Insurance is a necessity in today’s business. It can solve problems for a fraction of their real cost and gives business rather formidable flexibility when it comes to customer service, manufacturing, shipping, and simple mistakes. The problem is, most insurance policies are challenging even for attorneys and insurance companies are famously uncooperative when it comes to any subject other than selling another policy.
So what should a small business or other enterprise do when starting out? What kind of insurance policies and coverages can a company do without, and which kinds of insurance do they absolutely need? Below takes a look at some insurance musts your business should put on the list going in.
Data Loss
This kind of policy is also known as "Data Breach" insurance. Given the frequency and expense of information systems break-ins, ransomware, and various other kinds of IT hazards, having the costs of overcoming a breach covered could mean the difference between staying in business and bankruptcy. There are now numerous state regulations regarding notification policies, compensation, and various other unavoidable expenses in the event of a breach. As every business owner knows, these things are not free. While this kind of insurance likely won't have a high premium, it will definitely be worth it, if the unexpected happens.
Commercial Vehicle
From an insurance standpoint, the difference between a personal vehicle and a commercial one is roughly the difference between a triceratops and a small dog. The last thing any business owner wants is to be notified by a truck accident attorney that their insurance doesn't cover an incident. Every company that uses a vehicle to do anything related to business should make absolutely sure they are covered by a policy that doesn't deactivate itself in the event of an accident on company time.
Errors and Omissions
This is traditionally one of the least expensive insurance policies in the industry, but for any company that does custom work, invoices clients for anything that can be evaluated subjectively or performs services that may lead to a poor outcome for their customers, errors and omissions insurance is a must. This kind of policy is commonly combined with other kinds of coverage in omnibus business policies, so it is rarely an expensive option. But like most obscure coverages, it is nice to have when a project or delivery goes wrong for some reason.
The best advisors for insurance coverage are your attorney, accountant, and provider since they will have myriad stories about the companies that didn't buy the right coverage at the right time. These two advisors will make being prepared that much easier. Use the above ideas and decide what kinds of insurance will work best for your kind of business.
If you would like to talk to an expert risk advisor about different coverages, reach out to our local expert Jeff Mostek here, or visit our business coverage page to look over our different products and choose a product to get quoted on. Or to have someone reach out to you, fill out the short form below.