Get the Better newsletter.
When Hurricane Sandy hit New York City in October 2012, it was a real blow to Lior Rachmany’s small business, Dumbo Moving + Storage. Although Rachmany had property insurance, he didn’t have a dedicated flood insurance policy, which meant he wasn’t covered for the rising waters of a storm surge. Machine movers, hand trucks and carts that were stored in the company’s basement were all ruined, and replacement costs were fully his company’s responsibility. “Because we didn’t have flood insurance at the time, all of the money we spent on the equipment was lost,” Rachmany says. “After Sandy, we learned our lesson and were afraid of losing anything else to future natural disasters or accidents.”
In the months following the storm, Rachmany raised the limit of coverage for all of his company’s moving vehicles from $750,000 to $1,000,000 per vehicle. He also purchased flood insurance regulated by FEMA, which costs his business around $13,000 a year.
Navigating the insurance landscape can be tough for small business owners. While many (if not most) know they need the basics such as property, liability and workman's compensation, there are a bunch of other policies available that could make the difference between going public and going bust. Here’s a look at some of the most important — and overlooked — ones.
Cyber insurance
In 2017, 61 percent of cyber incidents were directed at small businesses.
In 2017, 61 percent of cyber incidents were directed at small businesses.
The tools of the hacking trade have become so accessible, practically anyone can log onto the dark web, download malware, access a list of vulnerable targets, and deploy that malware very broadly within a short amount of time, warns Patrick Thielen, Senior Vice President of Cyber at Chubb. What’s particularly scary is how often small businesses are the target — in 2017, 61 percent of cyber incidents were directed at small businesses according to Verizon’s Data Breach Investigation Report.
“There’s a real gap in terms of the perception of the risk,” Thielen says, citing a recent Symantec study showing that while 77 percent of small business owners believe they are safe from cyber threats, only 17 percent have some form of cyber security in place. That’s a major disconnect.
A good cyber insurance policy will offer incident response coverage (law firms, computer forensic firms and crisis management firms that are brought in to help mediate an event). But you also want a policy that covers direct expenses associated with any losses, including business interruption, data recovery costs, liability coverage, defense coverage, settlement coverage and any fines or penalties that might be levied as part of a punitive action.
Professional liability
Professional liability insurance is great for business owners who provide a service — it protects you against a dissatisfied client. “If you miss a deadline or someone thinks you’re negligent or your work isn’t up to snuff, this policy would kick in,” explains Hannah Sullivan, co-founder and designer at Pogo, a business insurance platform for the self-employed. “Really, it’s protection against unhappy clients.”
If anyone can claim they suffered a loss in any way as a result of your services or advice, you need professional liability insurance.
If anyone can claim they suffered a loss in any way as a result of your services or advice, you need professional liability insurance.
An example of a business that might need this policy would be a wedding photographer. If a client doesn’t like your photos, or if your camera gets stolen and you lose their photos, this policy would take effect. “If anyone can claim they suffered a loss in any way as a result of your services or advice, you need this — general liability insurance does not cover dissatisfaction.”
Keep in mind that personal liability (the sort you carry on your homeowners’ insurance ) has no coverage for professional use. Personal liability and professional liability are completely separate coverages that handle separate exposures, and there is no overlap. Even a personal umbrella policy won’t cover you — there’s an exclusion for businesses and professional services. If you own a business, having professional liability is a must.
Some business owners may want to investigate specific professional liability policies unique to their industry. For example, a policy called “errors and omissions” (E&O) insurance covers various service providers for mistakes they may make in the course of business. People like travel agents, for example, may want it for oversights made during the booking process, but only about half of all agencies are insured, says Dan Francis, Director of E&O at Berkshire Hathaway Travel Protection. Some professional liability policies cover E&O, but not all.
Read again The important insurance policies small business owners are overlooking : https://ift.tt/2r5N8frBagikan Berita Ini
0 Response to "The important insurance policies small business owners are overlooking"
Post a Comment