Most small and mid-sized businesses are aware of the importance of having business insurance but often simply opt for general property and liability insurance and call it a day. While these policies cover most of the basics, there may be gaps in your insurance that can leave your business exposed to risk and financial loss.
Here are some of the most common gaps we see in business coverage and an overview of more specialised policies and endorsements that may help you protect your business, and help your business recover after a covered loss. Keep in mind that individual policies can vary widely, so it’s always important to review your coverage options with your agent or broker.
1. Am I covered as a Director & Officer or if an employee sues my business?
As an employer, you know that there are certain rules and regulations you need to follow for how you treat your employees, and what you can reasonably expect from them. These days, with more people working from home, and added health and safety considerations for those in the workplace, it can be more difficult than ever to know exactly the right approach — potentially increasing the risk of an employee suing, based on claims of:
Company management is also at risk — directors and officers can be personally sued by employees , vendors, competitors, investors, customers, or other parties, for actual or alleged wrongful acts in managing the company.
Consult your insurance agent or broker about adding these coverages to help close potential gaps:
2. Is my business covered if it’s sued by a customer for professional negligence?
If you provide professional services, there is a chance that a customer may claim you failed to complete the services in a satisfactory manner, made a mistake, or provided incorrect information that resulted in a financial loss for them. While you’d hope that you could work things out amicably, that’s not always the case. If your business is sued by a customer for either actual or alleged financial damage, appropriate professional errors and omissions insurance may help cover the costs.
Consider adding Professional Indemnity Insurance to help protect against claims directly related to your professional services.
3. If my business is damaged by a fire or break-in and must close temporarily, are my operating expenses insured?
If your business suffers a physical loss (following a covered property loss) and you need to close part or all of your operations, you may lose revenue, plus could incur additional expenses, such as:
To cover this potential gap following a covered property loss, ask your insurance representative about adding business interruption coverage to your property policy.
4. Am I covered if one of my employees accidentally exposes my company’s computer system to cybersecurity breaches?
You may have heard about data breaches or cyberattacks on large companies. But cybercriminals are not focusing solely on big money. They are looking for vulnerabilities, and small and mid-sized businesses who use outside IT services or have limited IT resources may be more exposed than they realise. If you have employees, your risk is even higher, because each employee is another potential gateway for cybercriminals to try and get through.
Consider procuring a commercial cyber policy to help provide solutions and services for privacy breaches, network security, incident response, and media liability.
5. Is my business covered if my employees are injured while they are overseas?
If you or your employees travel abroad as part of your business, you may want to make sure you have appropriate coverage that extends beyond your country borders. For example, how could you help an employee who had a medical emergency while outside the country, lost a passport, or needed to get out of a country due to a political uprising?
To help cover this potential gap, consider business accident insurance to provide resources for international travel, including emergency medical, cash and document replacement, local country reports and travel alerts, and more.
Regardless of the type of business you run, it is smart to talk to your independent insurance agent or broker to make sure your business is appropriately insured so that you can focus on keeping your business running smoothly under all circumstances.
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