Starting your own business is no small feat. It takes a large investment, not just with money but with time, energy, and resources. It’s important to make sure that you protect that hard work, and ensure your business is properly insured.
There are many different types of businesses, and each business has unique insurance needs, so it’s essential to work with industry professionals. Not having the correct coverage or having no coverage at all is a gamble that could cost you your business in its entirety.
There are many different situations that can damage your property, or expose you to liability which could affect your business.That is not something anyone would want to happen, so we’re breaking down essential factors to consider when figuring out which type of insurance your business needs.
Types of Business Insurance You Should Consider
Different businesses have different insurance needs, that will be determined by the industry and product or service they offer. This includes:
COMMERCIAL GENERAL LIABILITY
CGL protects your business against liability claims arising when customers visit your business. These instances could range from someone tripping and injuring themselves, a ladder falling onto a customer’s car causing damage, or even a customer and an employee accidentally colliding, causing injury. Think of this type of insurance as protection from anything associated with your business causing harm to someone else accidentally. Visit our Commercial General Liability page to learn more about this product.
Ie. A customer visited your restaurant and tripped on the stairs, causing them to break their wrist. Your commercial General Liability would cover your legal fees, and any money the customer would be owed.
PROPERTY INSURANCE
Property insurance is a key component of a business insurance policy for any business, whether you work from home, lease your space, or own it. This insurance product can be tailored to protect your physical assets against loss and damage as a result of fire, theft, or earthquakes. To learn more about property insurance, visit our Property Insurance page.
Ie. – A fire started at the neighboring business unit and caused damage to your storefront, and your inventory. Your insurance would cover the costs of damage to the unit and the cost of lost inventory and office supplies. If this location was your storefront, you would also be reimbursed for lost revenue during the time of you business closure with the combination of Business Interruption Insurance (see below).
BUSINESS INTERRUPTION INSURANCE
Business interruption insurance comes into play if your business is unexpectedly required to close due to an event that would be covered under your insurance policy, such as a fire or natural disaster. This insurance is inteded to replace lost income, and can reimburse salaries, rent, taxes, and other expenses, as well as projected profits that you would have earned when your business remains inoperable. Our Business Interruption page provides greater detail scenarios when you might need this coverage.
Ie. A pipe burst in your storefront causing water damage, ruining your floor, drywall, and inventory. As a result, your storefront was forced to close while repairs were being completed. Your business interruption service would replace lost income as a result of having to close.
CONTRACTOR PACKAGE
Contractor package is designed specifically for contractors, combining property coverage for tools and equipment with liability protection. This coverage is excellent for all contractors, including plumbers, drywallers, electricians, and more.
Ie. While you and your team were on a lunch break, someone snuck into your jobsite and stole a handful of expensive tools. Your Contractor Package would cover the replacement of the tools that were stolen.
PROFESSIONAL LIABILITY INSURANCE (E&O)
Also known as Errors and Omissions Insurance. Protects any service-based professionals whose clients could claim damages from using their service. Professionals in this category could be Lawyers, Doctors, Engineers, etc. This insurance product would cover your business assets and legal fees if a customer claims damage.
Situations where a customer could claim damages include but are not limited to missed deadlines, breach of non-disclosure, or loss of data. It is always wise to have this coverage if it aligns with your business type to protect yourself in any circumstances. To learn more vistit our E&O Insurance page.
Ie. You took a consulting contract where you implemented a new software at the company. Once the software was launched, the client discovered there was a security flaw and customers data was stolen. were hired as a consultant to implement a new software. However, the client discovers a security flaw that leaves customers’ data at risk. Your E&O insurance would cover you from any legal costs associated with the error.
CYBER INSURANCE
Cyber coverage has become increasingly important as businesses turn to hosting their data online, which increases the risk of being targeted by
viruses and online hackers. Cyber Liability Insurance will cover your data in case of lost or stolen data, website high jacking, disruption of e-commerce vices, and much more.
For a more comprehensive list of what Cyber Liability Insurance covers, please review our Cyber Insurance page. It’s important to note that breaches can be accidental, so ensure your employees are trained to be cyber-aware.
Ie. An employee accidentally clicks on a link from suspicious email, which then gives a hacker access to important company information. The hacker threatens to expose this information unless paid a lump sum of money. Your Cyber Insurance policy would help reimburse the cost or retrieving your data from the hacker.
Understanding what each type of insurance covers is crucial for business owners to make informed decisions about their protection. Our team of brokers is happy to help you decide which insurance products are right for you and your business.
Regularly Review Your Business Insurance Coverage
In today’s age, businesses are constantly evolving, which means your insurance policies may need to develop as well. There are a few key events that could trigger a conversation with your insurance broker. Some of these are:
- Releasing a new product or service
- Changing the location of where your business operates
- Changes in revenues (IE., sales to other countries)
- Acquisition or sale of a business property
- Adjustments to deductibles or coverages.
Adapting your insurance to evolving business circumstances is a smart way to stay protected. Contact your insurance broker if your business is undergoing any changes to cover your operation.
Ways to Reduce Business Insurance Costs
Like all things, there are ways to reduce your business insurance costs. The most evident one is to work with a trusted broker. At Park Insurance, our brokers work to get you the best price for the best coverage based on your needs, ensuring your business is protected with the proper insurance but at the lowest cost.
Another way to reduce business insurance costs is to invest in property protection systems. Things like alarms, sprinklers, physical deadbolts, etc., can bring your insurance cost down because you are implementing ways to proactively reduce the risk of utilising your insurance policies. Practising good loss prevention can also reduce the cost of insurance plans, ensuring that all of your equipment is secured and well-maintained.
Finally, protecting your business assets by maintaining good records of inventory and purchase prices can help save you money in the long run. Keeping a record of purchase prices for any business-related expenses is crucial so you can have peace of mind your insurance covers the proper value of your equipment so that you are never under-insured.
Seek the Advice of an Insurance Broker
Insurance brokers play a crucial role in helping entrepreneurs navigate the complex world of insurance, and they will look out for you and your business’s best interests. By having access to several different insurance companies, they can tailor your insurance policy to fit your needs for the best price.
If you are looking to speak with someone to get a new insurance policy, ensure your current policy has adequate coverage, or learn more, get in touch with one of our brokers today.
Protecting your business with the right insurance is an investment in your future. Don’t wait until it’s too late – take the necessary steps to safeguard your business and assets from unexpected challenges.
