Considerations for Choosing Commercial Insurance Coverage

Commercial insurance coverage is critical for any business. Assets and employees need to be protected. Without coverage, businesses are exposed to a range of serious issues. There are various types of coverage, and some are more relevant to specific industries than others. Consider the following when outfitting your business with commercial insurance coverage.

What is Commercial Insurance?

Commercial insurance allows businesses to protect their assets. It is designed to safeguard employers against common issues that can arise in the workplace. Commercial insurance is essential for businesses of all sizes. Injury, property damage, liability charges, and an array of other hazards are a constant possibility regardless of industry. It is critical that business owners are prepared for anything. For example, an accidental fire or weather event could occur at any time. Lack of insurance coverage can leave an employer on the hook for potential thousands of dollars in repairs, fees, fines, or other damages.

Types of Commercial Insurance Coverage

Business Interruption

Unfortunately, a weather event or serious property damage can force you to have to close your business at any time. For example, if a tree falls on your building, you will need to close for repairs. If a covered loss forces you to shut down, business interruption insurance can help cover operating expenses, such as:

• Revenue
• Mortgage, rent and lease payments
• Loan payments
• Payroll
• Taxes
• Relocation costs
• Training costs

Workers' Compensation

Among the types of insurance business owners need to protect themselves, workers’ compensation is one of the most important. Workers’ compensation insurance covers medical expenses and a portion of lost wages associated with an employee injury. Coverage also includes rehabilitation and death benefits. Workers’ Compensation insurance is required by law in most states. There are countless hazards associated with workplaces within all industries. Some companies, such as building construction, deal with more risk than others. Accordingly, there may be more of a need for workers’ compensation coverage for some organizations. However, all companies that have employees are at-risk and should be outfitted with comprehensive workers’ compensation coverage.

EPLI

Employment practices liability insurance (EPLI) covers businesses against claims made by workers. This is especially crucial for smaller companies that cannot afford massive legal fees in the event of a lawsuit. EPLI provides protection against claims made by employees, including claims of:

• Wrongful termination
• Sexual harassment
• Discrimination
• Breach of employment contract
• Negligent evaluation
• Wrongful discipline
• Deprivation of career opportunity
• Emotional distress
• Failure to promote
• Mismanagement of benefit plans

Errors and Omissions

Errors and omissions insurance is a type of liability protection that guards against losses not covered by traditional liability insurance. It protects businesses from claims in the case of a lawsuit over negligent acts, errors and omissions committed in the course of business activities that cause financial loss. These policies are written to account for the inherent risks and common exposures associated with different industries. For example, an accountant is exposed to very different risks than a line cook in the course of day-to-day business. Policies usually cover the business owners, the salaried or hourly employees, and any subcontractors working on behalf of the company.

Cyber

More and more of day-to-day business operations are becoming reliant on the internet. Remote work and eCommerce are rapidly rising in popularity, which means more sensitive data is exposed to risks associated with data breaches. Cyber insurance covers a business’ liability for a data breach involving sensitive information, such as:

• Social Security numbers
• Health records
• Financial information
• Personal information
• Driver’s license numbers

Commercial cyber insurance helps cover legal fees and expenses, repairing damaged computer systems and restoring personal information. In 2021 and beyond, it is critical that businesses of all sizes are outfitted with cyber insurance.

Personal Asset Exposure

Business owners need to protect their personal assets as well as those directly associated with their companies. Professional liability insurance can safeguard business owners should an event occur that deviates from the industry’s standard of care. People make mistakes, so it is important to plan around that and ensure that business leaders are protected with comprehensive insurance as well. Consult with a commercial insurance underwriter about the specific risks you face as a business leader in your field.

Things to Consider

Size of Business

It is important that your insurance products are suitable for the size of your business. A small business with fewer than 100 employees, for example, would need a standard small business policy, also known as a business owners policy (BOP). This option allows for more affordable coverage that small businesses can easily manage. Alternatively, larger businesses may need additional coverage. The larger your space and the more employees you have, the more risk you need to mitigate. Fortunately, an insurance underwriter can help tailor your insurance products to the specific needs of your business and make sure you are only paying for the coverage you absolutely need.

Remote vs. Brick-and-Mortar

If you own a brick-and-mortar commercial space that employees and customers visit, it is critical that you have liability coverage. This type of insurance will protect your company in the event of an injury. Medical costs can be substantial, and can ultimately jeopardize the future of your business. The risks associated with leaving your business uncovered are significant, including potential legal fees. Remote businesses do not necessarily face the same hazards. However, commercial insurance is important for companies that operate digitally. Property insurance, for example, can cover company-owned tools and materials, such as computers. Commercial general liability coverage can also cover injury caused by advertising, such as copyright infringement or libel. Depending on the state, workers’ compensation coverage is often necessary whether an employee is working from home or in-person.

Company Vehicles

If your organization uses a company car, you will need commercial auto insurance. This protects your business in the event of an accident, injury, or work-related loss that a personal car insurance policy may not cover. Vehicle accidents or damages can be extremely costly, so it is important to make sure your cars or trucks are covered.

Additionally, trucking companies will need to rely on motor truck cargo insurance to insure their cargo.

Budget

Naturally, the bigger a business is, the more resources they will have available to invest in insurance. No company should have to pay for excess coverage they do not actually need, so it is important to work with a commercial insurance underwriter to choose the right coverage for your specific needs and budget. Commercial insurance can be tailored to businesses of all sizes to ensure protection of important assets and employees.

Common Exclusions

Every insurance policy is different, but some common commercial insurance exclusions include:
• Expected/intended damage
• Liquor liability
• Pollution
• Contractual liability
• Breach of contract
• Failure of goods and services to perform
• Electronic chat rooms/bulletin boards
• Infringement of patent, trademark or trade secret
• Aircrafts and watercrafts

Contact us

If you are looking for commercial insurance coverage, call 888-9OSPREY (888-967-7739). Our underwriters can help you choose the insurance products you need to protect your business.