6 Kinds of Business Insurance You Didn’t Know Existed

Business Insurance.

These two words are enough to strike fear into the hearts of many a small business owner. And rightfully so – if you own a business, chances are you’ve had to go through the process of finding the proper kinds of business insurance, and you know this can be a daunting task.

So many different factors enter into the decision on which types of coverage you need, and what your coverage amounts should be. Plus, there are so many different types of coverage out there, how can you be sure you’re getting what you need, if you don’t know exactly what’s available to you?

It’s always advisable to work with a trusted, seasoned insurance professional, who can make sure you’re always on the right track, but even so, one of the best things you can do, is educate yourself. When it comes to business insurance, ignorance is not bliss!

To start you off on your journey, here are a few examples of some little-known types of insurance and why you might want to consider purchasing them.

Employment Practices Liability Insurance (EPLI)

EPLI covers liabilities that can occur within the employment process. Claims filed by employees such as those for wrongful termination, discrimination, sexual harassment, or other civil or legal rights can be covered. Other types of inappropriate workplace conduct can be covered, such as defamation, invasion of privacy, deprivation of a career opportunity. EPLI insurance can cover the judgement for which the insured is liable for, as well as other legal defense costs.

Home Business Insurance

If you’re running your business out of your home, be sure to look into Home Business Insurance. Most of the time, a typical homeowner’s insurance policy won’t cover certain types of claims that can arise if you’re operating a business out of your house. Some scenarios that you may want to consider when deciding if you need Home Business Insurance include loss of inventory, giving advice that costs a customer money, or injury to someone on your property.

Terrorism Insurance

Often times, Terrorism Insurance can be written into basic commercial property or other types of commercial insurance policies, but not always. It’s not a bad idea to check your existing policies and review them to make sure you have this coverage, or to make sure you have enough coverage – some types of business can have a higher risk of terrorist activity than others.

Income Stabilization Weather Insurance

We’re all familiar with insurance that covers natural disasters – but weather doesn’t have to be extreme to still cause damage or loss to a business.

Many businesses can have seasonal sales patterns, and often these can be at the mercy of the weather. For example, if an area of the country which normally sees heavy winter snowfall happens to have an unusually warm winter, this could harm sales of business that rely on that snowfall.

Cyber Liability Insurance

Cyber Liability Insurance, or Cyber and Privacy Insurance, can be a necessity for companies who engage in activities such as selling goods or services on the internet, or who collect customer data within their own electronic network.

This type of insurance protects businesses against losses caused by data breaches, where customers’ personal information such as social security or credit card numbers, are stolen by hackers. Insurance can help cover the resulting costs incurred by customer notification, credit monitoring, claims filed by state regulators, fines, etc.

Cyber Insurance can also cover other costs that may result from a company’s web site being hacked, such as interruption to business and fraud.

Directors and Officers Liability Insurance

Directors and Officers Liability Insurance, or D&O, protects directors and officers of a company or organization against legal action resulting from alleged wrongful acts or claims of mismanagement. D&O Insurance will not only pay for the judgement if the insured is found to be legally liable (up to the policy limits), but also the resulting legal defense costs.

As mentioned at the outset, it’s always advisable and preferred to work with an Insurance Agent or Broker whom you trust and has experience with your line of business. But that’s no substitute for arming yourself with knowledge. By making sure you’re aware of the different types of business insurance coverage that may be available to you and your business, you’re simply doing the smart thing, and ensuring that everything you’ve worked so hard to build up, is properly protected.

Incorporating Business Insurance in Risk Management – Even for Small Businesses

Risk management is an endeavor in which most successful businesses engage to some degree or another. Whether it be a formal procedure developed at the executive level of a large company, or a more intuitive examination performed by an astute small business owner, assessing and dealing with risk. In general is something most businesses do as part of their basic planning. No matter who you are, or what business you’re in, avoiding risk management is a risky decision in and of itself.

Why insurance exists in the first place

Of course, no major effort in risk management for a business can really occur without taking into consideration the potential for unforeseen harm affecting your operations. Indeed, this is the purpose of insurance in general, and it’s certainly the reason why business insurance exists specifically.

Are you really engaging in risk management for you’re business if you’re not taking seriously the kind of insurance you have for that business? Probably not.

Risk management for small business?

You can never be too small a business in order to engage in both risk management and due diligence in the choice of small business insurance for your company. The truth is that even small businesses can be seriously undermined or even ruined if they don’t engage in the proper assessment of risk that involves insurance coverage. Unless you’re adequately covered, you simply have not engaged in proper risk management — no matter how small your business is.

Assessing your risk is the first step

When any business engages in risk management, assessment is the first step. You need to know what kinds of risks your business faces in order to take that next step in determining how to in fact deal with those risks.

Transferring your risk is where insurance comes in

Where business insurance comes in is determining just how much of that risk you’re going to in fact transfer to someone else — an insurance company — and how much they’re willing to assume that risk for you. Transferring that risk is obviously one of the more desirable remedies in dealing with risk of any kind. If you can get someone else to essentially assume it for you, without making an unnecessary investment in dollars yourself, then not only are you engaging in smart risk management, you’re engaging in smart business — period.

Insurance companies are like risk management outsourcing firms

In fact, the entire insurance industry exists on this basic premise, doesn’t it? Insurance companies provide insurance so that all businesses can transfer a basic component of their risk assessment to someone else. Insurance companies make money by assuming that risk for you. You make money in properly transferring some of the risk involved in running your business. It’s capitalism at its purest. You really can’t go wrong when business entities engage in mutual profit enhancement, can you?

The insurance component of your risk management efforts is probably the most desirable to address. There are some risks you simply have to assume for yourself, some risks you have to figure out how to minimize yourself, and some risks you have to learn how to eliminate yourself. Those constitute the major remedies after an initial assessment of risk.

The insurance industry specializes in risk management transfer

What differentiates insurance from those other remedies is that the entire insurance industry exists in order to manage it for you. Its risk management outsourcing at its finest and it has literally been fine crafting its skills for hundreds of years. Ideally, things like small insurance exist not only to handle some of your risk management for you, but they exist so that you do it at a cost most favorable to you.

What’s easier for a small business owner? Get the right insurance from a company that offers great coverage at an acceptable fee? Or hiring your own staff to figure it out for you, without the proper experience or knowledge, and without the specific resources specializing in the field? While nobody would consider an insurance company to be a magic pill to deal with risk management, they do allow you to outsource one component of it with business and small business insurance that’s right for you and your company.

Business insurance helps you address basic risk management

Whether you’re a Fortune 500 company, or small manufacturer of baseball bats, risk management is probably a necessary component of operating a successful business. After assessing your risk, you need to someone effectively deal with it. That’s where small business insurance in particular comes in. Business insurance providers essentially allow you to transfer a part of your risk assessment to someone else. They’re experts at it, and they allow you to focus on your core competencies and other risks associated with doing business.

Everything You Need to Know About Small Business Insurance

Starting a small business is a great way to prepare for the future. It is not just about the financial aspect of it, but also the kind of hope and stability that it would be able to provide to the individual or family who does so. Of course, the projection for every business that’s started is that it would eventually become successful, in every aspect that’s imaginable.

Even though every small business that’s been started is going to result in success, it does not always turn out to be so. Or at least, the road to eventual success is not an easy one. That is why having insurance is a must, even for the smallest of businesses. It is the kind of risk protection that everyone and every establishment requires, so that any loss that could possibly occur would be minimized.

However, choosing the right insurance could also be something of a challenge. This is because there are several options available out there, which could make things a bit more daunting. And because of the numerous options that you could possibly encounter, it would be good for you to start comparing various business insurance options right now, or as soon as you could do it.

There are a few basic things that you need to learn about small business insurance – and one of the top things that you have to know is that there are different options that depend on the specific type of business that would get the insurance coverage. There are similarities on the kind of business insurance that small business owners require. It is usually a combination of any of the following: Property Insurance, Commercial Auto Insurance, Liability Insurance, Business Owner’s Package Policy (BOP), and Worker’s Compensation Insurance.

Of those that have been listed down, the most common coverage for small business insurance are Liability and Property Insurance, and there’s definitely some good reason for that. If we suppose that the physical assets of your small business happens to be damaged or even destroyed, for whatever reason, then the small business insurance that got for it would take care of the expenses needed to get it repaired or if anything has to be replaced at all.

In addition to that, every business – be it big or small – is liable to being sued or at least has that threat hanging over it all the time, so it is highly recommended that every small business gets liability insurance as an important part of the small business insurance policy that every business owner would like to have for the business he owns.

Getting a small business insurance policy does not mean that every business owner needs to spend a ton of money for it. There are ways that would help a business owner save costs on the insurance policy, and it would be good for every owner to know about it. Options such as looking around and comparing business insurance quotes from different insurance companies and also considering a package business insurance policy, e.g. a Business Owner’s Policy (BOP) are available for business owners.