5/23/2016 7:20 AM | 13 Comments



Running a small business can be overwhelming — in the midst of wearing so many hats, things like finding the right business insurance coverage can sometimes be pushed aside. But it’s important to remember that without the necessary coverage, everything you’ve worked for can be lost in the blink of the eye, with one large claim you can’t recover from.


From customer slips and falls to your employee’s laptops to dropping a hammer while working on a house, there are so many things that business insurance protects you from. We’ve made it easy and quick for you by laying out the types of coverage you need as a small business owner to protect yourself, your business, your employees, and your customers.


1. Property Insurance

Commercial Property Insurance is imperative to your small business, whether you own the building where your business is located or not. Here are the two basic parts: 1) If you own the building, you will have to insure the property to its replacement cost; 2) Whether you own the property or not, you will need to insure everything inside the property, which is also known as “Business Personal Property Insurance.” This insurance will ensure coverage of everything inside your office, from computers to phones to conference tables — even your desk!


Theft, vandalism, fire, malicious mischief and wind damage are other perils covered by property insurance. Property insurance is included in standard “BOPs” or Business Owner Policies. 


2. General Liability Insurance

General Liability Insurance provides protection if you, your employees, your product, or your services are considered negligent and cause bodily injury or property damage. It protects your business against claims that occur while customers are on your premises. Say you own a restaurant — General Liability Insurance covers you if a customer were to trip and sprain their ankle in your restaurant. It also includes products coverage in case a patron gets food poisoning from your product.


If you are a contractor working on a home remodel and a neighbor walks by and trips over an extension cord you’ve accidentally left exposed on the sidewalk; General Liability Insurance covers “Bodily Injury to Others,” in this case, due to negligence. Say the contractor accidentally drops their hammer on a neighbor’s car — GLI also covers this “Property Damage to Others.”


3. Loss of Business Income Insurance

Loss of Business Income Insurance will cover your net profit, or the “Actual Loss Sustained” if you go out of business for a period of time. For example, if your business runs from a brick and mortar location and a fire puts you out of commission for three months, this policy will cover your net profit you would have made in those three months. It will give you the peace of mind necessary to make changes in order to recover!


4. Workers’ Compensation Insurance

Workers’ Compensation insurance provides wage replacement and medical benefits to employees injured in the course of employment. Did you know it also relinquishes the employee's right to sue his or her employer for the tort of negligence? By accepting workers’ compensation benefits, the employee gives up this right.


Small business employers can help control Workers’ Compensation costs by instituting a formal safety plan aimed at preventing claims from occurring and minimizing the loss when they do. Having a safety manual in place and giving proper workplace safety instructions to all of your employees is critical to keeping them safe and your costs down!


5. Cyber Liability Insurance

A data breach to your small business can be crippling. If your business stores private information about employees or clients, it is your responsibility to protect that information. Moreover, if a data breach occurs, you are obligated to notify all of your employees and customers, which can be an overwhelming and expensive task. Cyber liability insurance will cover the expenses incurred in doing so.


You should also know if the limits provided in your current Business Owner Policy are adequate in the event of a data breach loss. The average annual cost of cyber attacks to small and medium-sized businesses was nearly $200,000 in 2010. Business owners may not realize that cyber liability coverage included in Business Owner Policies will generally only provide lower limits. This means it’s important to talk to your insurance agent about a more robust, stand-alone cyber insurance policy for your business. In addition, it is important to know if your Umbrella Liability policy will provide coverage over and above the Cyber Liability limit.


You hear a lot in the news about “data breaches” at huge companies like Home Depot or Staples, but small business face just as big a threat of data breach. Restaurants are at high risk of a data breach because customer credit card information is exchanged on a daily basis. If you are a restaurant owner, make sure you are protecting your customer’s information during and after their meal.


Read more about why cyber insurance is important for small businesses in this blog post.


6. Umbrella Policy

An Umbrella Policy extends the coverage of all of your policies — think of it as an actual umbrella protecting you from the rain. An umbrella policy will provide additional liability limits over and above those provided by your other policies in the event of a larger claim. For example, if your General Liability or Commercial Auto Insurance has a limit of $1 million, and you have a claim or lawsuit against you for $1.5 million, the umbrella policy will cover the extra $500,000. You don’t want to find yourself in a situation where your General Liability Insurance isn’t enough coverage and you’re paying hundreds of thousands of dollars to make up for that mistake.


Small business insurance is equally important and complex. You worked hard to create your business. Don’t lose it by having inadequate insurance coverage!


At Eastern Insurance, we will work with you to ensure that your unique small business insurance needs are covered. Allow us to be your trusted advisor — we’ll help you design insurance coverage that will meet the specific needs of your business.


For more information about our small business insurance options, contact us at any time at: 800-333-7234 or by visiting our website.



Note: All coverages discussed above are subject to specific policy terms, conditions, perils, exclusions, etc., and are not intended to be a complete list of all coverages your specific business may require.


Comments

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  1. Derek Mcdoogle's avatar Derek Mcdoogle
    Recently my brother has wanted to start his own restaurant and is trying to decide what insurance to get. You mentioned that general liability insurance provides protection if you, your employees, your product, or your services are considered negligent. What kind of problems can occur if a business does not have this type of insurance? It seems that it could be beneficial for him to consider this. http://www.pcbins.com/business/
    Reply 8/9/2016 7:03 PM
  2. Jade Brunet's avatar Jade Brunet
    I appreciate this information about the types of insurance each small business should have. I did not realize the importance of property insurance. This would help a lot with belongings on the property whether they belong to you or not. Something else to consider would be to check into different types of insurance policies to find one that best fits the specific needs of the individual situation. http://insuranceunlimitedofmissoula.com/business-insurance/
    Reply 9/23/2016 3:44 PM
  3. Rockfrod's avatar Rockfrod
    I learned a lot about property insurance by reading this article. It was interesting to learn that property insurance can help to protect everything that is inside your office. I can imagine how helpful these services can be when it comes to being able to recover all of your things if there is a fire within your home. http://www.northamericanbrkg.com/Trucking-Insurance.html
    Reply 10/24/2016 7:53 AM
  4. scott's avatar scott
    I didn't realize that the umbrella policy existed. After reading what it is, I can see why it would be good to think about investing in this policy. I think it would be good to think about what could happen and then what plan you want to buy to cover it. http://www.westralianinsurance.com.au
    Reply 11/28/2016 5:30 PM
  5. Dennis Sanchez's avatar Dennis Sanchez
    You wrote that it was important to have insurance for your business, especially making sure that your property is properly covered. No one knows when an accident or theft will happen, so it makes sense that you would want to be covered. Not being covered could lose you a lot of money, or trust if confidential information was taken. Thanks for read.
    http://www.insuranceunlimitedofbozeman.com/business-insurance-bozeman-mt-general/
    Reply 12/29/2016 2:40 PM
  6. Trade Credit Risk's avatar Trade Credit Risk
    Well written post by Eastern Insurance. Insurance is very important for any business. Nice way to explain the types of insurance for the small business, it will very helpful. Thanks for sharing.
    Reply 1/12/2017 9:51 PM
  7. Jason's avatar Jason
    I know this is off topic but I'm looking into starting my own blog and was wondering what all is needed to get setup? I'm assuming having a blog like your woould cost pretty penny? I'm not very web savvy so I'm not 1000% sure. Any tips or advice would be greatly appreciated. Kudos

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    Reply 1/17/2017 12:42 PM
  8. ClaraJKing's avatar ClaraJKing
    Useful article! I'd really recommend checking out providers such as http://easy-business-insurance.co.uk/index.htm for good advice and reliable services.
    Reply 1/23/2017 7:02 AM
  9. Jay Jorgenson's avatar Jay Jorgenson
    I can definitely see how a business would want commercial property insurance! If your business were to catch on fire I can only imagine how you would want everything to be paid for. This article talks a lot about vandalism because that is something I have never thought about when it comes to property insurance.
    Reply 1/25/2017 6:43 AM
  10. John's avatar John
    Wow, I didn't know there were so many types of insurance a business needs to keep itself running properly! I thought the loss of business income insurance was especially interesting since the article says it can help cover net profit if you're ever out of commission for a period of time. My friend is looking to start his own business soon, so i'll be sure to pass this article on to him. That way he's informed about how to go about getting insured properly! http://www.nocoinsurance.com/insurance-agency-what-we-insure.htm?sid=29880
    Reply 2/16/2017 12:29 PM
  11. lnweaver's avatar lnweaver
    That's a good point that you need to ensure your items even if the building isn't yours. Disasters are a really dangerous liability. If I were starting a business I'd make sure to account for every potential liability. http://www.familyinsurancecenters.com/commercial-property-insurance/
    Reply 4/12/2017 4:38 PM
  12. lnweaver's avatar lnweaver
    That's a good point that you need to ensure your items even if the building isn't yours. Disasters are a really dangerous liability. If I were starting a business I'd make sure to account for every potential liability. http://www.familyinsurancecenters.com/commercial-property-insurance/
    Reply 4/12/2017 4:38 PM
  13. KerrieReichert's avatar KerrieReichert
    Many insurance companies bundle certain coverages, and this can save you money, as long as you make sure you get the proper type of coverage. Even if you feel you have adequate business insurance coverage that meets all your current needs, it's still advisable to review all your coverage on an annual basis, to make sure that your coverage continues to provide everything that you need. This is particularly important if you or your business have experienced any major changes, such as a significant increase or decrease in business activity. Every business, whether small, medium or large, is exposed to risks. You can rule out these risks by purchasing business insurance which covers for the loss of revenue. You should, however, choose the right insurance which is suitable for your business. To know in details about this, look at this useful source at http://directinsurancenetwork.com/business-insurance.
    Reply 5/20/2017 5:01 AM

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