What Type of Insurance Does Your Business Need?
When you own a business, there are a lot of risks to worry about and all the different types of business insurance can be complicated and overwhelming to navigate. In many cases, a Business Owners Policy (BOP) is the most cost effective way to maximize coverage for your property and liability exposures. Very often though, BOP’s don’t provide enough coverage and/or are not available – especially for larger or more specialized businesses.
The various types commercial insurance available are as follows:
- Business Owners Policy
- Commercial Property
- Commercial General Liability
- Professional Liability (E&O)
- Garage Liability
- Business Auto
- Employment Practices Liability
- Directors & Officers Liability
- Fiduciary Liability
- Workers Compensation
- Commercial Umbrella
- Surety Bonds
- Life, Disability and Health Insurance
As you can see, there are lot of different types of business insurance to explore and these are only the most common ones. How do you determine what your business needs? We can work with you at Shields Insurance to decide your priorities by answering a few questions:
- How much do lawsuits cost?
- What industry are you in?
According to the US Chamber of Commerce, lawsuits cost small businesses $28 Billion in America ($133 Billion if you include medical malpractice). The median costs of lawsuits for businesses range from $54,000 to $91,000, but very often the sums are much larger.
Liability insurance is designed to protect your business from tort (along with certain types of contractual) liability. The most common liability limit to buy is $1,000,000, but many companies opt to buy more.
When evaluating how much liability coverage, start by asking a few deeper questions:
- What is the average cost of defense (even if not at fault) for lawsuits in my industry?
- What is the likelihood of getting sued?
- How much could a Plaintiff take from my company (what is my annual profit and total asset values)?
- What are the most likely causes of lawsuits? These exposures will also help determine the type of liability insurance.
Depending on your industry, there are various levels of coverage and types of liability policies you may want to consider. For example, if you are in the construction industry, higher liability limits may be more important than if you are simply a travel agency. Additionally, if your company provides professional services, then a standard General Liability policy may not cover you properly (i.e. Professional Liability may be required).
To learn more about how you can buy the right insurance coverage, check out the Ultimate Guide to Buying the Right Comprehensive Business Insurance.