Your General Liability policy doesn’t cover every situation.
By John M. Sadler
The best risk management step you can take to protect your business is to find a knowledgeable agent who understands your business, answers your questions fully, and can walk you through the process comfortably.
As a business owner, you face a wide variety of risks that can result in a claim being filed against you and your business. Negligent advice, negligence-based bodily injury or property damage, and employment-based offenses (such as discrimination) are just a few that come to mind quickly. A General Liability policy doesn’t cover every situation, which is why you need to consider additional policies to cover specific risks that your business faces.
Insurance can be complex to the uninitiated. To reduce the intimidation factor, here is a simple explanation of the six policies almost every business owner needs and why they’re needed.
Business Owners Policy
Every business is susceptible to damage, loss and lawsuits, any of which can cost you dearly. A BOP policy includes general liability and property insurance. Without protection, just one incident ending in an injury or a property damage lawsuit could bankrupt your business. Most business agreements with other entities require proof of general liability coverage. General Liability insurance protects your assets by covering events such as:
- slip-and-fall-type injuries to anyone visiting your business
- damage to the building you lease
- negligence by you that results in injury
- injury resulting from a product sold by you
- allegations of slander or libel
Professional Liability Insurance
This policy is also known as Errors & Omissions. Providers of professional services have a great responsibility toward their clients. Traditionally, only attorneys, medical professionals, CPAs, consultants, and engineers purchased this type of coverage. However, any business offering professional services is at risk to exposures that require this type of coverage. Your failure to perform professional services that results in economic damages to a client could trigger this coverage. And remember, pure economic damages without accompanying bodily injury or property damage isn’t covered by your General Liability policy.
This type of policy covers expenses you incur when an employee or uninsured subcontractor is injured at work or suffers a work-related illness on or off your premises. These include medical costs, lost wages, and certain lump-sum damages. It’s especially relevant to note most states require employers carry Worker’s Compensation, and penalties result for those that don’t comply.
Cyber Risk Insurance
We hear news reports of data breaches almost daily, and no business is immune. The damage to your business and its reputation can be costly when your customers’ personal and financial information is compromised. Cyber Risk insurance helps you manage the cost of repairing the breach and compensating your customers.
Whether you and your employees drive company-owned cars or personal vehicles for business purposes, you need a Business Auto policy. All drivers are at risk of an auto accident and injuries can result in costly medical bills — costly enough to bankrupt a small business. Even if your business does not own vehicles, the business still has vicarious liability when employees use their personal vehicles on business related trips.
No employer wants to think about employees embezzling or stealing personal property, outsiders forging signatures or hacking into bank accounts. Nonetheless, it happens more than anyone wants to admit. Sadly, it’s typically the most trusted workers committing such crimes. Crime insurance covers employee dishonesty, forgery and alteration, theft of money and securities, computer fraud, and theft via electronic funds transfer.
This basic information should enable you to start a conversation with your agent. A good insurance agent will review your business insurance needs and may suggest other types of policies to protect you and your business. He or she will also suggest that your policy be re-evaluated annually as your business grows, heads in a new direction, acquires new assets or experiences other changes.