5 Common Personal Risks Covered by Business Insurance
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Contents
Introduction
Everyone wants to run a successful business, but not everyone wants to take on the risk of losing their personal assets in the event of a lawsuit. When you’re starting out as a small business owner, it can be tempting to forego purchasing insurance for yourself. However, it’s important that you protect your personal assets from potential risks that could arise from doing business as an employer or landlord. If you’re looking for ways to increase the value of your company while minimizing risk exposure, here are five common personal risks covered by business insurance:
Business interruption
Business interruption insurance covers the loss of income resulting from a covered peril. If you’re in the middle of a project and your building burns down, or if your office floods and is unusable for several weeks, business interruption insurance can help you recover from a temporary shutdown caused by fire, flood or other covered perils. Business interruption coverage pays for lost profits during this time period (up to 12 months). This coverage may be included as part of property insurance policies that include buildings, contents and liability coverage.
Increased cost of doing business
The cost of doing business can increase due to a number of factors. These include:
- Increased wages and overtime
- Increased utility costs (electricity, gas)
Computer hardware and data loss
Computer hardware and data loss are common risks for businesses. These can include:
- Loss of data. This is the most common type of claim that insurance companies receive, as it occurs in nearly every business. You may have heard about this from friends or family members who have had their computers or smartphones stolen or broken, losing all their valuable photos and other files in the process. It’s also possible for your company’s computer systems to fail due to a power surge or other issue with electricity that causes them to crash without warning–a risk you’ll want to take steps towards mitigating by having backup solutions available (see below).
- Loss of computer hardware (such as laptops). If someone steals one of your employees’ computers while they’re away from work on vacation, they won’t be able to get any work done until they buy another one at great expense! And remember: if an employee uses their own personal devices for business purposes–say, accessing sensitive client information via Dropbox–then those devices could potentially be covered under this coverage too!
Employment practices liability
Employment practices liability insurance covers you for lawsuits related to wrongful termination, discrimination and harassment. This coverage can be purchased as a separate policy or included under your general liability insurance policy. It’s important to note that this type of insurance does not cover employee injuries or illnesses–it only applies if there is a lawsuit against you based on an employee’s claim that they were wrongfully terminated or discriminated against due to their race, gender, age or other protected status (including sexual orientation).
The cost of employment practices liability varies depending on the size of your business and how much risk management coverage you want from it; however it tends to be very expensive because it covers such large areas of potential legal action against you as an employer.
Financial loss on real estate and plant
- Loss of rental income. If you have a business that rents out property, such as an apartment building or commercial space, and your tenant defaults on the lease agreement, it can be costly to replace them.
- Loss of property value. This is especially true if your company owns real estate outright; if the value goes down (due to market conditions or other factors), you may need to sell at a loss or take out loans with high interest rates just so that you can continue paying taxes on it every year until its sale becomes profitable again.
- Loss of equipment/inventory/accounts receivable: You’ll also want coverage for any equipment lost due to theft or damage caused by natural disasters such as floods or fires–and even if something happens accidentally within the office itself!
Business insurance can cover personal risks for your business.
It can help to protect you from financial ruin in the event of a disaster or other unforeseen circumstance. Business insurance covers many common personal risks, including:
- Cybersecurity and data breach protection – If your company’s systems are hacked and sensitive data is compromised, business insurance can reimburse you for any costs associated with repairing the damage caused by this breach.
- Personal liability – If someone gets injured while on your site, or if one of your employees causes property damage while working for you, then business insurance may be able to provide compensation for their medical bills and other expenses related to their injury (such as lost wages). This type of coverage also protects against lawsuits brought against you by others who have been wronged by actions taken by employees in their capacity as representatives of your company.
Conclusion
The bottom line is that business insurance protects you from personal risks. If you’re wondering whether or not it makes sense for your business, call us today! We can help you find the right coverage at a price that works for your budget.
