Eight insurance risks every business needs to consider

By Citizens Insurance

Eight insurance risks every business needs to consider
(Photo by Getty Images)

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While starting out with a business owner’s policy (BOP) or commercial package policy (CPP) is a good first step of coverage, it is only that — the first step. There are risks that business owners are oftentimes unaware of and require additional, specific coverage. read further to learn about each risk. 


1) PROFESSIONAL ERRORS


$20 billion


Amount small businesses pay out of pocket every year in liability costs*


Professional liability insurance provides protection for defense costs and settlement payments for claims that a firm's work or advice was inadequate, contained errors, or failed to meet specifications.


A YES to any of these questions means there may be risk that requires additional coverages.

  • Does the business require a professional certification or extensive training to practice?

  • Does the business provide a service or manufacture a product for customers?

  • Does the business provide advice to others?

* Institute for Legal Reform  (http://www.insuranceqna.com/liability-insurance/liability-lawsuits.html)


2) INTERNATIONAL BUSINESS


One of your employees becomes severely ill while on a business trip overseas, and needs to fly back to the U.S. on a private plane while accompanied by a medical professional. Will your business insurance cover these expenses?


An international policy can offer global coverage and protection for all facets of doing business outside of the U.S. Learn more about your international risk.


A YES to any of these questions means there may be risk that requires additional coverages. 

  • Does the business import raw goods for manufacturing and selling in the U.S.?

  • Does the business export goods or services outside the U.S.?

  • Do the business’ employees travel internationally? 

3) BUSINESS INTERRUPTION


25%


Percentage of businesses that never reopen after a major disaster.*


While many policies offer business income coverage, it oftentimes does not provide the right level of protection against water damage, vandalism, power loss, data breach, equipment breakdown, food contamination, and more. 


A YES to any of these questions means there may be risk that requires additional coverages. 

  • Can the business pay rent, salaries, and other fixed costs during a shutdown?

  • Can the business afford moving to a temporary location?

  • Can the business survive without income for an extended period of time?

*Institute for Business and Home Safety


4) LOSSES BEYOND LIMITS


$105 billion


Total liability costs for small business in one year.*


Commercial umbrella insurance provides an extra layer of liability protection by covering legal costs and settlements once other liability coverage limits have been reached.


A YES to any of these questions means there may be risk that requires additional coverages.

  • Does the business have contracts with vendors or clients that require expanded coverage?

  • Is the commercial property open to the public?

  • Do employees use their cars for business?

*U.S. Chamber Institute for Legal Reform


5) DISCRIMINATION AND HARASSMENT ALLEGATIONS


The median loss caused by the frauds in our study was $145,000.*


Employment practices liability coverage protects against claims brought by employees for wrongful employment acts based on termination, discrimination, workplace hostility, defamation, and more.


A YES to any of these questions means there may be risk that requires additional coverages. 

  • Does the business have employees?

  • Has the business terminated an employee in the past year?

  • Does the business offer leave to employees for illness or hardships?

*Association of Certified Fraud Examiners


6) CRIME


$155,000