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5 Coverages You Probably Don’t Have

By September 2, 2020March 23rd, 2021Business Insurance, Insurance
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The purpose of having insurance, no matter the type, is to safeguard you, your family, your business, and your assets from unexpected events. We know life can throw us a plot twist or two. It is important to have proper protection implemented before said plot twists cause significant destruction, financial or otherwise. But when you look at the menu of insurance options, it can be difficult to determine what types of insurance coverages are right for you.

Many people are familiar with the basics-home insurance, auto insurance, life insurance, business insurance, renter’s insurance, etc. However, these are five types of insurance coverages that you probably do not have, but should certainly consider.

Cyber Insurance

Cyber insurance is more important for individual and business security now than it has ever been before. With the massive surge of people in the United States workforce working from home, cyber attacks have become more prevalent, and the fraudsters who are responsible for these crimes do not leave any industries untouched. A successful cyber attack has the potential to financially obliterate those who fall victim. In fact, it has been estimated that malevolent cyber activity in the United States cost the country between $57 billion and $109 billion in 2016, and over the last 5 years, organizations have seen a 67% increase in cyber crime.

Investing in cyber insurance is essential for building cyber resilience and protecting your investments. Most cyber insurance providers offer access to IT specialists, expert consultants, risk management tools, and even cyber incident response teams who will provide you with immediate assistance if your network has been breached. For more information regarding cyber defense, please see our article Cyber Defense in the Midst of Covid-19.

Commercial Umbrella Insurance

If your company is ever found to be in a litigious pickle, commercial umbrella insurance will provide an extra layer of liability coverage when your general liability coverage becomes exhausted. Commercial umbrella insurance would protect your company against costs incurred by:

  • Libel
  • Reputation damage
  • Vehicular Accidents
  • Customer Injury
  • Product liability

How does commercial umbrella insurance work? Glad you asked!

Your general liability coverage covers costs if a claim is filed against you or your company regarding bodily injury or property damage resulting from your company’s products, services, or operations. However, say the cost of the claim racks up to $2 million, but your general liability insurance only covers $1.5 million-that is when your commercial umbrella insurance would kick in. Your commercial umbrella insurance would activate to cover the remaining $500,000 that you are responsible for, saving you that astronomical out of pocket cost.

We strongly recommend that businesses with higher risk exposure (businesses owning commercial property that is open to the public, or companies that do business on other people’s property) explore a commercial umbrella insurance policy. However, all businesses can effectively benefit from the additional protection that commercial umbrella insurance offers.

Business Income and Extra Expense Insurance

Business income and extra expense insurance (also known as business interruption coverage) is monetary protection against a loss of income or profits that your company may experience due to property damage caused by a fire, a natural disaster, theft, or vandalism. To be clear – business income and extra expense insurance does not cover the money needed to repair or replace a building or equipment. That is what a typical property policy will pay for. Business income and extra expense insurance helps to replace your income and expenses while your business is recovering from a covered loss.

For example, let’s say you receive a dreaded phone call in the middle of the night letting you know that your storefront has gone up in flames. The aforementioned property policy that you have will swoop in and pay for building repairs, equipment replacement, etc. But what about the less obvious costs that you would still be responsible for? How will you pay rent when your business is closed and the flow of income is interrupted? What about your staff-how will you pay them?

That is what business income and extra expense insurance will handle. While your storefront is renovated, your rent payment will be paid, your payroll will be distributed, and your taxes and other bills will be handled. Some business policies even provide additional protection like extended business income coverage. This provision replaces monetary losses incurred while your business is not running, as well as losses encountered due to potential damage to your key suppliers.

Employment Practices Liability Insurance

It is not uncommon for employers to be sued by employees when the employees feel that their legal rights have been violated. Employment practices liability insurance serves to protect employers from incoming lawsuits relating to discrimination (sex, race, age, disability, etc.), wrongful termination, harassment, and other employment related issues like a failure to promote.

Without employment practices liability insurance, the damage that a wrongful employment practice lawsuit would cause could be irreparable. Your business could suffer a significant financial loss, declines in company morale and a ruined reputation. And that’s before you even make it into the court room. Once you do, defending an employment lawsuit could cost your business anywhere between $75k-$125k.

Larger companies have the tools to handle any lawsuit that may come their way. On the other hand, small businesses usually do not have concrete policies and procedures for hiring and firing. This can expose them to wrongful employment practice risks. Regardless if your company is big or small, obtaining employment practices liability insurance is just good business.

Employee Dishonesty Insurance

If you’ve hired an employee who acted dishonestly, you know the importance of this type of insurance. This insurance is a crime coverage that provide funds to recover revenue and/or inventory stolen by an employee (or employees.) To be more specific, the following is a list of employee actions that could fall under a standard employee dishonesty insurance policy:

  • Safe burglaries
  • Embezzlement
  • Forgery
  • Computer fraud (i.e., hacking, using a computer to get customer information)
  • Credit card fraud
  • Counterfeiting
  • Tampering with checks
  • Shoplifting
  • Fake invoices and receipts
  • Theft

You can even find policies that include coverage to protect your business against the actions of:

  • Directors and Officers
  • Current employees
  • Seasonal employees
  • Former employees
  • Independent contractors
  • Members
  • Partners
  • Trustees
  • Volunteers

Hopefully, your business never claims lost revenue from immoral behavior, but it never hurts to be prepared.

We at Camargo would love to chat with you about your insurance needs – call us today! Prioritize protection to guarantee financial security with an insurance policy – one of the best protections money can buy.