhausts your standard policy limit, this coverage kicks in to pay the remaining claim.

Management liability insurance is a combination of policies that covers many small business risks faced by senior-level leadership, including lawsuits over discrimination, mismanagement, and fraud.

These policies can include:

• Fiduciary liability
• Directors & officers (D&O)
• Employment practices liability (EPLI)
• Commercial crime

Many small business owners purchase surety bonds, fidelity bonds, license and permit bonds, and other business bonds to work, sign a client contract, or draw new business.

A bond is a legally binding contract between three parties—a business, a client, and an insurance company—that acts like a line of credit to ensure your liability and prevent lawsuits.

If the terms of the bond are broken, the insurer reimburses the client. Some bonds, such as surety bonds, require you to pay the insurer back.

Excess and surplus lines (E&S) insurance provides coverage for small businesses with unique or catastrophic risks that standard insurers won’t cover. This can include businesses in new or high-risk industries and those that face natural disasters, like earthquakes and hurricanes.

E&S insurance is sold by non-admitted carriers that have more flexibility in the insurance solutions they can offer. This type of specialized coverage can apply to most property and casualty (P&C) insurance policies, including general liability, commercial property, and directors and officers (D&O) insurance.

Small business owners often buy E&S insurance if they:

• Have a high-risk profession
• Have a claims history
• Work in a new or emerging industry
• Face natural disasters

A commercial package policy (CPP), like a business owner’s policy (BOP), bundles general liability with commercial property insurance to protect businesses against common risks and damage in a more convenient, cost-effective way.

CPPs are often purchased by small and medium-sized businesses with higher risks, allowing policyholders to tailor the types of coverage and coverage limits based on their specific needs.

If you own a building with both residential and commercial spaces, you may need mixed-use property insurance. This specialized form of commercial property insurance provides property and general liability coverage that a standard policy does not.

Small businesses that face complex or unusual risks should consider specialty insurance. Although this coverage is recommended across many industries, these are the ones that often secure specialized protection:

• Accounting firms and financial institutions
• Food trucks and restaurants
• Commercial landlords and property management companies
• Trucking companies
• Wholesalers and distributors
• Technology companies

At Insureon, we’re not just selling insurance. We’re trusted advisors who get to know small business owners so we can understand the risks they face every day and help them secure affordable insurance coverage from top-rated U.S. insurance carriers.

Get free quotes by filling out our easy online application. You can also speak with a licensed insurance agent to understand the costs of standard and specialized insurance.

Once you find the right policies for your small business, you can begin coverage in less than 24 hours and get a certificate of insurance (COI) for your small business.