Business insurance protects businesses from losses that may occur during normal operations. Accidents, lawsuits, and even bodily injuries can cause a business to fail if it does not have the proper coverage. While there is no single policy that protects against all risks, business insurance includes numerous policies that provide a wide range of protections. Some of these policies include general liability, employment practices liability, directors & officers, commercial umbrella and errors & omissions insurance.
Different types of business insurance also cover various risks, such as those associated with clients or customers, property, employees, or motor vehicles. It is important for businesses to understand the risks that they face and what policies will provide the best coverage.
Areas Of Protection Provided By Business Insurance
Business insurance can help cover the costs of lost business income, property damage, lawsuits, and other covered losses. One of the most popular business policies is a Business Owner’s Policy (BOP). What makes a BOP so attractive is that it covers many areas, including general liability, property, and business income within one policy.
While business insurance contains policies that cover many different areas of operations, there are certain losses that are not covered. Floods, natural disasters, and other major weather events may not be covered by a standard business insurance policy. In some cases, the property belonging to customers, which is being stored within a business, may also not be covered. It is important to carefully compare insurance options to find the right policies for the business.
Accidents can happen at any time and without warning. Without business insurance, business owners risk financial strain and possibly even business closure. To stay protected against major losses, every company should consider coverage for the following risks:
The cost of property damage in a commercial building can be substantial. According to Koorsen Fire & Security, a single warehouse fire causes approximately $128,099 in property damage. Without business insurance, a company could be on the hook for this expense. In addition to the cost to repair the building following damage, a business may also need to repair or replace the contents inside, such as costly equipment, furniture, and inventory.
Property damage can also occur due to a burglary or vandalism. When an intruder enters the building and causes property damage, a business owner may find that their current policy does not cover the cost for repair or replacement of materials. Business insurance makes it easy to obtain reimbursement for property damage by providing a straight forward claims process that allows business owners to recover some of their losses.
Clients and customers are the foundation of every business; however, interacting with and providing products or services to consumers, places businesses at risk for a lawsuit. According to Court Statistics, the median cost for a business lawsuit begins at $54,000 for a liability suit and can quickly surpass $91,000 for a median contract dispute. If a business loses the case, it may be responsible for damages.
There are many instances in which a business may be found liable for a customer or client accident, such as when a customer slips and falls on business property. A client could also lose money after taking professional advice from the business and may sue the business for damages. In some cases, liability can occur without direct contact with a customer, such as when a customer’s financial information is exposed. Business insurance provides businesses with legal liability protection which is essential in all industries that serve consumers.
Employees also pose certain risks to businesses. An employee injured on the job could sue the business, even if the business carries workers’ compensation insurance which is mandated in most states. An employee could also decide to sue due to workplace discrimination. Employment practices liability insurance can protect against disputes that may arise from the employee-employer relationship. If the business has a board of directors, having directors and officers insurance is a must to protect against disputes over decisions that a board member may make on behalf of the company.
There is no denying that employees are a business’s greatest asset. This is why many employers choose to provide workers with a competitive benefits package that includes benefits like health insurance and group life. However, even with these benefits, injuries can occur that may force an employee out of work for an extended period of time or sometimes even permanently. Having coverage for such events helps protect businesses against the potential financial fallout resulting from a costly lawsuit.
Contact An Experienced Business Insurance Agency
For more information about what business insurance is or what it covers, or to acquire a business insurance policy, contact the insurance professionals at Pro Insurance Group by calling 833.619.0770 or by requesting a quote online.