Published on 12.14.18
Why do you need business insurance?
You’ve worked hard to build your business but unexpected events can always arise that could jeopardize your future. Preparing in advance with proper business coverage can mitigate these risks and help you in a time of need. Here are some different kinds of business insurance that Foxquilt provides and why you would need them.
Commercial Property insurance coverages protect a company’s physical assets against loss or damage from a broad range of causes. If you own, lease or rent any building, unit, inventory, equipment, furniture or installed fixtures you may want to consider protecting your investment or your contractual obligations. Property of others that is in the care, custody and control of your business would also be covered which further protects your company.
Business Interruption or Business Income insurance is not a stand-alone coverage but rather, is an extension of business property insurance that can cover profits, fixed costs including ordinary payroll and extra expenses when a business property claim arises to cover the profits a company would have earned had the loss not occurred. This can be extremely important coverage for businesses of any size, as extra expenses can interrupt the ability for a business to continue servicing its customers and meet contractual obligations. Without this coverage extension, your business may have to permanently close if a claim arises.
Commercial General Liability
Commercial General Liability insurance, or CGL, provides protection against Bodily Injury and Property Damage, Personal and Advertising Injury, Medical Payments, Tenants Legal Liability and in some cases can include Employers Liability and Non-Owned Automobile Liability coverages as well. All companies including home-based businesses should be carrying a CGL policy as it covers defense and damages against a lawsuit if your products or services cause or are alleged to have caused bodily injury or property damage to others. You can’t predict or protect yourself from a lawsuit arising, litigation may be someone’s only option to eliminate their liability or cover their medical expenses. It also allows for peace of mind and credibility.
Umbrella and Excess
Umbrella and Excess liability policies are often a cost-effective tool to protect your business from the unexpected by increasing your coverage limits, in case your primary policy coverage limits are tapped out. It can also provide a drop down effect in some cases when primary coverage is excluded or when the aggregate limit has been used up.
Cyber Liability Insurance can provide coverage for cyber incident response costs, cybercrime including social engineering, cyber sextortion, network damage, system interruption and privacy liability. This coverage is increasingly important for any business that stores private or sensitive information about employees or clients in digital or paper format as cybercrime is on the rise, standard policies do not cover these risks and liability.
Errors and Omissions
Professional Liability, Malpractice or Errors and Omissions Insurance, commonly referred to as E&O, protects your company against claims arising from failure to provide the expected service level or financial loss from wrongful acts that would not be covered under the commercial general liability insurance. Business, IT and Medical professionals such as insurance brokers, freight forwarders, architects, engineers, lawyers, health care practitioners, developers, management consultants and other professional service providers can benefit from this kind of coverage.
Directors and Officers
Directors and Officers Liability insurance, often called D&O, provides coverage for a business and its corporate directors and officers (and their spouses) from lawsuits brought by customers, donors, shareholders, competitors, suppliers or other parties for the actual or alleged wrongful acts that arise out of managing a business. This coverage includes legal fees with the settlements, among other defense costs. This insurance is vital for any business looking to attract the best officers and directors as they regularly expect a standard “hold harmless” agreement. Private and public businesses or non-profit organizations with a board or advisory committee require this coverage as they all face litigation risk from bankruptcy, fraud, misuse of funds, errors in judgement and many other mismanagement claims. Defence costs alone can be overwhelming for an organization at any revenue level.
Trade Credit, Accounts Receivable or A/R insurance policies provides coverage against non-payments on open accounts or invoices – not just your typical accounts receivable records coverage included with business property policies. Any business with accounts receivable should consider this coverage as it can often provide access to better financial terms on loans, protection from sanctions on corrupt governments and other export risks tied to international business, and cash flow relief in the event of customer default or insolvency among value added services often provided such as collection and extensive credit checks.
Marine or Cargo insurance provides coverage against loss or damage caused to property while in transit. As the shipper you may be contractually responsible and even though you may think you can rely on carriers, buyers or sellers insurance policies for coverage, their policies often include limits and exclusions that may prevent the loss from being covered. Even if it is covered by one of their insurance policies, relying on that can easily ruin your reputation and revenue as these claims may take significant time and effort to handle. Not only will you be taken away from your business to deal with these issues, you may also lose a customer and/or vendor in the process. Marine or Cargo insurance policies can be rather cost effective for a business of any size as they can be administered on a shipment to shipment basis.
We’d love to learn a little more about you to help you find the right group for your business and to help you get the best insurance.