Do You Have the Right Insurance for Your Business?

Part of risk management involves not only having insurance but having the right coverage included in your policy. Here are four elements of your insurance policy we recommend reviewing regularly with your agent.

1. Do you have adequate insurance to rebuild your business property and replace your merchandise and possessions?

A building and personal property (BPP) policy covers the building, your business personal property, and the personal property of others. Categories covered include furniture, fixtures, merchandise, personal property owned by you and used in your business, tenant improvements (if leasing/renting), etc. To ensure you have adequate coverage for all of these assets, the value of your property needs to be accurately reported and updated annually to reflect inflation and other changes in costs.

2. Do you have the right insurance in place to protect the personal property of your employees?

To protect the property of your employees, you will need personal effects and property of others coverage added to your policy. This coverage extends up to $2,500 worth of business personal property coverage to your personal effects as well as that which belongs to your officers, partners, and employees. This coverage also protects the personal property of others in your care, custody, or control. Limits higher than $2,500 can be purchased if needed.

3. Does your current policy provide coverage to help keep your business open after disaster?

Business interruption insurance is essential to ensuring a quick resumption of your business after a disaster. Without it, your business may have to close down completely while the premises are being repaired, which may leave you susceptible to losing out to the competition. There are three types of business interruption insurance: business income coverage, extra expense coverage, and contingent business interruption insurance. Talk with your insurance agent to ensure you have the right type of policy and sufficient coverage to protect your business.

4. Will your current insurance policy protect your assets from a lawsuit?

A commercial general liability (CGL) policy protects your business assets against many common liability claims, including bodily injury, property damage, personal injury (including slander or libel), and advertising injury (damage from slander or false advertising). A CGL policy will cover the cost of defending or settling claims. The two major forms of liability insurance policies are occurrence and claims made. An occurrence policy covers you for the policy amount you had in place when the actual injury occurred, not when the claim was made. A claims-made policy covers you for the policy amount you have in place when the claim is made.

“One of the biggest mistakes business owners make is that they don’t buy the right type of insurance and often have gaps in their coverage. Business owners should contact their insurance agent or company representative annually to make sure their insurance is adequate.”

Loretta Worters, Vice President, Insurance Information Institute

A regular review with your insurance agent can help ensure your policy is kept up to date with the changes in your business and industry. Contact us  today for a review.

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