Insurance and Your Business
Insurance is a necessary evil in our businesses. It is increasingly important to have both the right kind of coverage and the right amount of coverage.
The types and amounts of coverage will vary from business to business, obviously. Finding a trustworthy insurance agent who will evaluate your business and recommend the appropriate coverages and the appropriate limits is a critical factor. Remember, agents make commissions on their sales – and, while they certainly have the right to make a profitable living, we want to find agents who want to be in the game for the long relationship us as clients.
In general, according to The Hartford, small businesses require the following ten types of insurance. They explain the types of insurance in their article (click The Hartford to be redirected to their website).
- General Liability Insurance – covers bodily injury/property damage
- Professional Liability Insurance – aka errors and omissions coverage
- Business Income Coverage – aka business interruption insurance
- Commercial Property Insurance – ccovers cost of damage to business property
- Workers’ Compensation Insurance – covers employees injured at work
- Commercial Auto Insurance – covers the costs of vehicle-related incidents
- Date Breach Insurance – covers things like hacking into the business’ network
- Commercial Umbrella Insurance – extra coverage if a claim exceeds your policy’s limits
- Employment Practices Liability Insurance – protects against employee’s claims
- Business Owner’s Policy (BOP) – listed as one of the ten types of coverage, this final suggestion on the list is a combination of General Liability, Property Insurance, and Business Income Coverage, so this is more of a “product package” The Hartford sells than a type of insurance.
Determining the amounts of coverage is often based on experience in both your specific business and industry averages.
When working for my family’s school bus business, we had a tragic school bus crash that resulted in the loss of three nine-year old students and several students that required long-term care. At that time we did not have enough coverage for that type of claim. In fact, not many school bus operators in Minnesota would have had adequate coverage. In our case, the fault for the collision was with the truck driver who failed to stop for a stop sign, causing the crash, and his employer had adequate coverage. Those were scary days!
It’s likely the case that most businesses would rather spend money on things other than insurance – until the claim arrives along with the realization that insurance would have been very helpful.
Do your research, and insure your business!