If you’re pursuing commercial insurance for your business, you’re making the right call. Crime, oversights, and disasters can take a business straight into bankruptcy if it’s uninsured.
Many business owners learned this the hard way during record-breaking storms in New Orleans, Houston, and around the world. Why weren’t they insured? The most common reasons given were scarcity of cash, not realizing they didn’t have insurance, and not buying the right kind of coverage to be fully insured.
Here are some guidelines to finding commercial insurance coverage that’s the perfect fit for your business.
Start by contacting a reputable insurance company. It may be tempting to take insurance advice from a friend or relative, but beware of opinions from well-meaning non-professionals. They are often unaware of the latest laws and trends in insurance, and they may not understand the bigger picture of your business risks.
Professionals work with all kinds of businesses. They have resources at hand to determine the kinds of risks your business will face in the coming months and years. Day in and day out, they see industry statistics and diverse insurance situations. Their job is to protect you. An insurance agent can start a thorough risk analysis for your business that highlights all areas of exposure. It’s the first step in setting up total protection.
If you only have a general liability policy, that’s a great start, but it’s unlikely to cover your business completely. General liability policies cover accidents that happen on your property, including medical costs and damages assigned by a court of law. They may also cover advertising damage, libel, and slander.
But an unmodified general liability policy doesn’t cover intellectual property theft, copyright theft, brand infringements, or privacy violations. So if someone steals the design for a product you invented, or if they are causing damage to your business through unauthorized use of your brand, you’ll need additional coverage.
Do you have a fleet of delivery vehicles, or cars your employees use to visit clients? You’ll need auto insurance that specifically covers commercial vehicles.
Any business with employees should have employment practices insurance, which gives protection if someone sues over discrimination, retaliation, sexual harassment, wrongful termination, or other employment issues. This is one of the fastest-growing areas of insurance, with many new lawsuits making their way through the courts.
And don’t forget the complex and growing issue of cyber liability. If you accept payment with credit cards or manage a database of customer info, you’re at risk of cyber attacks that cause damage to your customers. Cyber crime now costs the global economy $450 billion a year but more than half of business owners have no protection against it.
SCORE, a nonprofit business that works in conjunction with the U.S. Small Business Administration, strongly recommends an annual review of your insurance coverage. It’s the best way to make sure new aspects of your business, like property, vehicles, employment, and intellectual property, are all covered.
Check policy expiration dates each year and touch base with your agent. This ensures your business will stay fully covered well into the future.