Do you have the right Business Insurance Coverage?
Do you have the right Business Insurance Coverage?
Consider what might happen if an employee accidentally damaged a client’s $400k piece of equipment, or if one of your products caused a fire that destroyed someone’s home, or if your own building and office space were wiped out by a hurricane. Running a business involves all kinds of risks and it is important for every company to have the appropriate insurance to protect their company’s assets if they are destroyed or when someone makes a claim against them. Businesses in Florida are sued everyday due to accidents they are responsible for causing. It is crucial to ensure your business is properly covered in these cases. Below I will discuss the different types of business insurance in greater detail. The goal of this post is not to scare you, but rather to make you aware of certain instances that could end up costing your business. Being proactive rather than reactive about business insurance could potentially save your company.
General Liability Insurance
General or commercial liability insurance helps protect your company against claims of bodily injury, property damage and associated medical costs. For example, if a customer slips and falls in your office or an employee drops a customer’s laptop and breaks it, a general liability policy covers the damage. Most general liability policies also cover claims of libel or slander and claims that a published document, report or advertisement damaged an individual or company.
Product Liability Insurance
If you manufacture a product, product liability insurance helps pay for damages if the product has a safety flaw or defect that causes injury or damage. The type and amount of product liability insurance you need depends on the kinds of products you make or sell. For example, if you manufacture lamps, your risk of a claim is higher than if you make t-shirts.
Professional Liability Insurance
In Florida, when you operate a professional services business such as accounting or consulting, this liability insurance covers damages caused by the services you provide. One type specific type of professional liability insurance is known as errors and omissions insurance. It covers mistakes, such as when an accounting firm makes a mistake on a client’s taxes and the client owes interest and penalties to the IRS. Medical malpractice insurance is also a specific type of professional liability insurance. Most states require certain professions such as doctors and dentists to carry professional liability coverage.
Commercial Property Insurance
If a flood destroys the office space you rent or a fire destroys your company’s property, commercial property insurance helps pay to replace or repair what’s damaged. An all-risk policy insures you regardless of the cause of the disaster. A peril-specific policy covers you only for specific disasters such as fire, flood or theft. Many insurance companies also offer business interruption insurance that reimburses you for lost revenue or sales in case of a disaster.
Commercial Automobile Insurance
If you have company-owned vehicles that you and other employees drive, most states require you to carry commercial automobile insurance. A commercial automobile policy is similar to a personal automobile insurance policy and might include liability, collision, comprehensive damage, un-insured motorist and underinsured motorist protection. Commercial auto liability insurance helps protect you against claims of bodily injury, property damage and medical costs caused by an accident involving a company-owned vehicle. You might also choose to add coverage in case the other driver involved in an accident either doesn’t have insurance or doesn’t have enough insurance to pay for damages he caused. Collision insurance pays to repair damages to your vehicle after you satisfy your deductible. When your vehicle is damaged without an accident, such as in a hailstorm, comprehensive coverage helps pay for the repairs.
Employment Practices Liability Insurance
Your employees are your greatest asset and sometimes your greatest risk. Employment practices liability insurance, or EPLI, covers you if you’re sued for harassment, discrimination, wrongful termination or other labor-related claims. You can usually expand an EPLI policy to insure officers and outside directors against claims that their decisions caused damage to another company or individual. Most lawsuits that name outside directors are employment related.
When you purchase insurance, your policy will have a limit to the amount it pays and you’ll have a deductible that the company must satisfy before the insurance company pays. Many general liability policies don’t cover the cost of defending the company against a claim; they only cover damages if the company is held liable. EPLI policies often have a “shrinking limits” clause that pays for defense costs, but subtracts the money spent on the defense from the amount the insurance company will ultimately pay for damages.