Running a business can be one of the most rewarding endeavors a person undertakes, yet it comes packaged with genuine financial uncertainty. Regardless of whether you own a lean startup or a time-honored business, you can be struck by unforeseen occurrences-like accidents on-site to costly lawsuits-that could risk the safety of the business you’ve worked so hard to achieve. Business insurance is simply here to guard you from those blows and to provide the financial safety net that will help you and your employees work without stress and with ease.
Today’s insurance market carries a spectrum of choices that caters to different sectors, risk appetites and business sizes. While diverse, this range of options can sometimes be overwhelming as you attempt to decide what coverage you simply cannot live without. In order to streamline the process, we’ve broken down what we feel are the top five forms of business insurance coverage essential to nearly all companies.
The 5 Types of Business Insurance Every Company Should Consider
General Liability Insurance. “General liability is the foundation of a robust business insurance plan. The policy provides coverage for third-party claims involving body injury, damage to a third party’s property, and claims that fall under advertising and personal injury such as defamation, libel or copyright infringement. If a customer slips on your floor or a competitor states your latest advertisement libels them, then you will have the funds to defend and pay for these kinds of damages, settlements and judgments. Without adequate coverage, a single lawsuit can take years of savings and cost your entire business its existence. “
Commercial Property Insurance. “Commercial property insurance is equally essential for businesses that are run with tangible assets. Whether you own or lease your business, the investment in furniture, equipment, inventory and machinery and technology within a retail or office space can be substantial. Covered by property insurance, it protects you from damages from theft, fire, vandalism and a variety of natural disasters. The thousands of dollars’ worth of inventory lost due to a burst pipe, or the equipment stolen in a break-in which can halt the operation of a business for weeks can be recuperated without you being liable for the cost.”
Professional Liability Insurance. Also known as Errors and Omissions, or E&O coverage. “For service and knowledge-based companies this insurance may actually be the most critical of all. This insurance is designed to cover you in the event of claims arising out of allegations of negligence, error, or failure to perform one’s professional duty. Lawyers, consultants, architects, accountants, and healthcare providers will commonly maintain E&O coverage as a normal course of practice. There are often instances in which even the most professional and well-intentioned individuals can face lawsuits that result from dissatisfactions in their work; you are financially and reputationally protected from these circumstances. “
Workers Compensation Insurance. “More than just good business practice, workers’ comp is legally required for most companies with employees. It provides medical expense payment to injured or ill workers and a portion of lost wages during the recovery period while protecting employers from lawsuits stemming from workplace injuries. Workers are entitled to appropriate treatment for injuries or illnesses that they sustain on the job and workers’ comp provides this service without delay or costly legal fees”.
Hannover Re Announces Succession Plan for CEO
Global reinsurer Hannover Re has been in the headlines for successfully orchestrating a well thought out succession strategy in their CEO role. The change, in which Jean-Jacques Henchoz will give up his post and be replaced by leaders positioned to guide the company through an ever-changing insurance world, comes with assurances of commitment to the client and partner relationships the company is so known for, as well as promises of innovative new strategic direction. In response, investors have looked favorable upon the early and calculated transition, noting its indication of maturity and planning. For any large insurer, it just goes to show that succession planning, when done right, should not only prevent chaos, but lead to new heights of stability.
Marsh Names Cyber Coverage Leader for the U.S. and Canada
Digital risk is growing in complexity; in October, Marsh, the world’s largest risk advisor and broker, hired its first full-time leader for the company’s U.S. And Canada cyber coverage practice. This individual’s extensive expertise spans both the technology and insurance industries, enabling them to craft coverage that spans the entire gamut of cyber threats – from ransomware to data breaches and social engineering fraud. The firm combines the act of putting coverage in place that help clients restore themselves as quickly as possible post-breach with guidance on how clients can minimize risk proactively before an attack occurs. This demonstrates that cyber risk is not something that should concern only tech companies, but industries like healthcare, financial services, manufacturing, and retail are also facing these dangers, and the presence of such expert leadership at a brokerage like Marsh ensures clients receive the most appropriate, current advice possible.
Insurance Company Defends Construction Defect Suit
Recent case decision has far reached ramifications for construction industry, where an insurer had no duty to defend a construction defect claim. The court decided the insurer was not required to defend, due to specific language in the policy excluding certain things from the insurance. The court held there was not coverage and a good lesson for contractors and builders is to remember that an insurance policy is a contract and the coverages it provides are definite-assumptions about what an insurance policy covers can be very expensive lessons to learn in the legal system. There are many causes for a construction defect claim including bad work, poor quality materials, design error or installation errors. There is no replacement for closely scrutinizing your policy, asking detailed questions about exclusions, and purchasing additional coverage where necessary to avoid costly legal problems.
Specialty Insurer Fortegra Raises $150 Million
Specialty insurer Fortegra just closed on a capital raise of $150 million; this news is a milestone for the company, and indicates a strong investor commitment to the specialty insurance market. Fortegra says the new capital will be used to strengthen its underwriting and product innovation for niche segments that traditional carriers often avoid (i.e. Warranty programs or unique commercial lines). This fundraise also indicates a trend in the insurance market, that investors are targeting nimble, technologically adept specialty providers that leverage data analytics and real-time risk modeling to quote rates more accurately than traditional insurers. This news is good news for companies looking to gain proper coverage after being unable to find appropriate solutions through standard markets.
Michigan Amends Compensation Laws Regarding Disability and Death
Businesses and HR departments based in Michigan should monitor changes that may be enacted regarding workers compensation laws. These changes are regarding compensation for disabled individuals as well as for their death, as the legislature is proposing new benefits for disabled workers and their families. Any changes to workers compensation law could have a positive or negative effect on a business owner, which could in turn increase or decrease the cost of insurance. Businesses must be informed on this issue and amend their coverage as necessary to ensure their legal and financial protection in case of a workforce related incident.
Insurance is simply much more than a compliance issue, and any owner will attest that it’s one of the best investments in the stability of the company. From preventing property and general liability issues and the defenses required in professional liability lawsuits to supporting injured workers and preventing damages from new cyber threats; a sound insurance policy gives owners the peace of mind required to handle unpredictable situations with a realistic outlook.
