It’s human nature for a business owner to wonder how much and which types of small business insurance coverage their business actually needs. To be successful, a business has to be comfortable with some amount of risk. Taking the first step to open a business is a risk. With that simple fact, one would have to assume a small business owner is comfortable with some amount of risk. Now how much and what types of risk the business owner is willing to take are completely unique to the industry the business operates in and the personal philosophy of the business owner.
Here are 5 insurance policies every business should secure.
General Liability
General Liability insurance protects an organization from damage to third parties who are not associated with the business. Third parties may include customers, the general public, vendors or anyone that could potentially be damaged by the actions of your business.
Workers Compensation
Workers’ compensation insurance is similar to general liability except it deals only with your employees. Workers comp is the ‘exclusive remedy’ for injuries that occur to employees as a part of normal business operations. This policy provides medical coverage and some lost wages for injured workers who are hurt as a result of normal business operations. Employers benefit from the policy by not having to worry about being sued for injuries that occur as a normal part of business operations.
Business Interruption
Business Interruption Insurance will protect a business in the event it is forced to be closed for an extended period because of another covered loss. The covered loss is an important part of this coverage. If you are the victim of a hurricane or a flood and you do not have coverage for that loss, the business interruption coverage will not kick in. This is typically included as a part of a business owner’s policy (BOP).
Employment Practices Liability Insurance (EPLI)
EPLI coverage is a type of insurance coverage specifically designed to protect your business from lawsuits relating to the employment process. Over the past decade employment lawsuits have increased significantly. If you stay in business long enough, chances are you will face an employment related legal issue. Your business can face one of these lawsuits even if the employees of that business have not done anything wrong. It can also cost an enormous amount of time and money for a business even if the business is found to be innocent. An EPLI Policy can protect a business in just this case.
Commercial Auto or Hired and Non-Owned Auto
Driving risks are one of the most difficult parts of insuring a business. When driving a vehicle is involved in the work of a business, the frequency and severity of claims tend to rise dramatically. Of course if your business owns vehicles and employees drive those vehicles as a part of their work, the business needs a commercial auto policy. A business does not have to own a vehicle to face liability around employees injured while driving any vehicle. If you have employees who use rental cars while they are travelling on business purposes than the business is liable for any accidents they are involved in while they are travelling. This is because the purpose of the employee being where they are is because of the business function. If you have employees who use their personal car for business purposes, the business is liable for any damage caused in an accident that occurs. The employees personal auto insurance policy will cover the damage to their car, but the business will need additional coverage because the liability to other people involved in the accident rests with the business. These instances can be covered by a Hired and Non-Owned Auto Policy, which can be added to most standard business owner’s packages (BOP’s).
