If you are like most business owners, when establishing your company, you need to be cautious with your expenses. Being frugal can mean the difference between making it and going under. So, it is understandable when business owners choose to purchase the required insurance coverages first. Some are statutory, like Workers Compensation and Auto. Other coverages, such as General Liability and Property, can be required by third parties like vendors, the bank, or your landlord. I can’t argue the logic behind these decisions, however, there are additional coverages that should be considered. Your budget will determine if it is cost prohibitive to purchase, however, there is no question that you should make an educated business decision by understanding the risks that your business faces, the financial repercussions of an adverse occurrence, and the premium associated with transferring this risk.
Business Insurance for Growth will outline a few coverages that often go overlooked and are important components of a mature insurance program.
Employment Practices Liability
All employers are subject to laws regarding employment practices. Whether real or perceived, intentional or unintentional, employers are being sued by employees for wrongdoing at a significantly increased rate as compared to prior years and, even if the lawsuits are won by the employer, the expenses are typically significant. Don’t think that you are safe, just because your are a “small-business” as around 40% of these types of lawsuits are brought against companies with less than 100 employees. Some occurrences can seem insignificant at the time, such as the unpaid internship, and others can bring immediate action. The Employment Practices Liability (EPL) policy can include coverage for Wrongful Termination, Harassment, Discrimination, and Breach of Contract, among others. Some policies are also offering a defense limit for Wage and Hour claims.
Cyber / Privacy Liability
More and more companies are storing sensitive and personally identifiable information online. This information can include social security numbers, credit card numbers, or other aggregated personal information, not available elsewhere. As this information continues to become more valuable, those with the means are being more creative in developing ways to obtain these records, either by hacking into computer systems or taking advantage of opportunities afforded to them. Thirty five states, plus the District of Colombia have enacted laws requiring businesses to provide notice of security breaches related to personal information. Florida’s statute requires any person who conducts business in the state to provide notice of breach to any resident of this state whose personal information was reasonably believed to have been acquired by an unauthorized person, or be subject to significant fines. The Cyber Liability policy can cover a business’ third party liability as a result of a data breach and related first party expenses. For additional information about recent data breaches and resources, visit PrivacyRights.org.
Hired and Non-Owned Auto Liability
Even if your business doesn’t own a vehicle, it is not a stretch to say that the business probably makes use of available vehicles at some point. The vehicles can be rented by your company or owned by a third party, such as an employee, for the purpose of running errands. If an accident occurs, the business can be held liable and sued for damages. The employee’s personal insurance would typically be considered primary in such an occurrence, however, if their limits are insufficient, the company would have an exposure. The Hired and Non-Owned Auto Liability policy will often cover bodily injury, property damage, and defense costs that your company is liable for.
We will continue to discuss coverages and endorsements that are often overlooked in hopes of helping you make an educated decision about your own insurance program. As part of our risk assessment, we determine what we believe is right for your business and help you understand the related costs. Please feel free to contact Biscayne Risk & Insurance Group with any questions that you have.