Guest Poster: Ashley Napier, 3000 Insurance Group - Business Insurance Basics

Today's guest post comes from Ashley Napier. Ashley is a Producer at 3000 Insurance Group. She helps business and individuals make sense of insurance because, let’s face it, it can be confusing. She is persistent in helping find policies that best fit her client’s needs so that they may feel comfortable knowing they have coverage that is right for them. I asked Ashley to write a post because I come across a lot of business owners that ask what are the best ways to protect their businesses. I hope you enjoy the post. 

Small businesses inherently face a number of exposures, many of which are insurable.  It’s difficult to identify all of those exposures yourself, and more challenging to determine how to reduce the risk and whether to insure them or not. Here is a list of items to help you get started evaluating what insurance policies your business needs.

•           Property Insurance

Property holdings are often a small business owner’s largest asset. Therefore, for the long-term security of your small business, it is vital that you evaluate potential threats to your business property, whether its buildings or contents or both. Coverage can come in many forms to suit your specific needs. When requesting coverage, ask your insurance agent if your property is covered at replacement cost or actual cash value, and to explain how the two are different.

•           Business Interruption

Traditional Property Insurance does not cover a move or the loss of income while a permanent business location is being repaired due to a loss, like a fire or tornado. This invaluable, though often overlooked, coverage safeguards your business by covering operating expenses and lost income while the permanent business location is being repaired. This will allow you to continue to pay ongoing bills, maintain payroll and, if needed, reallocate current employees.

•           Commercial General Liability (CGL)

CGL policies provide coverage for claims of bodily injury, physical injury, personal injury (libel or slander), advertising injury, and property damage as a result of your products, premises, or operations. A CGL policy with adequate coverage limits enables you to continue normal operations while dealing with real or fraudulent claims of negligence or wrongdoing, and also provides coverage for the cost of defending and settling claims.

•           Workers Compensation

Small businesses have the responsibility to indemnify workers who are injured or become ill during the course of their employment. Workers compensation insurance provides this coverage. Not only is carrying workers compensation insurance prudent, it is required by law in most states. The good news is, workers compensation premiums are on the decline, so now is a good time to shop for this coverage.

•           Cyber Liability

Small businesses often lack a formal IT department or even basic internet security measures, which leaves them vulnerable to cyber-criminals. If your business stores customer information electronically, it is crucial that you have robust security measures in place. In addition, having specialized technology coverage, such as Cyber Liability Insurance, can help protect your business against financial or reputational damage from cyber-attacks, data breaches, and other Internet-based exposures.

•           Employment Practices

From the moment you begin the pre-hiring process until the final goodbyes at the exit interview, you are at risk for an employment lawsuit. In fact, three out of five employers will be sued by a prospective, current, or former employee while they are in business. Although many lawsuits are groundless, defending against them is costly and time-consuming. Employment Practices Liability will insure your company against wrongful termination, discrimination (e.g., age, sex, race, disability) or sexual harassment lawsuits.

•           Professional Liability  

Sometimes called ‘Errors and Omissions insurance’ or, in the medical profession, ‘Medical Malpractice’ insurance, is the only coverage that will protect you against mistakes you may make in the course of practicing your profession. This protection typically includes payment for judgments/settlements, up to your policy limits, but also includes assistance with defense costs.

•           Hired & Non-Owned Liability

It’s likely your employees need to operate vehicles for tasks such as errands, deliveries, or appointments. If employees use their personal vehicles for business-related activities and get into an accident, your organization could be held liable. Typically, an employee’s personal auto policy will provide primary insurance to both the employee and the business. However, there is the chance that charges will exceed the employee’s policy limits and would then be passed on to the company. Having non-owned and hired auto liability coverage may help you avoid a potentially costly lawsuit or settlement.

•           Key Person Insurance

If an employee crucial to the functioning of your business departs unexpectedly due to death or injury, this could severely hinder the growth of your company. These coverages are designed to provide financial stability so your company can move forward. Look for coverages that would cover a key person in the event of a disability or death.