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Get to Know Insurance: Business Insurance Part Two

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Welcome to part two of Get to Know Insurance: Business Insurance! Thanks for stopping by to learn about the various types of coverages specifically for businesses. Last week we went over the different types of liability coverages, business auto insurance and business property insurance. This week we will be discussing cyber liability, workers compensation and crime coverage. If you know a business owner that needs information on various types of insurance, this is the place to get it!

Cyber Liability insurance is an industry that has grown exponentially over the last several years. Prior to 2003 this was a type of insurance that didn’t exist. That’s because before the internet boom we didn’t have to worry about hackers, data breaches or collecting payment or personal information online. With the drastic rise in business being conduction online, the risks of doing so have increased as well.

Cyber Liability does not cover losses to a business’s assets, money or property. Think of cyber liability like a general liability policy for the information that is collected online. It protects businesses that experience a data breach from the consequences of that event. If credit card or payment information, personal information like names, addresses, birth dates or social security numbers or any other type of data is compromised, cyber liability protects your business.

The average cost of a data breach is over three million dollars, far more than most small businesses can self-insure. Typical policies include coverage for legal fees and expenses, notification for your clients or customers, restoring personal identities of your clients or customers, recovering compromised data, repairing damaged computer systems, settlement costs and forensic investigation of the breach. Each insurance carrier is different and offers different types of policies, so it is important to know what’s included with your policy.

Workers compensation insurance is a coverage is a required coverage for almost every business in every state. Each state has its own specific requirements for workers compensation that can be found here. This coverage protects employees and their employers should a work place accident involving injury occur, regardless of who is at fault. There are some exclusions, like self-inflicted injuries, intoxication and war but most injuries are covered.

Insurance companies want to keep their costs as low as possible, so they generally require workplace safety procedures to be put in place and they usually offer accident prevention advice, trainings and procedures for their clients to minimize losses. Premiums for this coverage can vary depending on what kind of business the insured operates. Construction companies will generally be charged more because they have a higher chance of loss than a library or office.

Should an employee experience an injury on the job, this insurance covers the cost of their healthcare related expenses like hospital visits, medication costs, physical therapy, follow up visits and other costs associated with the injury. It also pays the employee a percentage of their regular income to make up for lost wages. Many people think workers compensation solely benefits employees, but it can also protect employers from costly lawsuits.

Crime coverage is also a very common type of insurance for businesses that can experience crime related losses from any number of criminal activity. There are 8 sections to most commercial crime policies. Employee related theft by forgery or alteration, computer fraud and funds transfer fraud. Non-employee theft can be insured for the same losses. Businesses today are much more exposed to crime related losses than they used to be.

If a business experiences a data breach or is hacked and has their accounts drained, crime coverage would be essential to recovering the lost money. If a business is broken into after hours and loses assets like its computers, office equipment or valuable data, crime insurance will cover those losses. Each insurance company is different so it’s important to know what is and isn’t covered on your crime insurance policy.

Next week we will be concluding the business insurance section of Get to Know Insurance with the different types of policies that businesses can buy, a BOP, package or monoline policy. We hope that you find value in our posts and are always open to questions or requests! Please let us know how we can tailor our posts to meet your needs.

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