Business owners know they need business insurance; however, many may not understand the complexity of their coverage options and only purchase general liability insurance. While general liability can protect a business from most claims relating to products or services that caused injuries or property damage, it leaves several significant gaps. Insufficient insurance exposes companies to risks of financial loss that may bankrupt them.
Every business has unique insurance needs, but business owners should consider the following types of policies to avoid accidental coverage gaps:
- Employment Practices and Liability Insurance (EPLI). Any business that hires employees needs to consider an EPLI policy. EPLI coverage protects businesses if an employee sues for violating their legal rights. Some examples include wrongful termination, discrimination, and sexual harassment.
- Errors and Omissions (E&O) insurance. General liability protects businesses from lawsuits related to injuries or damages caused by their products or services, but it does not cover lawsuits that allege professional negligence. E&O insurance would respond to a lawsuit claiming financial harm because a company made a mistake, failed to provide sufficient service, or provided incorrect information.
- Business interruption insurance. If a company has to close due to a covered loss, the company may have to continue to pay its rent or mortgage as well as its employees, all while not bringing in revenue. Business interruption insurance helps cover the expenses incurred after a covered loss and before the company returns to normal operations.
- Cybersecurity insurance. Phishing scams have come a long way, and cybercriminals continue to find new ways to fool employees into clicking a link or downloading a file. Every employee represents a potential entry point for bad actors, and the fallout from a successful hack can be tremendous. Cybersecurity insurance can help companies recover from data breaches as well as the reputational harm that may follow.
- Commercial auto policies. Most companies know they need auto insurance if they have company vehicles, but they may not have considered employees that drive their own vehicles for work. If employees use their vehicle to conduct business regularly, the company should consider a commercial auto policy, because an employee’s personal auto policy may not cover a loss. In addition, personal auto policies typically do not cover vehicles specifically used to conduct business.
Coverage needs will vary from business to business, but many companies are underinsured without knowing it. Contact a professional advisor at Windermere Insurance Group to learn more about coverage options that suit your company’s needs.