The 7 Essential Business Insurance Policies:

Liability insurance protects your business
from third-party lawsuits

There are so many commercial insurance coverage options out there, it can feel confusing or overwhelming trying to sift through them to determine which are necessary for protecting your business. To help you, we’ve made a list of the seven insurance policies that every business owner should have, regardless of business type or size (and we’ve even outlines some additional coverage options that are smart add-ons, or even essentials, depending on the type of business you own).

Protecting your investment is one of the most important strategies for your success. Managing your risk is the best way to ensure that the inevitable mistakes that occur along the normal lines of doing business (schedule or shipment delays, accidents and injuries, damage to inventory) don’t compromise your business or your profits. The right insurance policies help safeguard your profits and your possessions.

If you’re just starting out, these business insurance basics are essential to your future success. If you own an existing business, you should already have these coverages to protect the profitability of the business you’re working so hard for.

Seven business insurance policies that you shouldn’t do without:

1. General Liability Insurance – This covers damage to persons or property caused by a business's product or premises (sometimes referred to as “slip and fall” insurance). Maybe the most important coverage you can get in our litigation-looped society, this can protect you against a wide range of lawsuits, from the postal worker who slips and falls in your parking lot to the consumer injured by your product. You need this type of coverage before you ever sell a single product or service. There are several different types of liability options that can be included in your policy depending on your business type, including general liability, product liability, liquor liability, advertising liability, on and off premises liability, and many others. Product liability, for instance, protects you if your business makes a product that could conceivably harm someone else. (Food and beverage related businesses that produce a consumable product need this type of coverage.
2. Commercial Property Insurance – Property insurance covers damage to your building and the items within it, including inventory, loss of income, and furniture/electronics. It

   

   Commercial Property Insurance protects
   your premises and the items inside it 

   also covers any improvements or customizations that you make as a tenant, if you rent your space.
3. Commercial Auto Insurance – This will cover collision and liability for the vehicles that are owned by you, your employees, and rented vehicles.
4. Workers Compensation – Bodily injury to yourself or your employees.  Whether you have one employee or a hundred, you need Workers Comp included in your policy. Workers Comp is a state required benefit that will help take care of medical become ill while working at your brewery. 
5. Excess Liability/Umbrella Insurance – An umbrella policy provides excess coverage over your already existing policies. It is a much more affordable way to increase your limits and extend your liability than increasing limits of every liability policy in your insurance plan.
6. Employment Practices Liability Insurance – Coverage for defense costs and damages related to various employment-related claims, including allegations of Wrongful Termination, Discrimination, Workplace Harassment and Retaliation deriving from the employer-employee relationship.
7. Crime – Protection against loss from crime covers employee theft, forgery and alteration, theft of money and securities, computer fraud, funds transfer fraud, and loss from accepting in good faith money orders and counterfeit money.   

Additional coverages to consider, based on your business needs:

• Data Compromise and Identity Theft Expense Coverage – Provides for certain expenses after a covered loss to help you respond and protect your good name. It also includes access to services to help you prepare for such events.

• Equipment Breakdown Coverage – Extends your property policy to cover loss to real and business personal property from the sudden and accidental breakdown of machinery and equipment used in your business.

• Supply Chain Insurance – A problem with your supply chain can cause major losses, from a problem with a key supplier to a temporary halt in production, unless your supply chain insurance policy kicks in and balances out your profits.

• Errors and Omissions Insurance – Also known as professional liability insurance or professional indemnity insurance, this is a form of liability insurance particularly important to service or advice-oriented businesses that protects you should you make a mistake or neglect to do something correctly or on time that causes your client money or harms their reputation. (A prime example would be a doctor's or dentist’s medical malpractice insurance, but this coverage is equally as necessary for a wedding photographer whose film gets damaged, or a printer whose machine breaks down in the middle of a big deadline.)

• Business Income Insurance. This is disability coverage for your business. This ensures you get paid if you lose income as a result of damage that temporarily shuts down or limits your business.

• Directors and Officers Liability – Financial coverage for defense costs and damages (awards and settlements) cause by allegations and lawsuits brought against an organizations’ board of directors and/or officers (and the decisions made by these individuals). This is more typical for publicly-traded companies and nonprofits, that have boards and/or multiple investors.

Rule of Thumb: Never settle for inadequate insurance for your business (or for yourself). If you started out with $200,000 in property insurance and your business has successfully grown worth of well more than half a million dollars, you need to update your coverage so that a fire, flood, theft or another misfortune won’t leave you at a destructive loss. It can be hard to imagine the worst happening when business is good, and hefty insurance premiums are low on your preferred expenditures list. But while a low quote may look good on paper, lesser coverage can make or break your business should an accident occur.

Shop Carefully: Insurance policies come in a wide variety with many different features, benefits, and prices.  Talk to an agent you trust and go over your policies with them so that you understand your coverage and its cost, and ensure you choose policies that adequately cover your business needs.

Pure Risk Solutions specializes in commercial insurance, assuring customized coverage related to your unique business. Our goal is to help protect your exposures at an affordable price, whether you are in the startup phase or want to review your existing policies to make sure your thriving business is protected the way it should be.

For specific questions related to your business, or for a free quote or policy review, reach out to me,  John Jacquat, at (303) 834-1001 or at  john@purerisksolutions.com.