Many things can go wrong in a business. From damage to property and theft to data breaches, the costs can add up quickly. While choosing a proper business structure can protect personal assets in some scenarios, the right insurance is necessary to reduce risks and provide coverage for situations you can’t prevent.
Property insurance is a type of business insurance Newark, DE, that covers a company’s physical assets. This includes items like equipment, office furniture, and inventory. It can be used to cover the cost of replacing these items after they are stolen or damaged. It also can pay out for lost income if the business cannot operate due to damage to its property. This type of insurance can be combined with other types of business insurance, including liability and workers’ compensation. Business owners need to evaluate their needs and liabilities to develop a combination of policies that will protect them. A reputable insurance broker can help them determine the best coverage options. At a minimum, businesses should consider workers’ compensation, general liability, and auto insurance. Bundling these policies can often save money. In addition, premiums for these policies are usually tax-deductible. However, it is essential to remember that these policies only cover some things.
The primary purpose of business insurance is to cover businesses against situations that are out of their control. Natural disasters, theft, and even pandemics can financially weaken a company. But, if the right insurance policies cover companies, they can rest assured that their assets and financial investments are safe. In addition to property insurance, liability insurance covers lawsuits and other legal costs. It also pays for damages caused by work-related accidents or mistakes. Professional liability insurance is another necessary type of insurance for businesses, which protects the company from losses incurred by directors and senior management. Many different types of business insurance are available, and the best policy for your company will depend on your industry and risk profile. However, some essential coverages include commercial property, general liability, and business interruption insurance. Some insurers offer a small business owner policy (BOP) that combines all these coverages into one package.
Business interruption insurance, also called extra expense or business income coverage, pays for a period you might be out of commission after your property sustains damage. This is an essential element of any commercial property policy, as it can help you rebuild your company and resume operations after a disaster. Business Interruption coverage can cover your continuing average business expenses and the profits you would have made if your business had not been interrupted. This type of coverage is typically included in a commercial package policy or may be purchased separately. Most of the policies reviewed by LDI require direct physical damage to trigger the business interruption portion of the policy, and most exclude losses due to viruses. That said, it is worth examining your policy and contacting your agent to determine whether or not you have adequate coverage. This is a critical consideration given the COVID-19 pandemic.
In a time when employee theft and fraud have been increasing, all businesses should consider purchasing a crime policy with specialized employee dishonesty coverage. Also known as fidelity bonds, these policies protect against internal losses due to the adverse actions of employees and are specifically designed to indemnify companies for loss of inventory, revenue, and money from acts of dishonesty or negligence. Often included in commercial crime policies or offered by stand-alone crime insurance policies, these policies cover forgery, alteration, unauthorized electronic funds transfers, credit card fraud, counterfeit fraud, and more. These policies typically cover small business owners, trustees, directors, members, partners, and permanent employees. However, be aware that some policies have a discovery base, meaning the loss must be discovered within a specific period to be paid. Also, this coverage may not include acts of theft from vendors or customers or damage caused by a customer. Errors or omissions from accounting or calculations should be covered.