8 Common Commercial Insurance Blind Spots
You may think your business has enough coverage but when you file a claim to recover a loss, you find out your policy excludes a particular peril or limits are insufficient. When it comes to commercial coverage, businesses should anticipate these common blind spots.
1. Forgoing Disability Insurance
When a non-work-related injury occurs, workers’ compensation is often not enough. In the event you or an employee are too injured to work but need to continue earning income, short and long-term disability coverage can replace as much as 70 percent of your salary.
2. Not Taking Out Flood Insurance
If your business is not located near the coast or in a flood plain, you may think insurance is unnecessary. Yet rivers can overflow and damage your facility or equipment. Without flood coverage, you’ll be expected to pay for everything out-of-pocket, as commercial property excludes this peril. The expenses associated with a flood could force you to close down.
3. You Don’t Think About the Sewer Line
For both business and homeowners, sewer lines can create a literal blind spot in coverage. Your local municipality covers any breaks and overflows, except for the pipes extending to your property. Commercial coverage also tends to exclude sewer-related damage.
Separate sewer backup insurance anticipates overflows and subsequent property damage to supplement the coverage of your commercial property policy.
4. You Forget About Equipment Breakdown
While commercial property insurance extends to your equipment, it excludes any type of performance-related issues, including wear and tear and other damage requiring repairs. Should you choose to skip equipment breakdown insurance, you’ll be left paying for all repairs and replacement costs out-of-pocket.
5. Relying on Homeowners Insurance for Business Activities
If you conduct any business from home, you might assume homeowners insurance has you covered. Yet, unless you take out a specific endorsement or a business owners’ policy (BOP), commercial activities and subsequent issues, including damaged merchandise or a client injury on your property, are excluded from your policy. While you might not be paying for office space, these expenses fall directly on you, unless you obtain appropriate coverage.
6. You Don’t Update Your Policies
As businesses progress, they go through changes. Over time, you may hire more employees, expand your office space, purchase more equipment or offer additional services. Yet if you forget to update your carrier to adjust your policy’s limits, a future claim may be needed. Before you need to file, make sure your carrier is kept abreast of your business changes.
7. You’re Unsure What Your Policy Covers
Simply having commercial insurance is not enough. Business owners should thoroughly understand what their policy covers, excludes and when these instances apply. Also ensure your policy remains up-to-date and reflects your current business structure and needs.
8. Ignoring Cybersecurity and Data Breach Coverage
Although you try to be careful, cyberattacks can and do happen; no one is immune. Rather than considering this an unnecessary expense, take out cyber liability coverage and train your employees on how to identify social engineering and other threats.
To review and update your commercial insurance policies, contact us today.