Every business faces risks, and the best way to protect yourself is with the right insurance. This can include liability, property and even workers’ compensation.
Tivly is a marketplace that makes the process of getting small business insurance easy and fast. They offer a variety of policies that can be tailored to your specific needs.
Liability
Few things are riskier than starting a business, but you can protect your investments from financial disaster by purchasing the right insurance coverage. Business insurance, also known as commercial insurance, covers your assets against property damage, lawsuits and lost income. It can include general liability insurance, crime insurance, commercial auto insurance, business interruption insurance and a variety of other policy options that vary by state.
Business owners may choose to bundle property and liability coverage into a single policy, called a business owner’s policy (BOP) or commercial package policy (CPP). This helps reduce costs, as it can be more affordable than buying the policies separately. Several factors affect the cost of business insurance, including your industry, business activities and operations, claims history, location, coverage limits, deductibles and other policy terms. One of the best ways to keep your costs down is to conduct a thorough risk assessment and create an action plan for managing risks.
Property
Property coverage is part of assurance entreprise and helps pay to repair or replace the physical assets your company owns, like buildings, furniture, inventory and work equipment. It can also help cover loss of income from those assets if they are damaged by fire or other covered events. This coverage is often included in a business owner’s policy (BOP) along with liability and business interruption insurance.
Business property policies typically offer two types of coverage: actual cash value and replacement cost. The former covers the cost to repair or replace the property minus depreciation. The latter does not include depreciation and may result in higher premiums.
Additional coverages for your business property might include theft and a surety bond (similar to a fidelity bond) that protects the business from financial losses due to employee dishonesty. You can also add business interruption coverage that pays for extra expenses to keep operating after a covered event. Business property coverage is a must for any type of business that has physical assets.
Business Interruption
Most commercial property insurance policies include a business interruption clause or endorsement. These typically cover a period of time (usually 30 days) that the insurer will pay for actual loss of income and extra expenses caused by direct physical damage to property that results in your business having to close.
The most common types of loss covered by this type of coverage are lost revenue from customers not being able to come to your business, mortgage and lease payments you would have made if the building was open, and taxes that you would have paid. Some business interruption policies also cover costs to find a temporary location and the training necessary for your employees to work at that location.
Unfortunately, the COVID-19 pandemic has thrown a wrench into the way most businesses think about this type of coverage. Most BI policies exclude loss due to a virus. While this is a reasonable exclusion given that insurance works best when the losses of many policyholders are spread across a large group, it will create significant hardship for many small business owners to lose this protection.
Employee Dishonesty
Employee dishonesty coverage, also known as crime insurance or business crime coverage, helps pay for losses related to theft of money, property or securities by current and former employees. These policies typically cover acts of forgery, computer fraud, money order fraud and credit card fraud. Some of these policies can also include a third party endorsement to extend the policy to cover property, money or securities owned or leased by clients. This type of policy is commonly used by landscapers, cleaning services and residential cleaners, but may also be found in policies for auto repair shops, banks or law firms.
It’s important to note that these types of policies don’t usually cover crimes committed during war, which is why it’s essential to have a business interruption policy in place. They’re also usually written on a discovery base and only pay for incidents that are discovered within the policy period. If an employee is discovered to have stolen money, property or securities from a client, they can be covered under a separate fiduciary bond or an ERISA policy.