Understanding Your Industry’s Insurance Needs
Starting a new business is stressful, and trying to understand the complex world of insurance can be one of the most daunting parts. While there are common forms of small business insurance that most companies need, no two businesses are entirely alike and thus have different liabilities and face varying degrees of risk. And, for this reason, businesses in certain industries end up needing more coverage.
The key to adequately covering your business without overspending is to understand your industry’s exact risk factors and which form of insurance mitigates those risks.
The agriculture industry comes with an increased risk of employee injury as most employees spend their days working outside and dealing with large equipment. To account for this, you may want to consider choosing a higher limit for your workers’ compensation policy.
Ensuring that you have effective safety measures in place can help reduce the number of on the job injuries, and many workers’ comp providers give discounts if you experience fewer accidents than other companies within the industry.
You will also want to consider your commercial auto insurance carefully. Your employees will operate non-traditional vehicles and often have to drive to multiple locations within a given day. You’ll likely want to select an auto insurance policy with a lower deductible since auto accidents are common occurrences.
On construction sites, you’ll have an increased risk of employee injury and damage to client property. Again, having proper safety measures in place will go a long way toward lowering these risks.
You will need to have worker’s comp insurance and general liability insurance to cover property damage caused to a client’s home or business space. You will also need considerable coverage for commercial auto insurance.
Legal and Financial Advising
No one can be perfect all the time, and in legal and financial situations, there is no way to guarantee your client’s preferred outcome. When you give advice and a client ends up taking a financial hit, they may try to blame you for their loss. Should a client file a lawsuit against, having errors and omission insurance will help to cover the legal expenses.
Publications, Media, and Advertising
Any time you publish or broadcast content, you run the risk of advertising injury. An advertising injury tort can include copyright infringement, slander, libel, invasion of privacy, or misappropriation of ideas. Having commercial liability insurance can help cover those kinds of claims.
The biggest risk in the tech industry is hackers. Cybercriminals are constantly trying to break into business networks and steal valuable customer data, which they can use for their own purposes or sell to others. Having cyber liability insurance or data breach coverage can help cover expenses related to:
- Theft or exposure of private business information
- Lawsuits filed by clients or customers as a result of a breach
- Expenses related to maintaining your public image after a cybersecurity breach
Transportation or Delivery Services
It’s no surprise that avoiding auto accidents is the top priority in the transportation and delivery industries. To reduce the associated risks, you can:
- Prioritizing hiring employees with clean driving records
- Meticulously maintain all vehicles
- Hold frequent training sessions and continuously reinforce safe driving practices
You will need commercial vehicle insurance to cover your employees as they drive, however. Different states have different requirements, so be sure to discuss your particular needs with your insurance agent. Rates can change based on when your employees will be driving and if you own or lease the vehicles.
Risks Based on Location
It is a fact that where your business is located may come with higher risks and specific insurance needs. For instance, if your business is located near a coast, you run a higher risk of being flooded during a tropical storm or hurricane. You may need to consider flood insurance on top of your standard commercial property insurance policy. The neighborhood where your business is located could also be a risk if there’s a higher crime rate in that area.
When you have a home-based business, many people assume that their business is covered by their home insurance policy. However, even if you add an endorsement in your home insurance policy, it won’t cover all your business-related needs.
If you operate a business from your home, there are a few insurance forms you may want to consider based on the nature of your work. For example, if you sell products, you will want to look at product insurance to cover if the product doesn’t work. You may also need general liability insurance if you see clients in your home.
Risk Analysis and Business Insurance
To provide adequate coverage for your business and employees, you first need to understand the most common liabilities in your field of work. From there, you can assess your business’s individualized needs and balance a budget for all your insurance requirements. Remember, business insurance isn’t one-size-fits-all; at the end of the day, choosing your provider, policy, and deductibles should come down to thorough research and risk analysis.