The purchase of business insurance can seem like another expense you need to justify, yet it could help mitigate risks that can limit a company’s growth. A Business Owner Policy (BOP) typically combines property and general liability coverages into one convenient package, helping businesses meet contractual requirements while inspiring trust among clients and partners.
1. Property Insurance
Business property insurance protects the assets and infrastructure of companies from unexpected circumstances like fire, theft, or natural disasters. Furthermore, it covers leased property such as machinery, computers, and raw materials leased on contract agreements. Many business owners combine property and general liability policies into one comprehensive policy known as a Business Owner’s Policy (BOP). BOPs help reduce costs because they cover multiple risks all at once; plus, they demonstrate to potential clients that your organization takes risk management seriously—something particularly crucial for small businesses.
2. Liability Insurance
Preserving your business from unexpected issues is one of the main drivers behind purchasing business insurance policies. Your policy’s type will depend on what industry your company operates within and any unique regulations it must abide by. General liability coverage will protect a business against expenses associated with bodily injuries or property damage on its premises, while commercial property coverage provides replacement costs should damage occur to inventory or equipment on-site. A popular option is a Business Owners Policy (BOP), which bundles both policies into one policy at an affordable cost compared to purchasing each coverage separately.
3. Business Interruption Insurance
Coverage typically available either as a standalone policy or an endorsement to your business owner’s policy can provide vital relief after disaster strikes and forces you to temporarily close down, helping pay bills and cover payroll while covering additional costs such as leasing temporary equipment or paying employees overtime. Contingent Business Interruption Insurance provides additional protections, such as covering losses caused by supply chain disruptions. It typically can be added as an endorsement to standard policies of this nature.
4. Business Auto Insurance
Any person using their vehicle for business should secure themselves with a commercial auto policy, providing liability and physical damage coverage as well as hired/non-owned coverage if employees take company cars home or to locations outside work. An effective business car insurance policy or commercial liability policy provides your business with important protection should an accident occur during company business errands, protecting it from large financial losses.
5. Employee Dishonesty Insurance
Employee dishonesty insurance, more commonly referred to as fidelity bonds, protects your business against criminal actions by employees such as theft, forgery, and embezzlement. This form of coverage can either be purchased as an independent policy or included as part of your BOP or commercial blanket bond policy. Firms dealing in significant cash transactions or handling sensitive customer information will find this type of coverage especially essential. Some policies even cover theft of property belonging to clients or customers—an event that could have both financial and reputational repercussions.
6. Business Crime Insurance
Business crime insurance, or commercial crime policy, provides protection from theft and fraud committed by third parties, such as funds transfer fraud (in which employees provide false instructions to banks causing company funds to be wired into personal accounts), forgery, counterfeiting, and robbery. This type of coverage provides coverage against losses such as these. Even organizations run efficiently can experience costly crime losses. According to the 2020 Association of Certified Fraud Examiners report, small businesses tend to experience greater crime losses. Many organizations are legally or contractually required to secure such coverage.
7. Cyber Insurance
Cyber insurance policies help businesses protect themselves against an ever-increasing risk, covering losses from data breaches, wire fraud, extortion, and more. These policies also typically cover legal defense costs, lost profits coverage, and various expenses that arise as a result. Cyber insurance and the business owner’s policy (BOP) can both help address these risks. Some insurers even provide combined versions for more complete protection at an economical price point; typically these policies include deductibles.
8. Employment Practices Liability Insurance
Due to an increase in employee litigation and complex laws and regulations, employment practices liability insurance (EPLI) has become an increasingly popular product on the business insurance market. Similar to general comprehensive liability policies, but specifically covering claims associated with employment practices lawsuits. EPLI policies offer organizations protection from costly legal challenges by covering issues like discrimination, wrongful termination, sexual harassment, wage and hour claims, and more. When selecting an EPLI policy that best fits their risk profile and operational realities, an experienced agent is invaluable in finding an appropriate policy solution.
9. Cyber Liability Insurance
Businesses today tend to store data online, increasing their risk of cyber attacks such as data breaches in which sensitive customer data is exposed or ransomware attacks that encrypt and hold their data hostage until payment can be made in order to unlock it. An effective cyber liability policy can cover direct costs associated with responding to cyber events, such as hiring experts to mitigate damage and notification expenses. While typically included as part of a Business Owner’s Policy (BOP), cyber insurance policies can also be purchased separately.
10. Business Crime Insurance
Business crime insurance provides businesses of all sizes with financial protection from criminal activities within or directed against their organization, protecting against financial losses due to unlawful acts occurring within or aimed at it. It’s an invaluable component of their overall risk management strategies. Even the best-run companies can fall prey to dishonest employees or outside fraudsters who commit acts that lead to significant losses for a business and could ultimately put it out of business.
Commercial crime insurance provides financial security during and after an act of crime is committed against your company, such as expenses for forensic accounting and legal costs. Furthermore, this coverage ensures operations continue uninterrupted during any criminal incident that might arise.
