Your business size and industry can influence how much insurance coverage costs; larger firms tend to pay more than smaller ones for general liability coverage.
Some policies, like workers’ compensation insurance, are required by law while others can be beneficial investments such as business interruption coverage.
1. General Liability
Most companies require general liability coverage if their employees or customers visit their location, as it helps cover any potential lawsuits that arise from injuries sustained on-site or property damage that occurs; also includes coverage against claims of slander, libel or invasion of privacy as well as copyright infringement.
General liability policies generally include limits of $1 million per incident and $2 million aggregate, usually for one year of coverage. Companies may opt for higher limits, though this usually increases premium costs.
Insurance agents can help your company identify its risk level and find an insurance policy tailored to its budget. Many factors affect the cost of business insurance policies such as industry, location, size and number of claims made against it.
Liability claims can quickly pile up, so adding commercial umbrella insurance to your policy could double both per-occurrence and aggregate limits. You could also combine liability and property coverage into a business owner’s policy (BOP) for further savings on both policies.
2. Business Owner’s Policy (BOP)
Business owner’s policies (BOPs) combine general liability and commercial property coverage at an economical cost, covering losses to your buildings and contents, interruption expenses incurred from disruption to your operations and potential legal liability for damages caused by you to others.
Cost of Business Owner’s Policies (BOPs) will depend upon several factors, including industry, type and value of personal property owned by your company and claims history; it can also vary based on geographic location of business as well as how long it has been operational.
Add endorsements to your BOP policy in order to better safeguard your business, such as cyber liability insurance that provides for customer notification, credit monitoring, legal fees and legal representation when there’s a data breach. NEXT’s licensed U.S. insurance professionals are available to advise you as needed on which optional coverages are necessary to keep your enterprise protected.
3. Business Interruption
Business interruption insurance (BI) covers fixed expenses like payroll, mortgage or rent payments and utilities following an unexpected event, such as fire. BI can also reimburse any profits earned prior to the incident according to your financial records. BI is often included as part of a BOP but can also be purchased independently.
This type of coverage is often tightly connected with commercial property coverage; for a claim to be honored, the event that disrupted your business must fall within both policies’ perils, such as floods or earthquakes – typically excluded but potentially addable to a BI policy at an additional premium cost.
Add contingent business interruption insurance to your policy as an extra measure to protect yourself in case a natural disaster causes one of your suppliers to cease operations, for instance if their factory burns down and cannot resume production again. A contingent business interruption policy can cover these losses until production resumes again.
4. Employee Dishonesty
No matter how honest your employees may be, all it takes is one dishonest employee to cause financial harm and damage your company’s reputation. That is why employee dishonesty coverage, part of a comprehensive commercial crime policy is so crucial.
Also referred to as fidelity bonds, this form of insurance provides protection from losses due to dishonest acts by employees. Some industries such as finance or healthcare require this coverage, as fidelity bonds provide fiduciary safeguards.
Employee dishonesty policies typically cover risks such as forgeries, computer fraud, theft of business property and embezzlement. You may also include provisions to cover legal fees in case a claim arises against your employees; however it should be noted that acts committed by partners, directors and trustees themselves are not covered because they are considered company principals rather than employees.
These policies offer comprehensive protection at an economical cost, usually far more so than other crime-related insurance options, like fidelity bonds. But to make an informed decision, it’s crucial to fully comprehend all aspects of these policies before making your final choice.
5. Employment Practices Liability
As our society becomes ever more litigious, businesses of all sizes face the danger of costly employee lawsuits. Even when following internal policies and procedures to the letter, disputes may still arise that require significant company time and resources to defend. Insurance provides financial safeguards that help mitigate such risks.
Employment practices liability insurance (EPLI) protects employers against claims related to employment practices such as discrimination, sexual harassment, invasion of privacy and breaches of contract that occur as part of the hiring process. EPLI may be purchased either separately or as part of a management liability package policy.
EPLI differs from general liability, workers’ compensation and errors and omissions (E&O) insurance in several ways. Both general and professional liability coverage provide business owners with protection against third-party claims of bodily injury or property damage to third-parties; workers’ comp provides coverage for work-related injuries and illnesses while errors and omissions (E&O) protect directors and officers against claims related to decisions or actions they took which led to financial loss; E&O covers directors and officers against allegations regarding decisions or actions taken within their roles which led to financial loss; unlike general and EPLI policies which do not cover employees for injury or illness claims compared with general and EPLI insurance policies which do.
