Americans are extremely aware of the importance of insurance in their lives and businesses. According to a report by Deloitte, the Property & Casualty sector of the US insurance industry saw a 66% increase in value last year. Another report by the Insurance Information Institute reveals that all insurance and related activities contributed to about 2.9% of the GDP, equivalent to $630 billion in 2019. So yes, it won’t be wrong to say that insurance is indeed on every American’s mind along with other investments.
However, not all insurance coverage fits every specific need. It’s crucial to understand the benefits and limitations of insurance products to understand which ones will suit your requirements the best. For example, insurance products differ from one business to another based on their type, size, and what exactly they offer their customers. A company that sells/resells manufactured products will need insurance coverage mostly focused on the performance of their products, while service-oriented business owners will have quite different needs.
In this post, we’re going to look at the insurance considerations of the latter, i.e. the service-oriented companies.
Property insurance coverage
No matter what type of business you have, this coverage is essential for all. It helps protect the place that you run your business from (even if it’s your home) and its equipment from the risks of damage, like vandalism, fire, theft, smoke damage, etc. This insurance also includes business interruption coverage, in case there’s a loss of income for a period when your business is unable to run operations. If you provide services to your customers with the help of certain equipment, this insurance also covers those tools and equipment that are susceptible to damages. So, a home cleaning business may have extremely powerful vacuum cleaners that may need cover.
General Liability Insurance
This is extremely important for businesses that provide services to people. It acts as a defense against damages that you, as well as your servicemen, are held liable for. In simple terms, if any of your employees cause damage or injuries in the course of delivering the service, this insurance will cover the costs of that damage, as well as take care of medical and other expenses. This will also extend If your customer issues a lawsuit against you for the damage of goods or physical injury, it will also cover the costs of defense.
Commercial Auto Insurance
If the services you provide need a regular transport system, you should get the vehicle that you use for the same insured with commercial auto insurance cover. It aims to protect all the company’s vehicles that transport your employees, equipment, and work output. As yours is a service-oriented business, it’s possible you may not think of getting your vehicles insured. But you should, as it will reduce the risks of succumbing to unprecedented events. However, if you don’t own any of the vehicles that are used for business-related commute, you can get them insured through non-owned auto liability coverage to provide additional protection to your employees.
Professional liability insurance
Also known as the Errors and Omissions insurance, this coverage mainly protects your businesses against any kind of professional negligence or the improper rendering of services. Many a time, you may think that the general liability insurance that you have will cover against such issues, but this is not the case. The professional liability insurance is a separate coverage that you should buy to extend your defenses. Any type of service-oriented company, like a law firm, a digital marketing agency, an accounting business, an outsourcing agency, notaries, and even insurance agents can opt for this coverage to provide extended protection to their businesses.
Worker’s Compensation Insurance
Well, this insurance helps you cover the medical and wage replacement expenses of an employee if s/he gets injured on the job. Although the regulations and requirements to claim the insurance may differ from one state to another, the primary aim of this coverage is to protect the business owner from lawsuits brought by the injured employee. You tend to provide them with all the financial benefits in exchange for their right to raise a lawsuit in your name, thus avoiding legal complications later.
Data Breach Insurance
Whether you have a product-based or a service-oriented business, having an intellectual property is quite common in the digitized world of today. You may also need to store critical business information in your computers, or on the cloud. Such information is vulnerable to breaches and thefts. Here, the data breach insurance coverage will protect your business against such threats.
Some business owners may prefer to go for an all-encompassed business owner’s policy (BOP), which includes all the insurance packages that s/he may need to protect the company. Starting from property and liability coverages to automobile insurance and others, you can customize the packages according to your specific requirements. Talk to your insurance agency about your BOP or individual insurance coverage that you can opt for before you take any decision.