Running a small business can be both rewarding and incredibly stressful. Small business insurance should not be one of those stresses. Here are 5 coverage gaps small business owners should avoid to make sure your business is properly insured:
- Loss of business income coverage. Most business owner policies, or BOP’s, include loss of income coverage. But, if your type of business does not qualify for a BOP, you should discuss loss of business income coverage with your agent. If a covered loss forced to cease business operations, this coverage will reimburse you for lost net income plus reoccurring expenses such as payroll, rent, utilities, etc.
- Employment practices liability coverage. Claims made by employees against their employers have been on the rise for many years. These claims can be related to wage and hour disputes, discrimination in hiring or firing, harassment in the workplace, breach of contract, and many other allegations. Even claims that are without merit can cost a small business thousands of dollars to fight. Employment practices liability protects your business from these claims. It provides coverage for the defense (attorney fees) and settlement of employee allegations.
- Cyber Liability Insurance. Nearly every business collects information about customers. That data, in whatever form, is your responsibility to protect from theft or accidental disclosure. If a data breach occurs, cyber liability can cover the expense of notifying your customers, purchasing credit monitoring, and defend you from lawsuits that may result.
- Commercial umbrella. Do not make the mistake of assuming $1,000,000 of general liability is all the coverage you need. Large claims happen, and with growing frequency. A commercial umbrella, or excess liability policy, provides additional layers of protection – from $1M to $50M or higher. Umbrella coverage is surprisingly affordable, often much lower than you would imagine.
- Hired & Non-owned auto liability. If you have employees that drive personal vehicles on company business, or rent vehicles while working, you should have hired and non-owned auto liability coverage. This can be added to a commercial auto policy, or is sometimes available on a BOP or general liability policy.
Obviously this not an exhaustive list of all the insurance coverage a small-business owner should consider. It is, however, coverage that is often omitted by policy holders in the interest of saving money. We recommend you consult you with a knowledgeable insurance agent about your business insurance policies before a loss occurs. Contact one of our small-business insurance agents today for a no-obligation policy review.