Founder and CEO of ValChoice, bringing transparency to insurance.
With storms off the Gulf Coast, wildfires sparking in the West and floods and tornadoes in the central states, it’s always important to be prepared for what’s ahead. September marks National Preparedness Month (NPM), and the 2020 theme is “Disasters Don’t Wait. Make a Plan Today.” With the pandemic still impacting our daily lives, the NPM theme offers words to live by.
For business owners, the following are actions to take during NPM to make sure you and your business are prepared.
1. Review Your Insurance Company
Businesses and consumers alike outgrow insurance companies. Companies that sell on price may be a good fit for a 19-year-old driver or a startup business. However, as income and assets grow, your exposure increases.
What many consumers and business owners don’t realize is the price leader you originally chose as an insurer may no longer be a good fit. Independent of insurance type, make sure you buy insurance from a company that is focused on claims handling. Claims handling is measured in multiple ways: speed, fairness in the settlement amount and ease of doing business.
2. Business Interruption Insurance
Business interruption insurance is important. However, it can also be misleading. As many business owners learned in 2020, pandemics definitely interrupt business. Unfortunately, pandemics are also excluded from business interruption coverage.
Be sure to consider the types of events that could interrupt your ability to operate, and confirm those events are included in your business interruption insurance. And similar to what buyers of any type of insurance should do, be sure to work with only the best insurance companies.
At ValChoice, we help people seeking insurance to find the best options for their needs, so it’s important for us to work with only the best insurance companies. A commercial insurer, for example, re-rated general liability policies based on the significantly reduced business level for restaurants during the pandemic. In one example we know of, this saved a business owner more than 80% on their insurance.
While this is not a replacement for business interruption insurance, taking such action did make it possible for many businesses to continue operating once reopening was an option. And while this is an unusual occurrence, it’s a testimonial as to why buying from the best companies is important.
3. Liability Insurance
Business liability insurance is commonly known as general liability insurance. This coverage includes protection against claims that anyone associated with your business may have caused. The event that occurs could be on your own business property or somewhere else.
With business liability insurance, be sure to properly assess your liability risks. There are many risks that may be excluded and require specialty coverage. Examples of risks where specialty coverage may be required include:
• Cyber Liability
• Employment Practices Liability
• Fiduciary Liability
• Product Liability
• Professional Liability
Another example of when specialty coverage may be required is in the case of having a liability risk that’s greater than what the standard policy covers.
4. Workers Compensation Insurance
Workers’ compensation insurance protects your workers and their families when workers are injured on the job. Injuries must be disabling to the point that the worker is no longer capable of performing the job. Benefits can be temporary or permanent.
The business needs for this type of insurance can vary dramatically. For example, if you have a mobile workforce, making sure there is adequate insurance coverage for your workers, independent of location, is a must. Some companies even offer preferred provider health network access to ensure workers get the best possible care.
Like other forms of insurance, workers’ compensation insurance is often reviewed, and sold, based on price. However, not all insurance is created equal. Be sure to work with a company with a well-deserved reputation for treating disabled employees fairly.
5. Auto Insurance
Depending on your business, you may or may not need commercial auto insurance. For example, a bar, restaurant or office business would not typically carry commercial auto insurance. Conversely, contractors, realtors or others that have employees who drive regularly for work should have commercial auto insurance.
A common difference between commercial and consumer auto is that commercial insurance will typically carry higher liability limits. From an insurance company point of view, if your vehicle is over 10,000 pounds (gross vehicle weight), has a logo on the side or is used for hauling materials, you should have a commercial policy.
The large market where business owners may be exposed is using their personal vehicle for business purposes. The point above about higher liability limits for commercial vehicles is important. When there’s an accident, other parties are likely to consider a business as having deep pockets. Therefore, filing a lawsuit is more likely.
To protect yourself from this situation, if driving a personal vehicle for business use, get an endorsement on your general liability policy that increases the coverage of your auto insurance when used for business. In effect, this is a bit like a personal umbrella policy, but for a business.
Proper insurance coverage is an important part of being prepared. Schedule time during National Preparedness Month to review your policies and insurance companies.