Must-Have Policies for Businesses
- Business Owners Policy – Covers liability for lawsuits, income insurance, and property damage.
- Workers’ Compensation – Covers your employees if they get injured on the job.
- Data Breach Insurance – Protects your business from the effects of data theft.
- Health & Life Benefits – Offer medical and life insurance options to your employees.
- Errors & Omissions Insurance – Protect your business if your advice our services negative impact a customer.
- Employment Practices Liability Insurance – Protect your business if you have violated an employee’s rights.
- Umbrella Policy – Add increased coverage limits on top of your standard policy.
In seasons of economic turmoil or during a natural disaster in an area, most businesses in that location suffer. But some businesses will suffer more than others. Big businesses often have massive support systems and unfettered access to privileged information. That is why it is easier for them to survive a crisis. Small businesses are often fragile and lack the shock absorbers to withstand the impact of adverse events in their environment.
That is why when things go wrong, small businesses are the first to suffer. Even though big businesses suffer, they do not have to close shop. They may lose money or downsize, but the enterprise can continue through the hard times. That is why, as a small business owner, you must be well-informed about the dangers that exist in your environment and be intentional about the steps you take to protect your businesses from those identified threats, advises ParamountPMR.com.
The biggest threats to small businesses come from within rather than from outside. Some of these significant threats include the constant risk of property damage and liability claims. These threats are unlike hurricanes or economic recessions, which are occasional events. Every day your business exists, there is a risk of property damage and the possibility that someone may file legal claims against you. Is your business prepared for such an event?
These threats are ever-present, and you have no control over them. The only way to deal with these unforeseen problems is through insurance. That is why you must pinpoint the risks and identify the specific insurance policies that offer protection against those risks. What kinds of insurance does your business need? Below, we list the most relevant insurance policies for a small business.
Essential insurance policies for a small business
Business Owners Policy (BOP)
BOP is the primary insurance policy you will need as a small business. This policy meets the needs of small businesses. It combines the various types of insurance the business will likely need into one single policy. Typically, a BOP policy will incorporate:
Income Insurance: Income insurance or Business Interruption Insurance compensates the business owner during a disaster. Since a crisis would typically disrupt the business’s operations, the policy will cover lost income or the additional cost of doing business from a different location.
Property Damage: If any of the property used for a business is lost or damaged through fire, theft, or a covered peril, BOP will compensate the business for that loss. Typically, not all belongings within or outside the business premises are covered, even if they are the business’s property. The policy will often specify what is covered and what is not.
Liability Coverage: This covers the medical bills for an injured customer within your business premises. For instance, if a customer slips and falls, the policy will pay for any harm they suffer. Liability coverage may also cover the cost of lawsuits by customers against the business.
The advantage of the BOP is that premiums for a BOP are usually lower than the total costs of the individual coverages included in the BOP. However, only small to medium scale businesses qualify for this policy. To be eligible for a BOP, the insurer will look at the size of your business and other details of your operations.
Additional insurance coverage for small businesses
As good as a Business Owners Policy (BOP) is, it does not cover all the insurance needs of your business. For instance, if your business has an outdoor sign, the property insurance component of the BOP may not cover that sign. That is why you need to augment the coverage offered by BOP by buying additional insurance. Some extra policies your business might need are:
1. Workers’ Compensation
This ensures that your business does not have to pay out-of-pocket if an employee suffers work-related illness or injury. The policy will cover their medical bills, wages during the period they cannot work, disability benefits, and funeral costs (if the individual loses their life).
2. Data Breach Insurance
This protects your business from the risks associated with technology. Data breach insurance protects the business if it loses its valuable data through destruction or violation of its technological systems. It also protects the business if a customer’s data is compromised.
3. Health and Life Benefits Programs
Protect yourself and your employees by offering customized group health, life, and disability insurance plans.
4. Other Policies
Depending on the nature of your business, you may also need one of the following:
Errors and Omissions Insurance: This is for businesses that give advice, offer recommendations, represent others or provide physical care. It protects the business if customers suffer losses or injury due to the businesses’ actions or recommendations.
Employment Practices Liability Insurance: This will protect your business if you are guilty of violating an employee’s rights.
Umbrella Policy: This policy will provide coverage over and beyond the limits of your other insurance policies.
Contact A and H Insurance today to review your business insurance coverage and learn how to insure your company properly. We are an independent agency with local insurance agents that get to know your business’ needs and work with multiple insurance carriers to get you the right policies at great rates.
