Types of Insurance for Small Businesses and Considerations – Part 2

Written by: David Scott

If you haven’t read the first part of this article, you can find it here.

The world of insurance can be confusing for many that is why we set out to showcase the most important ones you should consider. In the second part of this two-part article, we’ll discuss how property coverage and commercial auto insurance can benefit your business while in the first part the focus was on general liability and workers’ compensation.

Property Coverage

It provides reimbursement to owners or renters of business assets like buildings and their content. Having protection against most risks to a property like fire, theft, and weather conditions could be essential to ensure the long-term survival of your business. There are several types and at first glance, it can be hard to tell what exactly they cover so we’ll list the most important ones with a brief summary to help you understand whether they are the right fit for your company or not.

  • Building coverage: It covers damage to the building itself, but it does not include assets such as inventory inside the building. It includes the structure itself and the cost of replacing integral parts of the building such as pipes, cables, and fences. Whether you’re the owner of the property or just leasing it, having building coverage can be a lifesaver on rare occasions, and even if you manage to avoid serious damage to your property, you’ll gain a peace of mind having this type of insurance. 
  • Business Personal Property (BPP): It basically refers to everything else inside your building that is not covered by building coverage. It includes furniture, office supplies, computers, inventory, machinery, and equipment used by your business.
  • Specialized Equipment Coverage: While most businesses won’t need this type of coverage, for some it could be essential. It is used for insuring incredibly valuable, hard to replace, or specialized equipment and assets. If you’re using valuable machinery that is not produced anymore or would take a long time to reproduce or your business is dealing with antique or one-of-a-kind assets, this might be the most important type of coverage to have. 
  • Business Income Coverage: While building coverage, BPP and Specialized Equipment coverage can reimburse the replacement cost of your assets, those will not cover lost income in case of shutdowns. It takes time to replace covered assets and if you had the foresight to utilize business income coverage, your company will be compensated for the loss of revenue while your assets are being replaced.
  • Money and securities: Since most general property insurance do not cover loss of money and securities if you’re operating a business that handles fairly large sum of money at its premises, this type of coverage could prove to be useful. It is essential for businesses in areas where burglaries and armed robberies are fairly common.  
  • Data comprise: While cyber liability basically covers damages caused to your clients due to a cyber attack, data comprise provides protection for the loss your business experienced during such an attack. It can cover for example lost hardware or software after a breach. Most insurance companies tend to bundle cyber liability and data comprise coverage together providing an all-encompassing solution for companies that are concerned with cyber security.

Commercial Auto

While hired and non-owned auto (HNOA) provided coverage for leased, rented vehicles, commercial auto refers to the fleet of vehicles owned by your company. If your company owns vehicles like cars, trucks, or vans, this type of insurance can provide protection against liability for damages caused to others and compensation for drivers of your vehicles in case of injuries or damages your company suffered due to an accident. The packages offered by insurance companies can vary, so we would like to list the most important coverage types you might want to add to your already existing or future policy:

  • Collision coverage: It can cover the costs of accidents related to the insured vehicle. It is the most basic type of coverage, and it is included in every single commercial auto insurance package.
  • Comprehensive coverage: It is a more comprehensive form that includes non-collision-related damages as well. Unlike most personal insurance, commercial auto that includes comprehensive coverage will provide reimbursement for damages related to theft, vandalism, harsh weather conditions, or even fire. 
  • Liability coverage: Covers damages to other people’s property or injuries caused to others in case you or your employee is responsible for an accident. It can also cover legal fees in case your business is sued. 
  • Uninsured motorist coverage: There can be situations where you are involved in an accident, and even though you are clearly not responsible, you don’t receive the necessary reimbursement because the motorist at fault did not have insurance or was underinsured. This is when this type comes in handy covering damages and injuries suffered in the insured vehicle. 
  • Personal injury protection: It covers not only medical expenses but also income loss of occupants traveling in the vehicle when the accident happened. Having this insurance can make sure your employees are taken care of even if they were at fault for causing the accident. 
  • Medical coverage payments: Pays medical and can even cover funeral expenses of occupants in the insured car in case of a collision. 
  • Loading and unloading coverage: If your business regularly transports heavy loads or work equipment you might want to consider adding this type of coverage to your insurance plan. Most basic commercial auto does not contain this type of coverage. It can cover accidents that happen during the loading and unloading process, including injuries caused to employees or bystanders.

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