Running a business can be very satisfying and profitable. However, keeping track of operating expenses and dealing with risk factors is hard work. This is why business insurance is so important, and knowing the best way to insure a business will help you save time, money, and headaches. Here are 7 commercial insurance options many companies should have today. These coverage options can make the difference between staying in business and going under.
Product liability Insurance
You may work hard for many years to build your company into something special. However, it can all be brought down with one error or mistake from one of your employees or suppliers. You are responsible for the actions of your staff and business associates and here are some examples:
- A catering business worker is running short on time and fails to wash all the vegetables for the salad bar. As a result, several people become very ill and end up in the hospital.
- An auto airbag company tries to save money by using cheaper materials, and this causes the bags to sometimes deploy without warning.
- Equipment for a breakfast cereal supplier malfunctions and mixes gravel in with grain supplies.
These are only a few instances of product liability and product liability insurance covers three basic issues:
- Defective products
- Defective design
- Failure to provide adequate product warnings to users
Without product liability coverage, the business owner could be sued for millions of dollars in damages, including medical expenses and lost wages. If you manufacture, distribute, supply, or sell products to the public, product liability coverage is extremely important.
Errors and Omissions
Commonly called E&O, this insurance covers issues like defective or shoddy workmanship. For instance:
- An electrician doesn’t properly insulate a wire splice and it leads to a fire.
- A roofing company fails to seal off vent pipes after a roof replacement, and the house experiences major roof leaks and damage during a heavy rain storm.
- A financial planner offers advice which causes a client to lose a great deal of money.
- An IT company handles Internet security for a major corporation and the corporation experiences data theft.
Errors and omissions is part of professional indemnity coverage which an experienced insurance agent can explain to you.
Cyber Liability Insurance
In the past few years, just about every company has experienced data breaches and theft of information, leading to a number of fraud issues and very expensive lawsuits. If your business is involved in e-commerce or collects sensitive information from clients, you need to protect your company from widespread cyber crimes. Cyber insurance can cover these important issues:
- Loss of business
- Damage to equipment
- Notification costs
- Crisis management
- Investigation fees and costs
A data breach can cause customers to lose confidence in you and seriously damage your reputation. Huge lawsuits can result in insolvency. Without cyber insurance, most businesses today are taking major risks, which no kind of “self insurance” strategy can cover.
Inland Marine Insurance
If you bring products to customers or equipment to a job site (and your vehicle is damaged in an auto accident) your cargo could be destroyed. However, the real tragedy may come when you make a claim with the insurance company. Standard commercial vehicle insurance will not usually pay for cargo. You need to make sure you have inland marine coverage for your business. It pays for damage to things while they are in transit.
Maybe you think all you need is general liability insurance for your company. The truth is, this may not be enough. Depending on the nature of your business, you may want to consider the many benefits that come with an umbrella liability insurance policy. This liability covers many things that a standard liability policy will not touch and it is very affordable. It can cover issues like slander and libel and extend your general liability coverage limits in some cases.
If you are a contractor and your work comes from bidding on jobs, you’ll need to know as much as you can about bonds and how they can help your business. For example, a bid bond lets the client know that you will be there to start the job and a performance bond guarantees you’ll finish the job you started. Bonds are essential for government work and jobs for large corporations.
Builder’s Risk Insurance
When you are in the building or construction industry, your business is vulnerable while work is in progress. During this time, inclement weather, theft, or vandalism, can destroy all your hard work and this would be a major loss. A builder’s risk policy (course of construction) is designed to reimburse you for these losses, so you can afford to stay in business and take care of your clients.
When it comes to finding the best commercial insurance for your business, you don’t have to shop alone. A trusted insurance agent can help you by providing a free review of your insurance needs. Plus, you’ll have someone to find the best bonds for your company.
We are on your side, because it’s our business to look out for your best interests. Our professionals will help you get the lowest premiums, best coverage options, and can provide you with professional insurance advice. Ready to get started? Request your free quote here.