2024 Business Insurance Review
No matter what type of business you operate, your business is exposed to various kinds of unpredictable risks such as theft, fire, and third-party damages.
Business insurance is designed to protect your business from these unforeseen risks. Let's explore the coverages included in business insurance and the additional options available for coverage.
Businesses typically enroll in a Business Owners Policy (BOP), which is a package policy combining liability and property insurance. A BOP essentially includes not only the necessary liability and property insurance for business operations but also many additional coverages. In terms of premiums, it is much more competitive than subscribing to coverages separately. Let's review the main coverages included in business insurance:
- General Liability Insurance : Provides compensation for bodily injuries or property damage caused to third parties due to negligence within or outside the business premises. For example, compensation is covered by liability insurance for accidents such as a customer slipping and falling in the store or getting injured by a sharp display stand.
- Product Liability Insurance : Covers damages to customers caused by the products sold or services provided. For instance, if a customer experiences skin problems after using a hair product purchased from the store, this insurance covers medical costs and, if necessary, legal costs as part of liability insurance.
- Business Personal Property Insurance : Compensates for property loss due to fire, theft, or natural disasters within the business premises. Most items owned by the business inside the store are covered against most disasters, excluding floods or earthquakes, within the insured limit.
- Business Income & Extra Expense Insurance : For instance, compensates for the loss of income during the recovery period when business operations are halted due to disasters such as fire, explosion, or theft. Business income coverage helps businesses withstand losses caused by disasters, enhancing business continuity and resilience. Business income coverage may include the following:
- Net Income Loss: Compensates for the loss incurred when business operations are interrupted due to a disaster.
- Fixed Expenses: Covers fixed expenses (rent, salaries, lease payments, etc.) of the interrupted business.
- Extra Expenses: Covers additional costs incurred to resume business operations as quickly as possible.
- Business Interruption Extra Expenses: Protects against additional costs for alternative locations or equipment rental for the interrupted business.
In addition to the main coverages mentioned above, many additional coverages are included in business insurance. It is important to note that EPL (Employment Practices Liability) and Cyber coverages are not included in business insurance. It is advisable to subscribe to these coverages separately. EPL insurance covers claims made by employees or visitors alleging unfair treatment such as discrimination against the business. With the increasing reliance on digital systems and online sales, the incidence of data breaches and cyber attacks is also rising, and such incidents are covered only by Cyber insurance.
