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Different Types of Insurance Coverages  image

Different Types of Insurance Coverages

Small business insurance coverage is a tricky subject for many new business owners. While there are certain industries where liability insurance is an absolute must - health care, for example – business owners in many other industries often question whether small business coverage is right for them.
For starters, many new business owners assume that if they structure their company as a Limited Liability Corporation (LLC) or similar legal entity, they're protected against many of the risks that insurance for small business is intended to cover. But, that protection is quite different and narrow. Not only that, but you may not recognize your legal vulnerabilities until it's too late. Daunting, right?
The good news is insurance providers like us here at AmVenture Insurance Agency, Inc. offer a wide variety of small business insurance options that allow you to tailor coverage to suit your business. Here's a rundown of the most common types of small business coverage, and when it's a good idea to consider them.
Small Business General Liability Insurance
Think of general liability insurance as a security blanket that covers your business and any employees you may have. If your business is sued for damages that result from your negligence, your policy is designed to protect you from covered losses, even for costs associated with defending against a lawsuit. General liability insurance can also cover against advertising injury, such as copyright infringement or libel.
Property Insurance
This type of small business coverage is designed to protect your business from losses to your business assets, including equipment, furniture and real property. If you operate a home-based business, however, you should keep in mind that many standard homeowner's policies won't protect your business-related losses. In that event, you may need extra coverage.
Business Interruption
If your business is temporarily disrupted due to weather, cyber-attack or other unforeseen hazards, business interruption insurance coverage – which can vary depending on the policy – is designed to replace your lost income and provides funds for temporary operations until your normal business is restored.
If you determine these three types of protection make sense for your business, look for an insurance company that will bundle these coverages into a single business owner's policy, or BOP, which can typically be further customized for your business. You'll have the convenience of a single monthly premium, and you'll be keeping your small business insurance costs down at the same time.
Depending on the type of business you own, you may need additional coverage not included in a BOP:
Commercial Auto Insurance
If you lease or purchase vehicles for use in your business, or if you have any commercial vehicles, you generally will need commercial auto insurance to cover you against property damage and liability for accidents. Even if you have personal automobile insurance on a car you use for business, you may not be covered for damages that occur when you're engaged in business activities, so be sure to ask your agent.
Cyber Liability
With more and more business being conducted online, cyber threats and their ability to impact organizations and their customers are more pronounced than ever. Your cyber insurance needs will vary depending on the type of business you're in, but if you maintain electronic records concerning your customers and/or employees, you may need cyber liability insurance. Cyber liability insurance may also protect you against costs associated with what can otherwise be a costly data-recovery effort.
Workers' Compensation
Every state has its own worker's compensation laws, but this type of coverage requirement usually kicks in once you have a minimum number of employees – sometimes three to five. Be sure to check the requirements in your state.  Your worker's comp policy is designed to cover employees’ medical expenses in case they are injured on the job, and it can also protect your business from further liability claims from employees.
Employment Practices Liability Insurance (EPLI)
If you have employees, you may want to consider EPLI, which can cover your business for employment-related claims such as discrimination, wrongful termination, harassment or retaliation. Although these policies are commonly used by larger corporations, we’re able to offer affordable insurance for small business that guards against employee-related losses.
If you're not sure which small business insurance plans you need to help minimize your risks and grow your business with confidence, we can explain these products in detail and help you find a policy for your business. Reach out to us to learn more.
AmVenture Insurance Agency, Inc. (“AmVenture”) is a licensed insurance producer affiliate of AmTrust Financial Services, Inc.  This material is for informational purposes only and is not legal or business advice.  Neither AmVenture nor any of its subsidiaries or affiliates represents or warrants that the information contained herein is appropriate or suitable for any specific business or legal purpose.  Readers seeking resolution of specific questions should consult their business and/or legal advisors.  Individual coverage may vary and may not be available in all states.  In the event of a conflict with the material herein, the terms and conditions of any issued policy will control.  Any claim examples are general, may or may not be based on actual claims, and are for illustrative purposes only.  Any available coverage for a claim will be determined based on the facts and circumstances of the claim as well as the terms and conditions of the policy, including any applicable exclusions or deductibles.

The opinions expressed herein by columnists are their own, not those of AmVenture Insurance Agency, Inc., its subsidiaries, or affiliates.