Business insurance, known also as Commercial Lines insurance, gives you the chance to recuperate after losses you wouldn’t otherwise be able to afford on your own. It is a financial safety net that allows you to keep operating smoothly during uncertain, risky situations. Being smart about assessing your risks, and prescient in your choice of coverage can make or break your business. Small businesses in particular are vulnerable since even a trivial lawsuit can potentially shut them down. If you would like to find out more about what to be on the lookout for when purchasing the right commercial insurance for your business, you’ve come to the right place!
Understand Why Your Business Needs Insurance
Perhaps you own a charming local restaurant. It’s a well-loved spot in your neighborhood and a focus point for the community. But one day, a flood causes severe water damage, destroying your floor tiles, even your walls. Your business can’t keep operating until the water damage has been remedied, and you lose more and more revenue with every passing day. You call your insurance agent, only to find out the policy doesn’t cover flood damage. You’d be fine if this was caused by burst pipes from freezing weather conditions, but floods were excluded from your policy. The cherry on top of this is the fact that your restaurant is in Florida. Sadly, this situation is more common than we think. Many people are not aware that flood insurance is not covered as a part of your typical commercial line insurance. It needs to be purchased separately, or if you’re lucky, you could try and qualify for the National Flood Insurance Program.
Even the most competent business owner is likely not an expert on the finer details of insurance contracts, and evaluating the specifics of your policy remains a major challenge. If you feel uncertain about properly assessing the risks for your particular business, you’re not alone. The ins and outs are complex, so most insurance companies don’t communicate directly with policyholders – they use the services of insurance agencies instead. Agents are the ones who walk you through the intricate details of your coverage from your particular policy. They send you policy documents and remind you of upcoming updates and renewals. They handle all of your insurance-related obligations and assess the location and industry-based risks. The most efficient, forward-thinking insurance agents today use automated SaaS solutions to help mitigate the manual nature of their tasks. They use innovative app technology and triggered email campaigns to reach out to policyholders, such as the automated process used by PathwayPort. Insurance agents who adopt these high-tech solutions are the only ones capable of providing a consistently high quality of service to all clients, at all times.
What Does Business Insurance Cover?
Most businesses opt for commercial property, auto, and casualty insurance. Property insurance, in this case, protects all of your commercial property from damage and theft. Casualty insurance, on the other hand, covers any losses and legal fees if other business entities or individuals file charges against you.
The following are the most common types of commercial insurance:
- Commercial property insurance and auto insurance: If any of the insured inventory or equipment gets stolen or damaged, you can consider filing a commercial property insurance claim. Theft, burglary, fires, civil unrest, and storms are typically covered under most property insurance policies. If you want protection from floods or earthquakes, however, you likely have to purchase it separately. This is why it’s important to know the risks in your area and prepare accordingly. While private auto insurance would typically include yourself and family members, commercial auto insurance covers your company vehicle, as well as the company vehicles of your employees. It can cover anything from a fleet of taxis to company trucks, or just a car you usually drive while on business trips. A bit pricier than private auto insurance, it covers damage, bodily injuries, legal fees, and medical bills for yourself and the other driver.
- Product liability and professional liability insurance: If you or anyone working for you makes a mistake while providing a professional service and charges are brought against your business, you can file a professional liability claim. Similarly, if one of your products malfunctions and damages a clients’ health in any way, your product liability insurance would cover any medical and legal fees.
- Worker’s compensation and Employment Practices Liability Insurance (EPLI): Employees get hurt or sick at work all the time. Worker’s compensation insurance helps you cover the employees’ medical costs and wage replacement, as well as any loss of profit caused by their absence. Employment Practices Liability insurance covers discrimination, wrongful termination or demotion, as well as retaliation and sexual harassment lawsuits brought against you. The policy typically covers legal defense fees, as well as out-of-court settlements.
It is your job as a business owner to ensure that you, your clients, and your employees are kept safe. Insurance helps you pay for damages to your commercial property, as well as cover any lawsuits, legal fees, or contract disputes that would otherwise deplete your savings, or even put you out of business. Know exactly what your policies cover and what coverage is excluded, and only trust reputable, licensed agents.