5 Insurance Policies Your Business Needs To Survive

You’ve poured your heart, soul, time, and resources into building your business.

Is it protected?

Commercial insurance provides the safety net that your business needs in the event of an unexpected accident, injury, or even lawsuit. Because your cash reserves are better spent on growth and expansion than legal fees or claims.

Here are five insurance policies that will ensure your business stays safe and sound against nearly any catastrophe that may come your way.

General Liability

General liability insurance (GL) is the foundation policy of any strong insurance defense plan. GL protects your business against claims for third-party injuries or damage.

Remember the McDonald’s hot coffee case? In the 1990s, a McDonald’s drive-thru customer spilled a hot cup of coffee onto her lap while attempting to remove the lid. She received third-degree burns and needed hospitalization as a result. A lawsuit followed and a jury awarded the victim $200,000 in compensatory damages plus another $2.7 million in punitive damages. The judgement amount was later reduced by the judge, but the story still remains a cautionary tale for business owners.

Accidents can and will happen as a result of your business practices. No amount of safety training can prevent a customer slip and fall. Nor can it prevent one of your products from accidentally ending up injuring a customer.

When something does go wrong, general liability coverage is there for your business.

GL pays for lawsuits when your business is sued by third-parties (non-employees), covering the cost of medical and court expenses, lawyers’ fees, as well as judgements or settlements resulting from common lawsuits such as:

• Property damage
• Bodily injury
• Advertising injuries
• Reputation damages
• Copyright infringement

GL protects your business from the risk of third-party lawsuits. And in today’s litigious environment, that’s a must-have for every business.
 

Business Owner’s Policy

When you need more protection than a stand-alone general liability policy can offer, a business owner’s policy (BOP) can help you fortify your business.

BOPs aren’t for everyone, but if you’re a small business owner (like 99.7% of all employers in the US), then a BOP may be right for you.

Business owner’s policies combine the protection of general liability coverage with the protection of commercial property coverage -- at an affordable cost.

Commercial property insurance protects your business property as well as the assets you keep inside. Whether you rent or own your commercial space, property insurance helps you protect your building, inventory, equipment, and other assets from covered perils such as fire, theft, and vandalism.

Together, commercial property and general liability make up the 10 most common and costliest small business claims. According to an analysis by The Hartford, 4 out of 10 small businesses are likely to face one of these claims in the next 10 years. Business owner’s policies ensure your business is protected against these common claims.

The best part? BOPS tend to be more affordable and less costly compared to purchasing these two essential coverages as separate policies.

Commercial Auto

Commercial auto insurance isn’t just for businesses with large fleets of vehicles or those who employ delivery drivers. In fact, many small business owners are mistakenly relying on personal auto policies to protect their vehicles … and leaving themselves vulnerable in the process.

Personal auto insurance protects your personal vehicles when they’re used for personal purposes. Commercial auto insurance, on the other hand, protects the vehicles that are owned or used by your business.

You may need commercial auto coverage for any of the following:

• Vehicles used to pick up or deliver goods, supplies, or materials
• Vehicles used as a taxi or for ride-share purposes (Uber and Lyft drivers, that’s you)
• Vehicles owned or leased by your business
• Vehicles registered or titled to your business
• Vehicles used by your employees or other non-listed drivers - whether occasionally or often
• Vehicles specially equipped for your business, like food trucks or snow plows
• Vehicles equipped with ladders or permanent tool boxes for business purposes

Imagine being in an accident one bright, spring morning. You call your insurance company and find out that your personal auto policy won’t cover the extensive damage to your car.

Maybe you were transporting commercial goods. Or you had installed some permanent tool boxes to your work truck. Or maybe you were transporting a paying customer or making a delivery as part of your business.

Whatever the reason, you can be sure that a personal policy just isn’t going to be enough coverage for any vehicle that your business relies on to get the job done.

Cyber Liability

Criminal hackers working tirelessly to access your systems and steal confidential customer information - it sounds like the plot of a fiction novel, but it’s a real threat to business owners everywhere.

Cyber breaches and data loss can happen to anyone, from small businesses to the biggest corporations. While hacks to the “big guys” garner more attention and headlines, it’s actually small business who’re the biggest target for hackers and cyber criminals.

Cyber liability insurance protects your business from the aftermath of a cyber attack or data breach, should one happen to you. The protection of cyber liability extends beyond a malicious attack - you’re also covered if one of your employees should lose a laptop or your company tablet gets stolen.

Cyber liability coverage can cover the costs of a breach, including:

• Electronic data restoration
• Systems restoration
• Business interruption
• PR and reputation management
• Customer notifications
• Credit monitoring
• Lawsuits

Your customers expect that you’re protecting their data. From login and password information used to sign into their accounts on your website to credit/ debit card information provided at point-of-sale terminals to their addresses, birthdays, and other personal information - you have a duty to protect the data you collect.

If you are hacked, your customers could hold you responsible. And your general liability coverage against third-party damages isn’t going to cover you in the event of a cyber attack. Only cyber liability protection can ensure you don’t pay a steep price if you become the next victim of cyber criminal.
 

Workers Compensation

There are 28.8 million small businesses in the U.S. and 20% of those have employees on the payroll. Some of these employees have jobs with little risk of bodily harm or injury, while others are face a much higher risk of getting hurt on the job.

Workers’ compensation insurance protects your employees - and your business - from the high costs of medical expenses and lost wages if an employee is injured while performing their duties.

Whether it’s a grocery clerk who suffers from carpal tunnel due to the repetitive movement of waving goods over the scanner to the roofing contractor who falls from a two-story building, workers’ comp generally covers the costs associated with the injury, including:

• Medical expenses
• Missed wages
• Ongoing care and rehabilitation
• Funeral expenses and other death benefits
• Lawsuits

Providing workers’ comp for your employees isn’t just the right thing to do to protect the people who work hard for your business - it’s also required by law in most states. Even if you only have one employee, there’s a good chance that you need to carry workers’ comp. Fail to do so, and you could be facing fines or even jail time, depending on the state in which you do business.

Running a business can be complicated. Protecting your business doesn’t have to be. With the right business insurance policies in place, you can create a strong defense that protects your hard earned assets and cash reserves from the most common claims and accidents that may come your way.