Many factors can affect the cost of business insurance. These include location, the type of work performed, and regulatory requirements for insurance coverage.
Growing a business often requires taking risks. However, fluctuating insurance premiums may discourage companies from pursuing innovative opportunities or exploring uncharted territory. This hesitancy can limit growth and limit competitiveness.
Coverage for Business Interruption
Keeping a business open during a shutdown can be incredibly expensive. Lost profits, paying non-exempt staff overtime, and even renting temporary space are all costs that add up quickly.
Fortunately, business interruption coverage exists to help protect businesses from these losses. This type of insurance is available as an add-on to most commercial property policies. It can also be purchased as a standalone policy.
Some business interruption policies come with contingent business interruption coverage as well. This is intended to cover losses caused by an interruption of the operations of a vendor or supplier on whom the insured company relies.
Many factors go into measuring these expenses, including consistency in accounting across multiple locations, mitigation capabilities, and current business trends. Working with a strategic risk advisor familiar with this process is essential. A professional can help prepare reports that insurers accept to maximize the value of a business interruption claim.
Coverage for Property Damage
Business insurance like Mountain Insurance covers various property damage and financial loss situations. It’s a good idea for every business owner to understand the company’s risks and purchase appropriate business policies.
Business or commercial property insurance protects a company’s on-site physical assets against specific causes of loss, such as fire, theft, and weather events. A typical policy covers a company’s building and all on-site equipment and furniture. It also typically provides a choice of actual cash value and replacement cost coverage. Existing cash value coverage pays out a claim based on the current cost of replacing a lost or damaged item minus depreciation for age and wear.
In addition to property damage coverage, a business owner can obtain general liability and business interruption insurance to cover other financial loss exposures. This coverage may pay for damages related to bodily injury, libel, slander, or lawsuit settlement bonds and judgments.
Coverage for Liability
Business owners purchase liability insurance to protect their financial assets, physical property, and intellectual ideas. Liability policies reimburse companies for damages or losses due to unforeseen events like natural disasters, burglary, and employee accidents.
A common type of business insurance is commercial general liability, which covers bodily injury and property damage to third parties. It may also cover lawsuits and expenses associated with data breaches. Other types of business insurance include commercial auto, which covers leased or owned vehicles; business interruption, which pays out for lost income; directors and officers (D&O) coverage, which protects company leaders against claims arising from decisions they make or actions they take; and professional liability insurance, which compensates firms for errors in their work.
The type of insurance a company needs will depend on its industry, location, and risk profile. It is recommended that companies explore all available policy options and reassess their coverage at each renewal.
Coverage for Cybersecurity
Cyber insurance is essential for businesses that store customer and business data, support electronic transactions, or operate online. Depending on the type of policy purchased, it may provide reimbursement for identifying and reporting a breach to affected parties, crisis management costs, and the expense of rebuilding cybersecurity infrastructure.
Insurance providers are more hesitant to write policies for organizations with poor cybersecurity controls, so having strategies and infrastructure in place that reduce risk can help enterprises qualify for coverage or pay less for their policies. This is one reason companies must use sound cyber hygiene before shopping around for a provider.
Often, cyber coverage can be added to existing property and general liability insurance policies to provide a more comprehensive solution for protecting against the financial impact of a cyber-attack. However, this coverage costs more than other types of insurance.