When it comes to insurance all business owners want to know, “What do I need to be protected without spending a fortune?”
Most business owners know they need Commercial Property insurance, General Liability and Business Auto if their company has vehicles in its name. However there are some other very important coverages that, in this very litigious society, business owners should consider purchasing.
General Liability is a great coverage that includes protecting the insured from losses regarding bodily injuring, property damage, damage to rented premises and protection for false advertising. This policy will also cover the legal fees associated with protecting the insured from lawsuits that arise from any of these claims. However, there are many coverages that are excluded in a basic General Liability policy. Two of these coverages are Data Breach and Employer’s Practices Liability.
Data breach claims have skyrocketed over the last few years, we are in a technology era and most of the data businesses obtain is held electronically. Most small businesses are at risk of being affected and when there is a breach an average of 80% of the businesses cannot recover from a breach. This type of claim is not limited to someone hacking into a computer system and obtaining credit card and social security information, it could be as simple as a stolen laptop or lost paper files. It could be the accidental release of someone’s medical records, driver’s license number down to even an email address being exposed. In the event of a breach, the business owner is subjected to the rules of the state. The clients must be notified immediately once the realization of a breach has occurred, this can cost up to 200.00 per client to notify and get credit monitoring. Having this insurance coverage on your policy will save a tremendous amount of money in the event of a breach, much more than the cost to add it onto your policy. With everything that happened to Schnuck’s this past year more and more business are going to start paying closer attention to their own data security and an insurance policy could just be that extra layer of protection.
Another important insurance coverage that many businesses elect not to purchase is Employer’s Practices Liability coverage. EPLI coverage usually evokes thoughts of discrimination and sexual harassment, but it covers a lot more bases than those two hot topics. Wrongful termination has become a hot issue over the years and many employees are suing their employers pleading wrongful termination. The EPLI policy will kick in and pay for any costs attributed to the business defending itself against these claims even when they are not at fault. In 2011 the median EPLI claim a business incurred was 95,000 in fees and over 325,000 in ELPI Claim Jury awards.* These kind of claims could cripple and force a business to close its doors.
* The 2012–13 edition of Employment Practice Liability: Jury Award Trends and Statistics (published by Thomson Reuters) is the definitive source of data on employment-related jury verdicts and claim settlements. Some key statistics reported in this publication, which can be obtained by calling 1–800–733–2889
It is very important, now more than ever, to review your policies and sit down and talk with your insurance professional to ensure that your business and all its assets are properly protected in the event of a loss.
Independent Agent, Insurance Source Inc.
Kelly represents all the major insurance carriers in Property and Casualty and specializes in providing coverage for small to mid-size commercial accounts.