If you are a small business owner, you know that running a business is more than hanging a sign up front. Whether you are an individual consultant or have a thriving business with employees, business insurance can protect your company. But what kind? There are basic insurance policies that business owners should consider.
Business Owner Policy (BOP)
Small to medium sized businesses need to be protected by a basic BOP, or business owner policy. This policy features a range of coverage categories that protect against property and liability risks. This policy can be purchased separately or in a BOP package. Coverage with BOP can include:
- Property insurance for the contents of the business building.
- Liability coverage includes business legal liability if you or your employees cause bodily injury or property damage during business operations. Customers can be harmed by products sold, poor installation, and mistakes made.
- Business interruption insurance provides loss of income due to fire or other disaster, as well as additional costs if the company has to temporarily relocate.
The premium fee takes into account the location of the business, the condition and security of the building, the financial stability of the business, and the existing security features.
Basic Coverage Needs
In addition to property and liability insurance, small businesses can add a variety of different policies:
Commercial Vehicle Insurance
Company vehicles must be insured against liability claims. If employees use their own cars for work, their own individual car insurance plans will cover them if they are involved in an accident. However, as a warning, if employees use their own vehicles to deliver goods or services for a fee, the business is responsible for their vehicle insurance coverage.
Workers’ Compensation Insurance
Unless your employer is in Texas, or you only have three to five employees, your state may require your employer to carry workers’ compensation insurance. Whether your state requires your smaller employer to have worker coverage, it is wise to purchase a policy as protection against legal liability. Employer’s employer insurance covers the cost of medical care and part of the lost wages if the employee is injured on the job, regardless of who is at fault. In the case of the death of the employee, the benefits go to the family of the employee.
Additional Business Insurance
A variety of additional business insurance policies are available. Which one you choose will depend on your small business coverage needs.
Business Industry Obligations – A number of industry-specific policies are available, including for the following:
- Advertising and Other Creative Design
- Barber Shop and Beauty Salon
- Commercial housing
- Education Service
- Financial Services
- Health Office
- Legal Services
- Management and Marketing Consultant
- Pet Service
- Professional service
- Housing area
- Repair Service
Liability Errors and Omissions (E&O)
Supplements to liability, Error and Default (E&O) insurance, or professional liability insurance, cover defense and settlement costs. This BOP add-on is specific to the industry involved. E&O recommended professional services that include advising, designing and caring for people who need physical assistance.
Labor Practice Obligations
Protect your company from employees filing claims for discrimination, wrongful termination, or other employee-related legal complaints. This insurance covers the legal costs incurred when your company is at fault, as well as for the costs of defending whether you are guilty or not.
Cyber Liability Insurance
Cybercrimes can put small companies out of business because of the costs incurred by attacks. Common information stolen included email addresses, phone numbers, and billing addresses. Cyber liability insurance covers costs associated with legal fees, investigations, customer notices, identity recovery, computer repair, data recovery, and downtime.
Insurance for Directors and Officers
If company directors or officers impair profitability, directors and officers (D&O) insurance will cover business losses or legal investigation and defense costs. D&O generally does not cover intentional illegal acts.
HAZMAT Liability Insurance
If your company handles the transportation of hazardous materials (HAZMAT) via truck, train, airplane or ship, you need special coverage. In fact, it is legally required for the transport of hazardous materials. This insurance provides liability coverage for loading and unloading, transit, site cleaning and ongoing contamination due to spills.
Umbrella Insurance Policy
An umbrella policy, or business income insurance, can be purchased to provide extra protection beyond the limits of other company liability policies. It will start once the basic liability policy has been paid to its limit. Many business umbrella liability insurance policies cover beyond automatic liability and general liability policies, but may also include coverage above and beyond the limits of other purchased liability policies.
Small and medium-sized businesses are particularly vulnerable to costly disasters and negative events. Basic business insurance and additional policies specific to the company’s needs can help protect your business and keep it afloat. To explore your options and compare business insurance offers, visit the EINSURANCE business insurance website.