High Level Overview of Business Insurance

We all have insurance of some type (life, car, home, renters, etc.) incase something happens to ourselves, or our property. Businesses are no exception here. All businesses face losses - some losses can be mitigated, and some cannot. For those that cannot (such as the 2020 Covid 19 Pandemic) - having appropriate business insurance policies in place can be your saving grace.

This post will give you a high level overview of business insurance, the different types of policies available, and why it is important for your business.

What types of business insurance is available?

There are dozens of different types of business insurance. Some of most common are:

1. Commercial General Liability - protects businesses from third party liability claims arising out of the company's premises and business operations.
2. Cyber Insurance - for data breaches and data security events.
3. Errors & Omissions (also Professional Liability) - protects companies that provide professional services and their employees against claims made by clients for losses suffered because of inadequate work or negligence.
4. Property - for physical damage to buildings, offices, equipment, personal property, inventory, etc.
5. Directors & Officers - protects the companies directors and officers for losses resulting from their actions.
6. Workers Compensation - usually required by the State for companies that have employees - covering employee compensation and benefits for certain workplace injuries and occupational hazards.
7. Event Liability - specifically for one-time events, or series of events - such as concerts and conventions.
8. Intellectual Property Liability - for your company intellectual property.
9. Products Liability - for your company products and claims that may rise from their defects.
10. Employment Practices Liability (EPL) - deals with wrongful termination, harassment, discrimination, invasion of privacy, and other types of employment liabilities.

What's in an insurance policy?

Your business insurance policy acts like a contract that you may sign with a vendor or customer. The policy contains:

1. Declarations - a high level overview of the terms of the policy.
2. Definitions - defines the terms written throughout the policy, such as what constitutes a claim, and what a loss entails.
3. Insuring Agreements - sets out the covered and assumed risks by the insurance company.
4. Exclusions - Very important - what your policy does NOT cover.
5. Conditions - what you, the policy holder, must do in order to keep your policy valid.
6. Endorsements - specific and custom additions the insurer makes for your specific policy.
7. State Specific Addendum - each state has different insurance laws and requirements, and your policy should have a section outlining those laws.

Let us Help

You should work with a reputable business insurance broker to obtain policies. This is a very high level overview of what kind of business insurance is available for you, and what is in those policies. Having an attorney review the policy itself, and making sure you understand what is covered, what is not, and what your responsibilities are - can be key to your business.

Kader Law can help you plan out what insurance policies you may need, and review your policies through our outside general counsel offering. Let’s connect.

This post is not legal advice, and does not establish any attorney client privilege between Law Office of K.S. Kader, PLLC and you, the reader.