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Business Insurance—What You Need to Know
You have a strong entrepreneurial spirit and have worked hard to create your business. We can help you implement the proper risk management strategy and insurance coverages to protect your hard work and ensure your business continues to have an opportunity to succeed and grow.
What is business insurance?
The term business insurance covers a wide range of policies available for purchase by businesses. There isn’t a single business insurance policy able to cover your entire range of risks. However, there is an upside. Because your business is unique, you can tailor coverage to best fit your business’s needs.
Who needs business insurance?
This answer can vary from person to person, but a good rule of thumb is “everybody with a business.”
Consider doing a brief self-evaluation by asking yourself the following questions:
- Does your business have property you can’t afford to replace if it’s broken or damaged?
- Is there a possibility you may be faced with a lawsuit for a substantial amount of money?
If your answer to either of these questions is yes, then it is strongly recommended you protect yourself and your business with a business insurance policy.
What does business insurance cover?
Business insurance coverage varies depending on the policy. However, there are six policies we strongly recommend for all business owners.
1. Commercial Liability
As a business owner, you are potentially liable for every product, service, and operation relating to your business. While sound procedures may be stressed throughout your organization, the fact remains that no person or machine is perfect. Despite your best efforts, harm caused to a third party relating to your business could lead to litigation. Commercial liability insurance is designed to protect business owners and assets from a variety of exposures.
2. Product Liability
Even though commercial liability and product liability sound similar, it is very important to know they are not the same. If your product may potentially damage a person or property, even if the product is properly used, then product liability insurance is essential.
3. Property Insurance
Imagine a fire breaks out and you lose your entire inventory. Or your business is burglarized causing physical damage and possibly lost assets. Your ability to recover from these incidents is dependent on your commercial property insurance.
4. Business Auto Insurance
Imagine you were involved in an accident in your personal vehicle while engaged in company business. Did you know your personal insurance may not cover you? What if you have employees on the road making service calls to customers? Commercial auto insurance provides valuable protection for your company-owned vehicles, leased or rented vehicles, and your employees' vehicles used for business purposes.
5. Workers Compensation
If you employ any number of workers who are not considered owners of the business, then you are legally required to maintain a workers compensation policy. You do your best to maintain a safe work environment, but if any of your employees are injured or become ill on the job, you are legally responsible. A workers compensation policy can cover the payment of your employee’s medical expenses, lost wages, and rehabilitation costs.
Without an excess or umbrella policy, a catastrophic claim could deplete your future income and business assets. Every business is vulnerable to devastating losses and lawsuits that could exceed your primary insurance coverage. This is a critical coverage—especially for small to mid-sized businesses.
Other beneficial policies may include the following:
Flood & Earthquake
Your basic insurance policy does not protect you against damage from earthquakes and floods. Whether you are in a high-risk area or moderate-to-low risk area, you should consider adding earthquake and flood insurance to your business insurance policy. More than half of all flood claims occur in areas considered to have low flood exposure, and each year there are around 5,000 earthquakes in the United States.
Do you have business equipment, materials, or supplies in transit? Do you store business property in an off-site location? Protect your most valuable business property or equipment wherever it may be with inland marine coverage.
If you or your employees are specialists providing services that may cause a client financial damage through any errors or omissions, then you will benefit from professional liability coverage. You work hard to perform your duties and responsibilities to the best of your ability, but if your customer isn’t satisfied you may be faced with a lawsuit. Protect your employees, your business, and yourself with a professional liability policy.
In today’s digital world, cybercrime runs rampant. Data breaches are an all-too-common occurrence and are commonly targeted towards small businesses. If you store sensitive customer information, such as account numbers, driver’s license numbers, and credit card numbers, and you are the victim of a data breach, you are liable for any damages caused by the breached information.
How do I find the right business insurance for me?
One of our experienced business insurance brokers can help you through the complex process of finding the insurance policy that best fits your needs. We can help you identify your potential risks and liabilities and then work with you to tailor a policy that will protect your business.
We would love to chat with you. Contact us today!
Frequently Asked Questions
What does a BOP cover?
A BOP might be an excellent insurance solutions for your small business because it allows you to get several critical policies within one place. Most offer:
- Property & Contents Insurance
- General Liability Insurance
- Business Interruption Insurance
- Cyber liability insurance
- EPLI coverage
- professional liability (E&O) coverage
- D&O coverage
Let your agent help you decide the right way to obtain this additional coverage.
What's the cost of a BOP?
The cost of your BOP is based on the specific characteristics of your business and chosen coverage, though the nationwide average cost is about $1,000/year. Your friendly, highly-trained agent is happy to help you develop a policy that offers a favorable premium with discount incentives attached.
What do BOPs not cover?
Always remember that BOPs don't include all the coverage you might need. You usually need separate policies, including: Workers' compensation insurance: Coverage repays your employees in case they get sick or injured on the job. Most Michigan businesses must have this coverage. Commercial auto insurance: With this coverage, you can insure company-owned vehicles or personal vehicles that employees use to drive on business. Inland marine insurance: Coverage insures certain company materials and cargo when you transport them off your business's premises.
Who needs a BOP?
Because BOPs are geared towards small businesses, factors like your size, income and industry might disqualify you from eligibility. You do have other options available, however. Commercial Package Policies, also called CPPs, are essentially a larger version of a BOP that you can better adjust to meet your operational needs.
What's the advantage of a business owners policy?
The good thing about BOPs is that they provide many types of security without causing you to face a lot of hassle getting covered or making a claim. The different parts of your policy can work together cohesively to ensure you get comprehensive protection, but you can also adjust different limits to enhance coverage for your own operational needs. Therefore, it's usually a lot easier to manage claims.
What's a business owners insurance policy?
When starting a business, you probably already have clear goals in mind. Your company needs to grow and succeed, but you have to take care of your physical assets, clients and employees to help it do so. That's why every business needs various types of commercial insurance. The appropriate policies can be key sources of support to companies of all shapes and sizes should difficult problems arise. Qualifying small businesses can get multiple policies in one package if they choose to invest in a BOP. By going this route, you'll be able to get covered without hassle, and can easily turn to your policy if various accidents occur in your line of work.