Gaps In Small Business Insurance
Biggest Risk For Small Businesses
Insurance for any type of business is not a luxury, it's a necessity. Failure to have adequate coverage can have catastrophic ramifications under a wide number of circumstances, including lawsuits, employee injuries, and disasters.
The specific insurance coverage a business requires is dependent upon the type of business and the way it is structured. With over seven million small businesses in America, this comes down to a wide array of coverage options.
Nevertheless, there are certain types of insurance that most small businesses need. These include Property Insurance, Liability Insurance, Worker's Compensation, Commercial Automobile Insurance and the comprehensive coverage provided under a Business Owner's Policy (BOP). The amount of coverage necessary will vary depending on the nature of your business.
Protect Your Business with Property Insurance
Property Insurance is designed to protect a business against perils such as fire or theft. If you run your business out of your home, you may think that your Homeowners Insurance policy will provide the property coverage you need. However, most Homeowners policies do not cover structures from which business is conducted.
Business Property Insurance compensates the business for buildings and other structures lost or damaged and also for property like furnishings, raw materials used in manufacturing, office machines, computer systems, inventories and other company assets. In some situations, it will also provide the money necessary to keep a business in operation while repairs are being made after a covered loss.
Property Insurance may also include coverage that compensates the company for equipment failures, removal of all sorts of debris after a fire or flood, water damage and other losses. One caution worth observing - some policies will not cover certain catastrophic events such as earthquakes, floods, terrorist attacks or other occurrences considered 'acts of God' without specific endorsements on the policy.
Protect Yourself from Litigation with Liability Insurance
Liability Insurance is extremely important in today's business operations since lawsuits are so prevalent. It protects the business owner against claims where the business is legally responsible for injury resulting from a defective product or lack of care that should have been exercised to protect another person or property.
It also protects against claims of errors in service resulting in real or perceived losses, or accusations that the business (including its principals) is responsible for creating a hazardous environment that places others at risk. It will also pay for medical bills accrued by others injured by the business.
Protect Your Employees with Workers' Compensation Insurance
Businesses with more than three to five employees are required by law in every state except Texas to carry Workers' Compensation coverage. This insurance is designed to cover the medical costs and some portion of lost wages incurred by an employee injured on the job. It is a no-fault coverage and applies regardless of who was responsible for the injury. It also will compensate an employee's family in the case of death. Many Workers' Compensation policies also include return-to-work programs that will provide rehabilitation services to injured employees to help expedite the recovery process.
Commercial Auto Insurance Delivers Protection for Your Company's Vehicles
Many businesses own automobiles, trucks, vans and other vehicles that are used in the business operations. Needless to say, these vehicles should have adequate insurance coverage. While a commercial auto policy can provide coverage for such vehicles, a commercial policy can also provide coverage for personal vehicles used for business purposes, where the owner's personal Auto Insurance may exclude it.
Like a standard personal auto policy, a Commercial Auto Insurance policy will pay the costs for others who incur bodily injuries or property damage for which the business is legally liable. If elected as a policy option, it will also cover damages to the vehicle resulting from an accident.
Is a Package Policy Right for Your Business?
Business Owner's Policies package up all the major Property Insurance, Liability Insurance and other coverages in a single policy crafted to be useful to most small businesses. Business Owner's Policies also include Income Insurance to compensate the company for losses incurred due to disasters like hurricanes, floods and other catastrophes. Only small to medium-sized businesses are normally eligible for this coverage.
What Coverage Makes Sense for Your Business?
There's not a cookie-cutter solution when it comes to Business Insurance. Your Business Insurance needs are unique. A Business Owner's Policy may make sense for you, or you may be better served putting together a customized insurance plan. Either way, it's imperative to protect what you've worked so hard to create with a Business Insurance policy.