What are the various business insurance policies needed to fully protect your US-based business? How can you use insurance to protect your company?
In this article, we will show you the six most neglected business insurance policies that could mean the difference between keeping your business open or shutting it down for good:
1. Cyber Insurance
Cyber insurance is similarly difficult to understand. Because there is no such thing as “standard” insurance, the wording must be carefully evaluated by an experienced agent.
This information is usually quite rudimentary, and it won’t likely cover current challenges like phishing or ransomware that organizations are dealing with.
Request a quote for a separate, stand-alone cyber policy; you might find that the cost isn’t all that much more for substantially more coverage.
2. Non-Owned or Hired Auto Insurance
You could assume you don’t need this one if your company doesn’t own any vehicles. Hired and Non-Owned Auto Liability, on the other hand, is developed specifically for enterprises without commercial vehicles. It’s actually two independent coverages, but in insurance talks, they’re often lumped together.
Liability Insurance for Non-Owned Automobiles
If you or your staff use personal automobiles for work purposes, the company is defenseless. A business is not covered by a personal auto policy. If your employee, for example, goes out to make a bank deposit and causes an accident, they are individually liable. However, the company might be held liable as well. The assets of the company are safeguarded by Non-Owned Auto coverage.
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Hired Auto Liability Insurance
This coverage is required if you or your employees rent or lease automobiles for business purposes. The most prevalent situation is rented cars. If an accident occurs while your employee is driving a rental car to a work-related out-of-town convention, the driver is held liable. If the business does not have Hired Auto Liability, they are vicariously liable and could incur out-of-pocket expenditures.
Coverage for Other Automobiles
If you are assigned a corporate vehicle but do not own a personal vehicle or have personal auto insurance, you should add Drive Other Car Coverage to your Commercial Auto policy.
If you ever need to borrow or test drive a car for personal reasons, keep in mind that your commercial auto policy may not cover non-company owned automobiles, leaving you vulnerable.
3. Professional Liability Insurance (or Errors and Omissions)
Professional liability insurance is becoming increasingly necessary. Attorneys, accountants, physicians, engineers, insurance agents, realtors, and other professionals who provide professional services are the target audience. When the ultimate product is professional advice, you will need a certain level of coverage to protect yourself from legal costs and the consequences of your advice.
As more businesses require this coverage, it is now widely available for contractors, advertising, and consultants of all types. An HVAC contractor, for example, who primarily repairs systems, may not require professional liability insurance.
However, if they stray from the original system plan during the course of their job and the HVAC system fails as a result of that divergence, it might be regarded as expert counseling outside of the ordinary scope of work and subject them to professional liability. Without this coverage, the General Liability policy may lapse, leaving the company responsible for the damage.
4. Employment Practices Liability Insurance (EPLI)
If you have employees, you should think about getting an Employment Practices Liability policy. If there are any charges of unfair hiring or terminations, harassment, gender discrimination, wrongly paid wages, or other similar issues, this coverage can cover legal costs and other fees for your company.
It protects the company not only if they are the ones accused of mistreatment (first-party liability), but also if the harassment came from persons who work for your company, such as vendors or delivery drivers (third party liability).
For a variety of reasons, insurance experts foresee an increase in Employment Practices claims, ranging from dangers linked with temperature checks to remote working hours and salary difficulties, as well as whistleblowing and retribution.
What is the average Employment Practice Liability Insurance claim cost? EPL claims cost an average $50,000–$70,000. Some Jury Verdicts believe that this could be more.
5. Employee Benefits Liability
This coverage is required if your company has employees and provides benefits such as health insurance, pensions, vacations, tuition help, unemployment, and so on. It protects you from any administrative errors or inaccurate benefit explanations on the part of the company.
Benefits administration is a time-consuming operation, and errors sometimes occur. Employee Benefits Liability, for example, might respond if a new employee was unintentionally left off health insurance and suffered a major injury six months later only to discover their health insurance was not in force. Otherwise, your employee will most likely sue the company to get the medical expenditures paid, at the very least creating an unpleasant work atmosphere for everyone concerned.
According to a report by the US Bureau of Labor Statistics in 2018, the average annual cost of employee benefits per employee was $21,726.
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6. Foreign Liability as One of the Most Vital Business Insurance Policies
You may need to consider overseas liability coverage depending on the type of business you conduct and how frequently you embark on international business travel outside the United States. It covers personal injury and property damage that occurs outside of the United States, as well as claims and lawsuits filed in other countries.
A typical General Liability policy restricts coverage to claims made in a specific territory, which is often the United States, Canada, and Puerto Rico. Most won’t pay for legal fees or cases filed in other countries’ courts. This is one of the business insurance policies you will need when traveling to Dubai or Saudi Arabia from the United States.
There is no such thing as a one-size-fits-all foreign policy. “Organizations with overseas risks should consider consulting with an experienced insurance broker and/or coverage counsel to advise them and negotiate optimal policy language suitable for their risk environment,” writes Risk Management Magazine, “because there are so many different potential issues to consider.”