Understanding the types of business insurance available — and how to determine what’s right for your company — keeps operations on safer footing.
In the modern-day landscape of business operations, no two ventures are exactly alike. Each industry, each operation and each set of needs comes with its own unique challenges and risks. This is precisely why, when it comes to choosing the right types of business insurance, a one-size-fits-all approach falls short.
Tailoring your insurance coverage to suit your individual industry, operations and risks is a necessity. Unfortunately, it isn’t always easy. Here, BCH’s business insurance professionals delve into what you should know about selecting the types of business insurance that make the most sense for your needs. Read on for insights into everything from why customization matters to determining the right approach for your business and where you can turn for help.
Why is Custom Commercial Insurance Important?
The abstract nature of insurance can make it difficult to grasp the way certain intricacies impact coverage. Let’s compare your custom commercial insurance to something more tangible. Imagine wearing a suit purchased off the rack versus one that’s custom-tailored. While the former might keep you covered in a way that suffices in most situations, the latter ensures a perfect fit, offering comfort and confidence in any circumstance. Similarly, generic insurance policies offer some level of protection but often leave critical gaps that could have costly repercussions for a business in times of crisis.
The insurance needs of a tech startup vary immensely from those of a manufacturing company or a retail business. Customizing your commercial insurance policies ensures you are adequately protected against the specific risks inherent to your industry and operations, from cyber threats to liability concerns and even risks of property damage.
Considerations When Searching for the Right Insurance
In the hunt for the right insurance for middle-market businesses, it’s important to delve into the intricacies that dictate how your company goes about its work. By defining everything from unique operational factors to issues impacting your company’s geographic region and industry, it becomes easier to pinpoint — and protect against — various risk factors.
- Industry-Specific Risks: Although risks are inherent across the board, the specific types of risks that threaten a business — and the degree to which the business is vulnerable — will vary based on your unique line of work. For example, a construction company is likely to prioritize coverage for bodily injury on construction sites, while a software company might focus its efforts on cyber liability insurance to protect against data breaches.
- Business Operations: Do you rely on company vehicles or costly equipment to carry out your work? Do employees work in the office, from home — or a mix of both? Do you keep sensitive client data on file? When you identify potential points of vulnerability, you can address them proactively with insurance coverage.
- Legal Requirements: Depending on your industry or where you do business, certain types of insurance may be legally required for you to continue operations. For instance, contractors must often meet specific insurance requirements in order to win a project bid.
- Future Growth: As a business grows and evolves, its coverage needs follow suit. After all, introducing more people, services or locations means introducing more threats of risk. Your approach to commercial insurance should be flexible enough to adapt to your growth trajectory.
Understanding the Types of Business Insurance Available
Navigating the landscape of commercial coverage can be daunting, but understanding the types of business insurance available is a crucial step. It’s important to note that all coverage options can be customized in ways that better serve the insured business or individual’s unique needs. Let’s take a high-level look at common protections today’s businesses put in place — and some of the more tailored offerings, too:
- Commercial Auto Insurance: Coverage for vehicles owned or used by a business for work-related needs.
- Cyber Liability Insurance: Safeguards against losses resulting from data breaches, hacking incidents, ransomware attacks and related cyber threats.
- Employment Practices Liability Insurance: Protections to aid in costs associated with defending lawsuits, or covering judgments and settlements related to issues such as discrimination, wrongful termination, sexual harassment and retaliation.
- General Liability Insurance: Coverage against a third party’s claims of bodily injury or property damage.
- Professional Liability Insurance: Protection against claims of negligence or inadequate work. Also known as errors and omissions insurance.
- Property Insurance: Protection for damage to physical assets such as one’s buildings, equipment and product inventory incurred during covered events such as fire, natural disasters or theft.
- Workers’ Compensation Insurance: Benefits provided to help employees who suffer work-related injuries or illnesses access and pay for medical treatment.
A full range of niche coverage options also exist to help businesses and individuals further protect the assets that fuel their livelihoods. Because of the highly customized nature, however, there are virtually as many types of business insurance as there are businesses. Here are a few examples of niche coverage options.
- Key Person Insurance: A different take on the life insurance policy, key person coverage provides a company with a death benefit in the event that a key leader or employee should pass away.
- Livestock Insurance: A popular option for farmers and ranchers, this protection safeguards against financial loss or loss of business when an unexpected event affects the business’s revenue-generating animals.
- Prize Indemnity Insurance: A popular option for country clubs or companies that regularly run golf tournaments, this coverage protects the insured in the event that a participant wins a large prize after scoring a hole-in-one. Also known as hole-in-one insurance.
- Sole Proprietorship Insurance: Coverage for businesses owned and operated by just one person, designed to offer protection against issues such as data breaches, property damage, lawsuits and customer injuries.
More from BCH: Interested in learning more about common coverage options available for today’s businesses? Download our Coverage Insights Quick Sheet for additional insights.
Why Turn to a Professional Commercial Insurance Firm?
Given the complexities of commercial insurance — and the many available options — we recommend seeking guidance from professional insurance brokers, agents and risk management consultants. Not only do they possess the knowledge needed to assess unique needs and recommend appropriate coverage options, but they can help navigate the intricacies of policy terms, assist with claims processes and negotiate favorable terms on a company’s behalf.
Working with the right team can save your company time and effort, and provide peace of mind for the road ahead. At BCH, our commercial insurance pros work with clients for the long term — and view themselves as part of your team. We work closely to understand your industry and the unique way you go about operations, then craft coverage that offers targeted protections. When your business shifts and needs change, we ensure your approach to coverage follows suit. It’s all about being prepared when it matters.
If you have questions about any of the above, or if you’re interested in learning how BCH’s risk management and business insurance professionals can help guide your operations forward, feel free to reach out at any time. We’re here to help, and we look forward to working with you.