Business insurance helps protect businesses from financial losses caused by risks to their property and income. Covered risks can include things like theft, damage, and lawsuits. Insurance for businesses, also known as commercial insurance, can even cover injured workers’ lost wages and provide access to programs to help them get back to work. Commercial insurance policies also help protect businesses from financial losses resulting from liability claims.
Why Do I Need Business Insurance?
Businesses need business insurance for many reasons. One reason is that in the U.S., most states require certain coverages in order for a business to operate there. This usually includes workers’ compensation, unemployment insurance and disability insurance. Insurance for business can also help cover the costs of legal claims made against a business.
Without liability insurance, a business that has to pay the costs of a claim or lawsuit out-of-pocket may not have the financial means to survive. Insurance for business can also protect businesses from the financial risks of property loss. The costs of repairing or replacing physical property after fire, theft, vandalism and more could be devastating without a commercial property insurance policy helping cover the costs. Without insurance, companies that incur costs as a result of common business exposures like: property damage; legal claims by third parties; and work-related employee illness and injury, may not be able to afford to stay in business.
What Business Insurance Do I Need?
Most businesses need at least commercial insurance, general liability and business income coverage to help protect their company’s property, income and financial assets. For small businesses, a business owner’s policy can provide all three coverages in a single policy.
Commercial property insurance – Most businesses own a substantial amount of physical property. This property may include one or multiple locations as well as tools, computers, inventory and even accounts receivable. Commercial property insurance can help cover the loss of these assets if they are damaged or destroyed by a covered event.
General liability insurance – No matter how cautious business owners are, accidents can happen. For example, a customer may accidentally get hurt in a company’s store, or employees may accidentally damage customer property while working on-site. Liability insurance can help protect businesses from the risk of liability claims such as bodily injury, property damage or even advertising mistakes.
Business income insurance – Businesses rely on many types of property to function and generate income. If a business owner must suspend operations due to a covered loss like a fire or theft, business income insurance can help replace income lost as a result. This can help them continue to meet obligations like payroll and rent.
Depending on your industry and the nature of your operation, you can customize coverage to help address unique risks by choosing from a broad variety of additional commercial coverages. Beyond the standard coverages, Thruway Insurance also offers many other types of insurance for businesses – each designed to help protect businesses against a specific exposure they face.
Types of Business Insurance
The types of business insurance coverages that most businesses start with include general liability (GL), commercial property, and business income insurance. Workers’ compensation insurance is usually needed if you have employees. General liability helps cover the costs if your business is responsible for damages to a third party, property insurance helps cover costs of damage to your premises and other physical assets. Business income insurance helps replace lost income if your business is forced to shut down due to a covered loss and Workers’ Comp helps cover employees who suffer a work-related injury or illness.
Your business is unique and deserves an insurance solution appropriate to the specific risks you face. That’s why Thruway Insurance offers a wide range of commercial insurance coverages so you can customize your insurance with the right combination of policies and endorsements to address your unique needs. Some popular coverages include:
Data breach insurance – Most businesses are at risk of data breaches. Data breach coverage can help cover the costs of responding to and managing a data breach. With data breach coverage from Thruway Insurance, businesses can even access support services to assist them in creating policies and best practices that help prevent breaches from happening in the first place.
Workers’ compensation – In the event that an employee suffers from a workplace injury or illness, workers’ compensation insurance from Thruway Insurance can help pay for the associated medical expenses as well as compensate the employee for lost wages while they are recovering from a work-related injury or illness. If you have employees, many states require this coverage.
Does General Liability Insurance Cover All of Your Company’s Needs?
Based on its name alone, you might assume that general liability insurance is a catch-all policy that covers all of your business’s needs. However, this is far from the case. Although liability coverage is undeniably useful, certain types of specialized risks require dedicated insurance coverage.
By offering specific forms of coverages separately, insurance companies allow business owners to buy only the protection they need and avoid the expense of unnecessary insurance products. Depending on your situation, you may need to purchase several types of coverage to fully protect yourself and your company’s assets. In some cases, general liability insurance may not be necessary at all; you may do better with a different type of policy. Understanding your options will help you make the right choice for your business insurance needs.
Who Needs General Liability Insurance?
Liability insurance protects your business from litigation in the event that someone decides to sue you. Businesses require protection of this kind because they can be an attractive target for lawsuits. Depending on the type of business you have, you may be at higher risk of litigation as a result of what your company handles.
Many common scenarios could result in litigation:
– A customer falling on a slippery floor in your shop, injuring a hip
– Accidentally causing damage to a customer’s property while you are performing your services
– An employee bad-mouthing a client in a way that could be viewed as slander
For these and many other circumstances, liability insurance can provide financial compensation to the injured party while keeping you out of court.
If you are not sure whether your business needs general liability insurance, ask yourself a few questions:
– Do customers or clients come to your premises?
– Do you have contractors or employees working at your location?
– Do employees go out to work on-site on your behalf?
– Do you have access to property belonging to your clients or customers?
If the answer to any of the above questions is “yes,” then you should consider protecting your business with general liability insurance. However, don’t assume that this coverage will take care of all your protection needs.
General Liability Insurance Limits
It is important to remember that liability insurance does not protect your own property, and it does not generally cover claims from your employees. It exists solely to protect your company from lawsuits.
For example, consider a scenario where an employee is performing cleaning services at a customer’s residence and accidently drops an expensive vase, moves furniture and causes scratches to the hardwood floor, or causes a slip and fall by not drying the floor thoroughly.
The damage to the vase/floor/injuries will be covered by your liability insurance. Because situations like these could happen to any business, it is a good idea to think about the potential risks you face during the workday and buy coverage accordingly.
Supplemental Insurance Products for Your Business
The business insurance products you require will vary depending on the type of business you run. For example, a home-based office for a graphic designer would have very different needs from a retail store with multiple employees and a stock room.
In many states, it is required by law to carry some form of workers’ compensation insurance to cover injuries sustained by your employees.
There are many other types of coverage you may wish to buy, such as:
– Errors and omissions: If you are a consultant or another type of expert, this coverage protects you in the event that a client gets poor results after following your advice.
– Commercial auto: If your company uses delivery trucks or any other kind of company vehicle, a commercial auto policy is a must-have.
– Employment practices liability: This specialty coverage protects your company from suits arising from workplace hostility, discrimination, sexual harassment and similar employee conduct issues.
– Medical malpractice: If you are a doctor or you operate in any FDA-regulated field, malpractice insurance can offer protection against patient claims.
Many other products are available as well for particular industries and specific needs that general liability doesn’t cover. For example, you may find that you require commercial excess liability insurance with higher limits than what a general liability policy offers. On the other hand, you may do just fine with a business owner’s policy, which couples general liability with basic property protection.
The best way to know whether you have the right insurance protection is to discuss your needs with a qualified agent. An insurance expert from a well-established business insurance company, like Thruway Insurance Brokers, can help you understand your needs and craft a policy that will protect your business without wasting money on unnecessary coverage. You can contact a representative or browse the Thruway Insurance Brokers website to learn more about the policies right for you.
Everything You Need to Know About Insurance Coverage Limits
Liability insurance exists to protect you and your business in the event that someone decides to sue your company. Instead of having to pay for damages from your own funds, liability insurance covers the costs of damages you’re responsible for causing.
In order to keep costs reasonable, your insurance company will set insurance limits of liability. The coverage limit by definition is the maximum amount that the insurance company will pay out for a single incident or claim. In general, higher limits will result in a more expensive policy. Therefore, it’s in every business owner’s best interest to balance risk and budget to choose the appropriate level of insurance coverage.
Balancing Cost and Coverage
Insurance rates are determined by assessing risk or the likelihood of a claim being filed, as well as the maximum amount that may be paid if such a claim were to be filed. In other words, if it’s likely that the insurance company will pay out a substantial settlement in the future, the premiums will be higher.
Whenever an incident maxes out your policy, you can be held liable for the difference. For example, if you are responsible for $2 million in damages but carry only $1 million in insurance, you may have to pay the other $1 million out of pocket.
As a business owner, this puts you in the position of deciding between taking a risk with low minimum insurance coverage or paying more per month for coverage with better protection. In most cases, a happy medium can be obtained that will balance your needs with your budget.
The minimum liability insurance you carry should be enough to cover the most likely scenarios your specific business could be involved in. High-risk environments are usually better suited to higher minimum liability insurance limits.
Common Types of Small Business Insurance Coverage
General liability insurance is one of the most common types of commercial liability policy that a business might need. It covers things like accidental customer injuries, electronic data loss and defense costs in the event of a lawsuit. It does not cover your own business property, professional services, employee injuries or intentionally malicious activity.
Policies sold by Thruway Insurance Brokers begin with limits as low as $300,000 and as high as $2 million. A common liability limit for this type of policy is $1 million.
Another very common type of commercial liability coverage is professional liability, or errors and omissions insurance. E&O policies are essential for service professions like consulting where clients may act on your professional advice.
Thruway Insurance Brokers E&O policies generally start with limits of $250,000 up to $2 million. The minimum insurance in New York is $500,000 due to state regulations.
The amount of insurance that you need depends on the type of business you have, the level of risk you anticipate, what you can afford to pay in premiums and how much you are willing or able to pay if your limits are exhausted by a single large incident.
Understanding your specific policy’s coverage limit definitions is vitally important as failing to do so could put you at risk of being underinsured. Commercial liability policies are generally sold with limits listed on the policy’s declarations page. When buying insurance, you will be able to choose the liability limit. The limit is the maximum amount that will be paid for any single incident regardless of how many people are involved in it. Liability claims are filed per incident rather than per lawsuit.
The finer points of limits of liability can become quite complex, and it’s important to have your specific policy explained to you by an expert who understands your needs and the details of the policy you’ve purchased. Whether you have commercial liability insurance already or you’re looking to invest in a policy, the commercial insurance professionals at Thruway Insurance Brokers can help you understand the best option for your needs, so reach out to them today
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What Type of Insurance Does Your Home Business Need
Do You Need Business Insurance If You Work from Home?
For many small business owners, working from home is a dream come true. However, this is a dream that comes with its own set of sometimes-unexpected problems and considerations. As an entrepreneur, some challenges – like needing to efficiently manage your own time and wear multiple hats – are probably already on your radar. What you might not realize though, is that your insurance needs change when you open and operate a business out of your home, potentially posing an unanticipated challenge.
If you operate a business out of your home, you should be aware that your homeowners policy may not offer you the protection that you need. In some cases, operating a business from your home can even violate the terms of homeowners insurance policy completely. Before you open your door to clients, you need to understand your legal obligations and plan accordingly to ensure that you, your business, and your clients are all properly protected with the right insurance policy in place.
What Does Home Insurance Cover?
Homeowners insurance is designed to protect your home against common risks like fire or vandalism. Insurance rates are calculated for your expected level of risk, which is based in part on the standard value of your home’s contents and the types of problems that most commonly affect homeowners. For this reason, home insurance may exclude or simply fail to cover anything that falls outside of the expected scope of a policy.
In general, homeowners insurance covers the structure of a home and its contents up to a specified limit. Depending on your policy, there may also be some liability protection in case someone slips and falls or is otherwise injured in your home. However, the coverage limits put in place by your home insurance may be too low to cover your business needs.
Working from home may affect your house insurance as well. If your insurance company does not know that you will be operating a home office, certain claims may be denied. Before starting a home business, you should always speak with your insurance company to determine how working from home might impact your insurance coverage
Where Home Insurance Falls Short?
Business equipment and inventory can be significantly more costly than typical home furnishings. The high-end electronics, specialized office equipment, and sales inventory that you require to keep your business running may exceed the value of your policy.
Even if your business does not deal heavily in physical goods or require expensive equipment, you will likely have valuable data and intangible property that are directly tied to your livelihood. If you lose income as a result of a catastrophic data loss occurring in your home office, your homeowners policy may not compensate you.
The increased range of potential liability issues your home faces when it transforms into a place of business may also pose a problem. Home liability coverage is primarily meant to cover the types of accidents that typically occur in domestic settings, like someone falling on your porch or being bitten by your dog. Issues of professional liability are not covered by this type of insurance.
For these problems and others that can arise when operating a home-based business, it is important to buy proper business insurance for your home-based office.
Home-based businesses are unique, and your needs as a business owner will reflect that. Fortunately, a variety of insurance products are available to overcome the specific challenges you may face. Before purchasing coverage, it is a good idea to review your options and build a policy based on the coverage and features you require.
If you’re a freelancer with no physical product and minimal equipment, you may not need extensive coverage. However, you should consider professional liability coverage, which can protect you from legal action taken by dissatisfied clients. Professional liability insurance protects your business if you are sued for negligently performing your services, even if you haven’t made a mistake. Such coverage should be a must-have for anyone who offers consulting or other professional services.
If you routinely have clients come to your home office, or you have any sort of in-house employees or staff, a more robust general liability policy may be a better choice for protecting your assets. These policies protect against bodily injury, property damage, data loss (in some cases) and reputation damage caused by employees.
In some cases, it may make the most sense to purchase a general use business owners policy (BOP) which offers a variety of coverages that are useful to businesses of all types. A BOP includes protection for your business equipment and office furniture. It also offers general liability protection for issues like bodily injury and damage to third-party property. Depending on the policy you choose, you may also be able to add coverage for profit disruption, which can help reimburse you for lost earnings when your business is interrupted by a covered event.
Thruway Insurance Brokers offers a number of specialty policies for businesses of any size and industry. You can browse our site to see what policies are available in your state, and to learn more about the business insurance options right for your home office.