Determining Your Business Insurance Needs

Ultimately, determining your business insurance needs rests with you as the owner.

Many of these businesses and their owners get big surprises and out of pocket expenses because they don’t understand their insurance coverage.  We often hear after an incident, “I thought it was covered by my business insurance.”

Sadly, it’s estimated that 75%-90% of all businesses are underinsured.

Any business needs some type of business insurance to protect it and the assets of the business against potential risk.  Many types of insurance and coverage are available to you to protect your business.  Some insurance is mandatory in many states such as vehicle insurance and workers compensation insurance.

Check with your licensed insurance professional or state department of insurance to determine what is mandatory in your location.  The additional insurance needed to protect your business will vary by industry and products and services provided.  An architect may need professional liability insurance and a convenience store may need product liability insurance.

What follows are types of insurance and coverage available to business.  Check the list and compare it to your present coverage.  Any gaps or red flags should be addressed immediately with your licensed insurance professional.  We’re assuming property, general liability insurance, and workers compensation are part of your present package.

  • Business Interruption Insurance: This covers losses and expenses due to fire or other incidents.  The policy covers salaries, rent, utilities, and even lost profits.
  • Directors and Officers Liability:  This protects the officers and board members from suits brought against the company and its officers.
  • Employment Practices Liability: This covers against lawsuits of sexual harassment and wrongful termination.
  • Website Insurance:  This covers a variety of claims relating to the company website.  It includes copyright infringement, and data breach.
  • Errors and Omissions: Also known as professional liability insurance.  This insurance protects against legal claims of malpractice or failure to perform to professional standard.
  • Product Liability Insurance: This protects both sellers and manufacturers against defects and injury as a result of product use or components.
  • Health Insurance:  Major medical insurance offered to employees.

Take the time to discuss what is, and more importantly, what is not covered under your present business insurance package with your agent.  In addition, the coverage noted above is just a starting point.   Don’t get surprised when it is too late.

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