When a business is confronted with an employee who is involved in a car accident, a professional liability or other claim, it is important to have proper insurance coverage in place.  But what types of insurance should a small business consider in anticipation of potential claims?   This post provides a brief overview of potential insurance coverage that businesses should consider.

  • Business Structure. First, the business organizational structure should be taken into account when deciding what type of insurance coverage should be obtained.  Sole proprietorships, general partnerships, limited liability companies and corporations all have various liability exposure levels which should be taken into consideration when evaluating insurance coverage.
  • Business Type. Second, certain types of businesses have insurance requirements under local, state and federal law which should be taken into consideration as well.
  • Insurance Categories.Third, there are several categories of insurance that should be considered.
    • General Liability.  General liability insurance provides coverage for employees or products and services when they are alleged to have caused bodily injury or property damages to a third party.
    • Professional Liability. Professional liability insurance aka “Errors and Omissions” provides insurance coverage for professional services for allegations of negligence or failure to perform professional services.
    • Property. Property insurance provides insurance coverage for a business’ building or business personal property to protect against damages to property related fires, theft etc.
  • Business Activities. Fourth, once coverage types are considered, depending on the products and services provided, a business should also think about specific coverage for specific types of activities e.g. products liability insurance, vehicle insurance, data breach insurance, etc.
  • Additional Coverage. Finally, once a business has decided on coverage it may also want to consider business interruption coverage and umbrella insurance to cover claims that are beyond policy limits.

This post is not intended to provide legal advice.  Should you want additional information please contact an  insurance provider and/or an attorney to get additional information.

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