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4 Commercial Insurance Policies to Consider When Starting a Business

Starting a business can be an exhilarating journey. You may be knee deep in plans for new products, hiring employees, or finalizing the perfect location. You may have poured your heart and soul into it, but before you start to see the fruits of your labor, there are many steps that need to be taken. One of the most important decisions you’ll need to make for your new venture is what type of commercial insurance coverage will best suit your needs. Within this article we will discuss four types of commercial insurance: a business owner’s policy, professional liability insurance or errors and omissions insurance, cyber liability insurance and commercial auto or hired and non-owned auto insurance. We hope this information helps as you move forward with your new business!

Business Owners Policy

The most important policy when it comes to protecting your business is a business owner’s policy, sometimes referred to as a BOP. This type of policy provides you with both general liability insurance and commercial property insurance.

What is general liability insurance?

General liability insurance covers the cost of lawsuits from people outside your business who sue over bodily injury or property damage. It also pays legal costs related to advertising injuries, including defamation and copyright infringement.

What is commercial property insurance?

Businesses that lease commercial space, have a mortgage, or work with expensive client property are often required to carry this type of coverage. Commercial property insurance pays for repair or replacement of damaged, destroyed, or stolen business property. That includes your commercial space. General liability and commercial property insurance are essential when it comes to protecting your business. What’s more, a BOP usually has discounts for bundling both policies for the same price of one policy elsewhere. With business owners’ insurance, a sense of relief is provided to the owner. You continue running your company with care but are easily able to deal with any mishaps that happen because you’re covered by an extra layer of protection.

Professional Liability Insurance or Errors and Omissions Insurance

Professional liability insurance also Errors and Omissions Insurance is a policy that protects professionals such as accountants, lawyers, and physicians against negligence and other claims initiated by their clients. Professionals who have expertise in a specific area require this type of insurance because general liability insurance policies do not offer protection against claims arising out of business or professional practices such as negligence, malpractice, or misrepresentation. An example of this is that within the past few years there has been an increasing number of lawsuits from customers claiming they were injured from products that
carried a recall notice. As a result, many manufacturers are being held accountable for their actions. While they should not be responsible for every piece of equipment that is returned under warranty, they are responsible for the injuries that occur from using products that have been recalled; Professional Liability would could protect you in this case. While this policy may not seem like an important purchase when starting a new business, it could prevent you from having to pay hundreds of thousands to millions in fines if someone were to get injured because of a faulty product or service your company provides.

Cyber Liability Insurance

In today’s age, cyber liability needs to be a major concern. Many new businesses are starting online and even conventional brick-and-mortar businesses have a strong web presence that needs to be protected. Computer hacking and other cybercrimes are on the rise. Cyber liability insurance helps protect your business against intellectual property theft, Internet fraud, email scams, and unauthorized data access. You may think that your website is secure from hackers, but when you consider the fact that many small to medium-sized business organizations often do not know how to protect themselves against viruses, it becomes very easy for an attacker to break through their security and find some important information they can use against them. Cyber liability insurance will help cover costs incurred by a company if there is an electronic security breach that leads to a loss of data.

Commercial Auto Insurance or Hired and Non-Owned Auto Insurance

Commercial Auto Insurance is a policy designed to cover your business vehicles in the event of a collision, theft, or other damage. This type of insurance can be necessary for businesses that use their vehicle not only for personal reasons but also as part of their job. This insurance is required by law in all states. It covers vehicles that are being used for business purposes which are not owned by the insured. If you have employees that use their personal cars for work related activities, this type of policy will cover them if they get into an accident on the job. As you may know, insurance premiums can be quite expensive. However, in relation to the amount of money that these policies can save you if someone were to get into an accident with your company car, it is a worthwhile investment. Employees at many businesses often use their own cars to make sales calls or deliver goods to customers. If they are involved in an accident while on the job, this type of policy will help cover those costs. First and foremost, it is important that you purchase the right type of commercial insurance policy for your specific needs. The four types of commercial coverage we discussed in this article are all different from one another and offer various levels of
protection depending on what level you need. We hope these tips have helped provide clarity when considering which policies will work best for your business. And if you’re still not sure where to start or how much coverage is required by law? Contact Arclight Insurance today! Our team has years of experience in providing quality services at an affordable price, so let us help take care of all your insurance needs while you focus on running your business.

What You Should Keep in Mind When Buying Cyber Security Insurance

Cyber security insurance is an important aspect to any company’s business plan. Cybercrime has been escalating in recent years and as such, the need for cyber security insurance has also increased. If you are interested in purchasing a policy for your business there are many aspects that must be considered before making your purchase.

If you only want a policy that meets your potential customer’s or partner’s requirements and are just looking for the cheapest option then price is probably all that matters. However, if you’re trying to protect your business from the potential financial ruin of a data breach then it is more likely you will focus on the coverages to make sure they’re comprehensive. You will also want to evaluate optional coverages to see if they’re applicable and you may even want to look at the exclusions or limitations of your policy.

Evaluate Your Risk

To reduce your insurance costs, you should evaluate the risk posed to your company by understanding where there are gaps in cybersecurity and how strong current measures already implemented. Some questions that may be helpful include:

1. Is your firm handling or collecting sensitive information like payment card data (PCI), personally identifiable information (PII), or protected health information (PHI)?

If your business is handling, or collecting any sensitive information, chances are your customers will require you to be PCI compliant. If it is determined that you do not meet the necessary requirements for compliance then obtaining cyber security insurance can help protect you against a possible data breach.

2. Is your company likely to suffer financial loss due to a data breach?

The more likely and severe the potential costs of a data breach would be, means that there is more reason for your company to obtain cyber security insurance. Insurance policies vary in how they respond to different types of coverages so checking the coverage terms may benefit you when looking at various insurance options.

3. How many computers does your firm have?

Businesses with a large number of computers tend to experience a higher degree of risk than those with a smaller number. A data breach can be costly due to the time and effort it takes to fix after a security incident, so it is important to ensure that you have adequate coverage for the risks your business may face.

4. Is Customer info safely and securely captured and stored?

A crucial aspect that often goes overlooked is the use of encryption and key management to protect personal information, such as credit card numbers, names, and addresses. Ensuring this type of data is encrypted can help you avoid extensive costs associated with a data breach.

5. Are you in the business of handling highly sought-after private information?

Lawyers, Medical Professionals, and financial professionals all possess our most personal, important, and valuable info. Thus, they are at a higher risk than other businesses. In fact, these professions have the highest rates of cybercrime activity. Many companies’ digital security budgets are the same as they were in 2002, even though 83% of the company now works from home and has private IP spread across half a dozen unsecured devices, including a tablet the CFO’s son plays Roblox on. If your business works with any form of sensitive data or even social security numbers, it is likely that some requirements imposed by law will need to be met concerning liability insurance and cyber security insurance. This type of coverage can also help protect against monetary damages resulting from fraud or theft if client data is compromised due to negligence.

6. Are you a retailer that processes payment cards?

If your business is involved in taking, storing or transmitting credit card information, your customers will typically require your company to comply with the Payment Card Industry Data Security Standard (PCI DSS.) Failure to do so can result in fines and other penalties. If this is the case for you, it would be wise to check out cyber security insurance options that protect against these costs.

As mentioned above, there are many reasons a company finds itself looking to purchase a cyber security insurance policy. If you’re trying to meet a contractual requirement then it is likely that price matters most to you as this policy is more of an obligation than a safety net. In some cases, the contract may even dictate which insurer or insurer’s product options are required for compliance. Provide these requirements to your insurance company so they can find a policy to match. This is often the case when dealing with financial institutions such as banks, brokerages and credit unions that require cyber security insurance in order for their business partners to do business with them. The main motive of these companies is not to provide protection in the event of a data breach but rather, to meet contractual requirements so they aren’t excluded from doing business with certain organizations based on their minimum-security standards for third-party business affiliates. These further highlights how important it is for organizations to make sure that their electronic systems are secure from hackers and malware threats.

Financially protecting your company against the cost of replacing lost or damaged data in the event of a data breach is the other primary reason for purchasing cyber security insurance. It makes sense that this type of coverage is more important to you as your primary motive is to make sure your business doesn’t lose money in the event of a costly data breach.

Exclusions and limitations

There are always exclusions and limitations involved when you’re considering any kind of insurance policy, so it’s important that you thoroughly review your provider’s
exclusions and limitations before agreeing to purchase their product. You want confirm that none of these potential loopholes can leave you unprotected should an unfortunate event occur. When assessing cyber security insurance policies be aware that most exclude business interruption coverage if your company has experienced a data breach caused by either internal or external employee wrongdoing. This type of business interruption insurance provides coverage for loss of income associated with a company’s inability to provide service as a result of the data breach. If your motives for purchasing cyber security insurance are mainly driven by financial reasons then it will be necessary for you to understand all aspects of coverage available with your insurance agent. If your objective is to protect your business from the potential financial ruin of a data breach, there will be more parameters in place that can affect your decision-making process and as such, the price will not play as big of a role. Your decision must focus on coverages and whether or not they are applicable to your business. Additionally, some optional covers may prove beneficial while others may not so it’s important to consider these factors when deciding on purchasing insurance coverage. You know that it is important to protect your company from the potential financial ruin of a data breach. If you are looking for an insurance policy that offers comprehensive coverage, then contact Stratford Timber Insurance today! We have years of experience in cyber security and offer competitive rates on our policies. Call us at 212-555-1234 or email info@stratfordtimberinsuranceco.com with any questions about how we can help protect your business against unforeseen disasters like data breaches.

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