Critical and Often Overlooked Small Business Coverages

Written By Charlotte Insurance on June 30, 2021. It has 0 comments.

a small business owner hanging an 'open' sign on their door

General liability insurance? Check! Commercial property insurance? Check! Think that’s all the business insurance you need? Wrong!

Every business faces unique challenges and risks which means every business needs insurance tailored to their needs. If you only have the basic coverage, you’re missing out on a lot of protection. Here are several overlooked (but very important) coverages for small businesses.

Liability Coverage

As a small business owner, you know you need general liability insurance. You may even purchase coverage specific to your industry such as liquor liability for restaurants or builders risk insurance for construction companies. But there are other liabilities you face as a business and without the right insurance, you stand to lose a great deal when something goes wrong. Consider the following coverage.

Cyber Liability

If even one business computer has any amount of customer information on it, you’re at risk of a data breach. Cyber criminals target small businesses, betting on the near certainty that you haven’t put a security protocol for your data in place. The big companies might make the headlines for their breaches, but smaller companies are the likelier target because of how vulnerable they are.

After a breach (once you discover it), you’ll have a great deal of responsibility: letting people know, monitoring credit information, fixing the breach, repairing your business reputation. Cyber liability insurance helps you through all of it.

Employment Practices Liability

It only takes one angry ex-employee or one bad manager to bring a lawsuit down on your head, even if you know you did nothing wrong. Employment practices liability insurance (ELPI) covers you when your business is accused of wrongful termination, harassment, discrimination, and more. It covers the legal costs of the lawsuit and the settlement amount, if it comes to that.

Professional Liability

If any part of your business model relies on your knowledge and expertise, it’s possible you’ll make a mistake or be accused of negligence as a professional. At the same time, if you market your business, you could be accused of breaching copyright. When these accusations arrive, it’s usually in the form of a lawsuit. Professional liability insurance protects you and helps pay settlements.

Umbrella Coverage

It’s impossible to know how big a liability claim might be. All it takes is one catastrophic moment or one bad decision for a claim to outpace your policy limits. Umbrella coverage kicks in to cover the remaining amount if your liability exceeds your insurance coverage. You might only need it once in a while, but you’ll be glad you have it when you do.

Property Insurance

Carrying generic “property insurance” for your business may not be enough. Consider these overlooked coverages to better protect your company.

Business Interruption

In general, your commercial property insurance will likely include coverage for some business interruption. But what if your business is interrupted by a peril not covered by your standard policy? This is where business interruption insurance comes in handy.

Contingent Business Interruption

Sometimes your business gets stalled not because of anything you’ve done (or that’s happened in your location) but because of problems with vendors and suppliers. You don’t have what you need to make and sell your product, and your business revenue suffers. Contingent business interruption insurance is made for these circumstances, although not enough small businesses take advantage of it.

Auto Insurance

If you think commercial auto insurance is only for businesses with a company vehicle, think again. Every time you or an employee runs an errand for the business in your vehicle, you as the owner are opening yourself up to liability and extra expenses. Commercial auto insurance covers anyone driving on company time for company purposes, even without a company car.

Flood Insurance

Your commercial property insurance will cover a great deal of disasters, like fire and lightning. But one thing it likely won’t cover is flood damage. Most homeowners know they should purchase flood insurance, but it’s not something business owners think too much about. Where it can rain, it can flood, and when it does, the expenses are ruinous. Flood insurance for your small business will help you rebuild and get you back to work sooner rather than later.

Basic business insurance coverage is a great place to start as a small business, but there comes a time when your company needs more protection than standard policies can provide. Contact Charlotte Insurance today and let’s discuss the unique needs of your business to find the right coverage to keep the doors open long into the future.

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