Business Insurance

Business insurance is frequently a necessity, not an option.  As a business owner, you will have many choices, some far better than others. Becoming an educated business consumer about insurance will pay big dividends.   Buying business insurance is among the best ways to prepare for the unexpected. Without proper protection, misfortunes such as the death of a partner or key employee, embezzlement, a lawsuit, or a natural disaster could spell the end of a thriving operation.

Ranging from indispensable worker's compensation insurance to the relatively obscure executive kidnapping coverage, insurance is available for nearly any business risk. Considering the multitude of available options, business owners must carefully weigh whether the cost of certain premiums will justify the coverage for a given risk.

General Liability

Many business owners buy general liability or umbrella liability insurance to cover legal hassles due to claims of negligence. These help protect against payments as the result of bodily injury or property damage, medical expenses, the cost of defending lawsuits, and settlement bonds or judgments required during an appeal procedure.

Errors & Omissions (E&O)

Errors & Omissions (E & O) Professional Liability insurance is purchased by companies to protect against the costly litigation that could arise from claims alleging negligence or inadequacy in the performance of their professional services. Any individual, partnership or corporation providing professional services can be exposed to liability as a result of any negligence in providing these services. E&O coverage also protects the mistakes of employees and Independent Contractors the firm may hire.  This coverage is not provided in Commercial General Liability (CGL) which primarily responds to property damage and bodily injury claims.  There are hundreds of forms of E&O insurance based on the type of industry or service you provide. Some policies are written based on specified professions such as:

• Accountants
• Architects & Engineers
• Associations
• Bankers
• Doctors
• Insurance Agents and Brokers
• Lawyers

There are a host of other businesses outside of traditional Errors & Omissions exposures that provide professional services to others. These would be considered Miscellaneous Professional Liability and there may be broader forms available for certain industry groups. Some examples are:

• Media: Broadcasters, Advertisers, Music/Entertainment, TV/Film producers
• Management Consultants
• E-Commerce
• Technology/Software providers or developers
• Advertising and Publishing Errors and Omissions
• Property Managers
• Technology Errors and Omissions Liability Coverage is Errors and Omissions Liability Coverage specifically designed for technology companies.

Product Liability

Every product is capable of personal injury or property damage. Companies that manufacture, wholesale, distribute, and retail a product may be liable for its safety. Additionally, every service rendered may be capable of personal injury or property damage. Businesses are considered liable for negligence, breach of an express or implied warranty, defective products, and defective warnings or instructions.

Home-Based Business Insurance

Contrary to popular belief, homeowners' insurance policies do not generally cover home-based business losses. Commonly needed insurance areas for home-based businesses include business property, professional liability, personal and advertising injury, loss of business data, crime and theft, and disability.

Internet Business Insurance

Web-based businesses may wish to look into specialized insurance that covers liability for damage done by hackers and viruses. In addition, e-insurance often covers specialized online activities, including lawsuits resulting from meta tag abuse, banner advertising, or electronic copyright infringement.

Worker's Compensation

Required in every state except Texas, worker’s compensation insurance pays for employees' medical expenses and missed wages if injured while working. The amount of insurance employers must carry, rate of payment, and what types of employees must be carried varies depending on the state . In most cases, business owners, independent contractors, domestic employees in private homes, farm workers, and unpaid volunteers are exempt.

Criminal Insurance

No matter how tight security is in your workplace, theft and malicious damage are always possibilities. While the dangers associated with hacking, vandalism, and general theft are obvious, employee embezzlement is more common than most business owners think. Criminal insurance and employee bonds can provide protection against losses in most criminal areas.

Business Interruption Insurance

Some businesses may wish to acquire insurance that covers losses during natural disasters, fires, and other catastrophes that may cause the operation to shut down for a significant amount of time.

Key Person Insurance

Keyman insurance is an important form of business insurance. There is no legal definition for Keyman Insurance, although in general, it can be described as an insurance policy taken out by a business to compensate that business for financial losses that would arise from the death or extended incapacity of the member of the business specified on the policy. The policy’s term does not extend beyond the period of the key person’s usefulness to the business. The aim is to compensate the business for losses and facilitate business continuity. Keyman Insurance does not indemnify the actual losses incurred but compensates with a fixed monetary sum as specified on the insurance policy.  A Keyman can be anyone directly associated with the business whose loss can cause financial strain to the business. For example, they could be: a Director of a company, a Partner, key sales people, key project managers and people with specific skills or knowledge which is especially valuable to the company.  There are four categories of loss for which Keyman Insurance can provide compensation:

1. Losses related to the extended period when a key person is unable to work, to provide temporary personnel and, if necessary to finance the recruitment and training of a replacement.
2. Insurance to protect profits. For example, offsetting lost income from lost sales, losses resulting from the delay or cancellation of any business project that the key person was involved in, loss of opportunity to expand, loss of specialised skills or knowledge.
3. Insurance to protect shareholders or partnership interests. Typically this is insurance to enable shareholdings or partnership interests to be purchased by existing shareholders or partners.
4. Insurance for anyone involved in guaranteeing businesses loans or banking facilities. The value of insurance cover is arranged to equal the value of the guarantee given by the key person.

Malpractice Insurance

Some licensed professionals need protection against payments as the result of bodily injury or property damage, medical expenses, the cost of defending lawsuits, investigations and settlements, and bonds or judgments required during an appeal procedure.