A business insurance policy is a must if you have your own business. It can help protect you from property damage, financial losses, and much more, which is important if you want to keep your doors open.
Just don’t make the mistake of thinking that once you have a basic business insurance policy, you’re good to go. There are some ways you probably aren’t being protected. By knowing what might be missing, you can decide what you need, which gives you a better chance at customizing a policy that works for you.
Seven things you should seriously consider adding to your business insurance policy include:
- Flood insurance
- Workers’ compensation
- Professional liability
- Replacement cost
- Business interruption insurance
- Cyber insurance
- Auto insurance
Flood Insurance
Many policies, homeowner’s and business insurance included, cover a wide range of natural disasters. One that many policy holders assume is included but it actually isn’t is flood insurance.
That’s because not every dwelling is susceptible to flood damage. Recovering after a flood can be extremely costly, so only those with a separate policy are covered.
It’s important to know if your business is located in a flood-prone area. For example, business insurance in Florida that includes a flood insurance policy is a must for those who are regularly exposed to hurricanes. Those who are located in low-lying areas near rivers should make sure that flooding is covered in their policy as well.
Workers’ Compensation
Workers’ compensation insurance is a must. It helps cover expenses that an employee incurs after becoming injured or ill on the job. It protects your business from some legal disputes, and it has the ability to get your employees back to good health sooner.
Having a robust worker’s compensation package can actually help you hire and retain top talent too. It shows your workforce that you care about taking care of their health in the event of an illness or an accident.
It’s actually required by law in most locations for you to hold some form of this type of insurance, but the laws can vary by state. It’s important to know what the laws are where your business is located so you know if you need a policy, and if so, what it should include.
Professional Liability
Depending on what type of business you operate, you may also want to consider adding professional liability insurance to your policy.
This type of insurance protects you in the event you inadvertently give bad advice, incorrectly perform work, or complete paperwork incorrectly.
This type of insurance is different depending on the particulars of your business. For example, a healthcare provider would need malpractice insurance, while a real estate agent would need a policy that protects against errors and omissions during a sale.
Hopefully you never need to use this type of insurance. However, it does offer peace of mind knowing that one mistake isn’t likely to tank your entire business.
Replacement Cost
Your regular policy pays out the value of damaged items, which can be hugely helpful should expensive machinery or equipment get damaged, but it may not be as helpful as you think. If you have old equipment that has a relatively low value, but you’ll have to buy a newer piece of equipment in order to replace it, your insurance company isn’t going to pay the difference.
That’s where a replacement cost policy comes in. This type of policy enables you to receive a payout for the actual price of the assets you need to replace, whether it’s the property itself or items on the property, like a piece of machinery, electronics, or furniture.
Business Interruption Insurance
Your business has to operate to make money. If something happens and you aren’t able to operate at full capacity, you could be in real danger of closing down your operation altogether.
Business interruption insurance is one way you can get help to carry on. If a large chunk of your inventory is damaged, for example, your policy can help cover the cost of the orders you would have filled had the inventory not become unsellable. It can help cover lost income if you have to shut down your store for a repair, and it can help you maintain an income if a road closure temporarily shuts down your business.
Auto Insurance
All drivers have to carry personal auto insurance. If your company uses vehicles, it has to have auto insurance too.
Commercial auto insurance enables you to cover the vehicles you use for business purposes. A policy can cover vehicles that aren’t owned by your company, and it can help protect your employees who are driving those vehicles. It includes many of the things you would expect, like liability coverage, medical payments, and uninsured motorist coverage, but it can also cover:
- Towing and labor
- Rental reimbursement
- Lease gap coverage
Keep in mind that it does not cover items in the vehicle. If you regularly transport tools, inventory, or equipment, you’ll want to make sure that’s included in your larger business owner’s policy.
Cyber Insurance
Cybersecurity is more important than ever in today’s technologically advanced world. A single hacker can bring your business to its knees if you don’t have the right coverage.
Add cyber insurance to your policy to get coverage for things like:
- Data breaches that include the theft of personal information
- Data breaches that include your network
- Cyber-attacks on data that is stored by third parties
Cyber insurance can also cover crisis management, customer notification, and lost income if your business is interrupted, but it does depend on the specifics of your particular policy. It’s important to think about what you need so you can customize a policy that works for you.
An insurance policy is never just an insurance policy. There are many different types of policies that can be customized and combined according to your needs. Make sure you take the time to build a policy that works for your business so you’re covered no matter what happens.