New business owners want to keep their operating costs low. They may not be exposed to a lot of risk at launch and will only purchase the required insurance like workers’ compensation and Commercial General Liability coverage. Many business owners neglect to review their insurance policies as they grow in size, profit, and liability.
The Reasons Your Basic Coverage May Not Be Enough
Four types of claims are typically covered by Commercial General Liability Policies.
A bodily injury
No property damage or loss
Personal injury such as libel and slander.
o advertising injury.
Commercial liability insurance can be quite affordable, but the costs of defending a claim is not. This is where General Liability comes into play. General Liability will pay for all damages, legal fees, and settlement costs up to the policy limits. In a Business Owner’s Policy, (BOP), general liability is often included with property coverage.
BOPs are specifically designed for low-risk small- and medium-sized businesses. It must include tangible assets such as computers and office furniture. In some cases, it may even cover the loss of business income.
Talk to your broker about updating your coverage
Business owners should review their policies with their broker every so often, especially when there is significant growth or change. This will help ensure that they have the right amount protection. Business owners also need to be aware that the business environment is becoming more complex.
Protect All Bases
Many businesses have taken the necessary steps to protect against injury and property loss claims, which are the traditional forms of commercial insurance coverage. However, they may not have considered protecting themselves against negligence claims. E&O insurance (also known as Professional Liability insurance) protects individuals and organizations from professional negligence claims. It covers a wide range of professional services.
Vendor insurance is another type of coverage that businesses who deal with international vendors may want to consider. Some foreign companies won’t do business with companies outside their own country if they don’t have vendor insurance.
The Best Ways to Upgrade Small Business Insurance
Businesses can increase their protection easily by increasing their Commercial General Liability coverage, or adding supplemental insurance on top of their existing Commercial Liability insurance policy. There are many types of supplemental insurance:
o Auto/fleet Insurance: Covers injury, damage, or theft to company-owned vehicles as well as employees who are involved in an accident while driving personal cars for company business.
o Business interruption insurance: Covers the loss of normal business income if it is a negative impact on a company’s bottom line. It reimburses companies for income lost until they can resume full operations.
o Third Party Fidelity/employee dishonesty Insurance: This covers the costs of losses if an employer steals money, equipment, or other assets from the owner of the business or one of its clients.
Umbrella insurance: Offers extra coverage for claims that exceed the limits of an underlying policy.
Don’t add too much supplemental insurance. The costs could quickly mount. It is important for business owners to research ways to reduce their premiums. This can often be accomplished with just a few steps: keeping duplicate records off-site, installing an alarm system, and researching the number claims against companies in the same industry. The business owner should inform their broker if there are fewer lawsuits.
There will be different risks and coverage requirements. There are many options when it comes to commercial liability insurance policies. Business owners should make it a point of talking with their brokers about their coverage. Usually, this is when their policy is due for renewal.