Let’s take a look at some of the basic coverages you need as part of a business owners policy.
Business owners never stop moving. From before business hours to well after you’ve closed your doors for the day, as a business owner you are always on the go. Dealing with the everyday tasks of running your business while thinking ahead for the future success of your company is just a part of what you do.
Whether you run a restaurant, clothing store, accounting firm, etc., your small- to medium-sized business requires you to be in constant communication with staff, clients, vendors, the bank… the list is endless.
The last thing you need is the nagging worry of protecting your business in the back of your mind. There’s any number of situations that could close your business down. That’s why at ALIGNED, our business owners policies are put together by business experts. We’ve been packaging commercial insurance policies for businesses of all sizes and across all industries for years.
What’s in a Business Owners Policy?
It’s important to note that not every business owners policy is the same because not every business is the same. However, the following coverages are usually standard for every business.
Commercial Property Insurance
Yes, it’s good to think positively but unforeseen events happen every day. Fires, explosions, floods, severe weather, vandalism, burglary, etc., are a part of life. Making sure your business is covered in case of damage caused by one of these perils is the first step in protecting your business. We all know the importance of having home insurance and your business is no different. Protecting your business against the worst-case scenario is an essential duty for every business owner. That’s why commercial property insurance is usually standard in a business owners policy.
Business Interruption Insurance
This goes hand-in-hand with property insurance in a business owner’s policy. If your business is unfortunate enough to experience a disaster, business interruption cover helps you weather the storm until you’re up and running again. Expenses like rent, utilities, payroll – all your monthly expenses still need to be paid. If you’re closed down for repairs, the income you rely on to pay those bills has now dried up, leaving you with mounting bills that could set you back months before you can get on top of them. Business Interruption insurance provides you with the income you would’ve been earning if you were still open for business, helping you manage your expenses until your building is completely safe to re-open.
Business interruption coverage as part of a business owners policy can either cover you until your repairs are done or until your income is back to pre-disaster levels.
Every business owner’s nightmare: someone is injured on his/her property or by his/her product or service. It’s more than just the bad publicity that gets amplified on social media, although that can be enough to ruin a business on its own. It’s also the terrifying prospect of facing a lawsuit. The legal costs alone could drain you of your savings. And if the case settles or a judgement is made against you, the costs could be devastating. General liability, as part of a business owners policy, protects you in case:
- Someone is injured on your property
- Your product(s) or service injures someone
- Someone’s property is damaged through your business operations
Other Coverages You May Need in Your Business Owners Policy
It’s more likely than not you will need other coverages to bullet-proof your business. Again, every business has its own business practices, which opens it up to its own set of unique risks. The following are the more common additional coverages that businesses in several industries need.
Extra Expense Insurance
This kind of coverage could be necessary as part of your business interruption policy. While the BI policy will help you with your bills, extra expense coverage is for businesses who simply can’t close. If you run a(n)
- Essential service like a medical clinic, grocery store, pharmacy
- Continuous service like a customer support centre, or
- A location-dependent business like a manufacturer or a retailer
- Service based businesses that new short term services, space, equipment etc.
then extra expense insurance coverage should be included in your business owners policy. The reason? You will need more money to offset the extra costs of keeping your business running. Those costs could include:
- Moving expenses
- Renting/leasing costs of a new location
- Buying or renting new equipment
- Extra payroll for overtime or temporary staff as needed
Does your company need to stay open at all costs? Make sure extra expense insurance is included in your business owners policy.
Cyber Liability Insurance
It doesn’t matter if you install drywall or run a mechanic’s shop. Practically every business these days uses at least one computer in its daily operations and/or has a website. Depending on how much you rely on digital devices for your business operations, cyber liability coverage may be a necessity.
Did you know? 1 in 5 Canadian businesses fell victim to cybercrime last year. 60% of them were small- and medium-sized businesses. 1
Cyber liability coverage included in your business owners policy can help you with the added costs to:
- Restore data
- Repair hardware and/or software
- Notify customers if their data was breached
- Other costs stemming from viruses, phishing scams, DOS attacks, etc.
Professional Liability or Errors and Omissions Insurance
If you operate any type of professional or advisory service like a law firm or accounting services, this type of coverage may not be optional. Everyone makes mistakes and sometimes those mistakes cost. A lot. If your service company’s error causes a client to suffer major losses, they may have no choice but to sue. Professional liability or E & O insurance included in a business owners policy will help you defend yourself – and protect your business.
The ALIGNED Advantage
Absolutely, there are a lot of insurance products out there for small- and medium-sized businesses. That’s why you need a business expert to help you put together a business owners policy that fills all the gaps. Our ALIGNED Advocates are those business experts – we know how to tailor your business owners policy for your specific coverage needs. And the best part? Bundling all those coverages into a comprehensive business owners policy is generally cheaper than buying each policy one-by-one.
To make sure you get the ideal coverage at the best price, contact one of our ALIGNED business insurance experts.
Source: 1 https://www.publicsafety.gc.ca/cnt/rsrcs/pblctns/2019-r006/index-en.aspx