Keeping your business’s doors open depends on a number of factors. But it’s clear that maintaining your business’s property and equipment is a huge part of that. If these assets are damaged in a fire or natural disaster, it might be difficult for your business to recover. So, you need to protect them. The best way to protect your business and be able to recover some of the costs associated with repairing or replacing your property, is to carry enough hazard insurance. Otherwise known as commercial property insurance.
What Does Hazard Insurance Cover?
Hazard insurance covers both the building that your business owns or rents, as well as the equipment that it uses. Depending on your policy, hazard insurance will generally cover the cost to repair or replace the following items:
Personal property
Tools and equipment
Inventory
Furniture
Computers
Accounts receivable
Documents
Outdoor landscaping
It will cover damages to the above due to:
Fire and smoke damage
Theft and vandalism
Some weather-related events such as hail, lightning, snow, sleet, or ice
Explosions
Aircraft or vehicles
Sprinkler leakage
Building collapse
Water (in certain specific cases)
Civil unrest or rioting
Damages caused by floods, earthquakes, acts of terrorism, nuclear attacks, or damage resulting from war are typically not covered by hazard insurance policies. You will need a separate insurance policy to protect your business from these occurrences.
Does My Business Need Hazard Insurance?
Even though business owners in many states are not required to have hazard insurance. It is still a good idea to get it because it can assist in covering the costs of damages that you would otherwise have to pay for out of your own pocket.
And while you might not be required by your state to have hazard insurance, in many cases if you want to borrow money for your business from a financial institution, you will most likely be required to have a particular type of hazard insurance policy. For instance, loans from the Small Business Administration (SBA) may require evidence of business hazard coverage.
If you’re looking to take out a loan for your business, you can read more about this topic here.
Do I Need Hazard Insurance if I Have a Home Business?
If you run your business out of your home, your homeowner’s insurance policy might not be sufficient to cover the business-related property that you keep in your home. This means you’ll probably want to have a separate policy.
The Cost
The price of hazard insurance will vary widely depending on a number of factors, including:
The age of your building/property – If the workspace that you own or rent is older, you’ll typically pay higher premiums because repairs to older properties tend to be more expensive.
The value of your building/property – The higher the total value of your assets, the higher the premium for this coverage will be.
Whether you choose a cash value or replacement cost policy – With a policy that pays out based on the actual cash value of your property, your payout will be determined by how much your property was originally purchased for before it was damaged. But if you have a policy that pays out based on replacement value, you will be covered for how much it would cost to buy a brand new version of the item that was damaged. Because of the effects of depreciation, cash value insurance is typically more affordable than replacement value insurance.
Coverage limits – As is the case with the vast majority of insurance policies, your monthly premiums will go up as you add more coverage.
Lender requirements – A lender may require that you have a certain amount of property insurance coverage before they will approve your application for a loan. The more insurance your lender requires, the larger your premium will be.
Hazard Insurance for a SBA Loan
The Small Business Administration (SBA) helps small businesses get the credit they need by putting the government’s name on loans made by commercial lenders. The lender provides the loan, and if the borrower doesn’t pay back the loan, the SBA will cover up to 85% of the loss.
To get a small business loan from the SBA, you need to show that you have hazard insurance. Having this type of policy shows that you own real assets that can be taken if you can’t pay back the loan. For example, if a construction company wants to borrow money to buy a piece of equipment but can’t pay back the loan, the lender can take ownership of the equipment.
Types of Hazard Insurance SBA Might Require
In order to be eligible for a loan from the SBA, you will have to show that your business has adequate insurance coverage. This could mean having general liability coverage as well as commercial property insurance/hazard insurance. Keep in mind that depending on the kind of loan you want to get, the Small Business Administration might require you to have other types of insurance coverage, such as workers’ compensation.
Specifically, the Small Business Administration requires the following when it comes to hazard insurance:
The minimum required coverage amount is 80% of loan principal.
Your business’s name must appear on the insurance policy.
Your DBA name must be included in the policy if you use one.
You must show proof of the required insurance within 12 months of receiving your loan. If your business does not already have it when you apply for your loan.
Is Hazard Insurance Tax Deductible?
The Internal Revenue Service considers business insurance premiums to be an ordinary and necessary business expense. So, yes it can be tax deductible. But there are other factors to think about when determining if your hazard insurance is tax deductible.
If you have a home-based business, you may be able to deduct some of your operating costs from your taxable income. Insurance premiums can fall into this category, along with utilities and home office essentials. For instance, you can deduct half of your annual hazard insurance premiums if your home is used for business purposes in excess of 50% of the time.
If your company suffers losses in an area where a federal disaster declaration has been issued, you may be eligible for deductions. If you have hazard insurance and your insurer only pays a portion of your claim, for instance. You can deduct the amount of your claim up to $500 per incident.
Other Types of Business Insurance You Need
What, where, and how you do business will determine the specific types of coverage your company needs. The following are some examples of common types of business insurance policies, other than commercial property/hazard insurance:
Workers’ compensation, which is also referred to as “workers’ comp,” is a type of insurance policy that is mandated by law. It provides benefits to employees in the event that they sustain an injury while performing their job. Employees can receive financial compensation, medical benefits, or both from the fund. Which fills the role of an insurance policy for disabled workers. Different states have different regulations regarding workers’ compensation, so check out our state-by-state guides.
Standard liability claims made by third parties (people who are not affiliated with your company) are covered by general liability insurance. This type of commercial insurance policy will pay for your company’s legal defense expenses in the event that your company is sued for causing bodily injury, damage to property, or injury to reputation. This includes everything from hiring an attorney to paying for court-ordered judgements and settlements. As well as any other costs that may arise.
General liability and commercial property insurance are the two main components that make up a business owner’s policy, or BOP. Which is essentially a bundle of the two (or more) types of commercial insurance. With a BOP, you will be protected from financial loss and covered for any claims that would be covered by either of those two types of policies. One simple policy can protect your small business from a variety of significant legal risks.
Commercial Property Insurance
As covered above, this type of policy typically includes coverages for the most common hazards. It safeguards both the structure and the contents of your business’s property.
If your business uses vehicles, you’ll need commercial auto insurance to cover things like liability, accidents, medical bills, personal injury protection, and uninsured motorists. It’s similar to a personal auto insurance policy. But commercial auto insurance has different eligibility requirements, coverage, exclusions, and limits than personal auto insurance.
Working With EZ
Our insurance agents work with the leading insurance companies across the country to ensure that you have access to the best coverage options for your business and its employees. In fact, we can save you hundreds of dollars annually by tailoring our search to find you exactly what you need, at the best price possible. If you have any questions, please do not hesitate to contact us at 877-670-3538.
Just one single lawsuit can damage your business beyond repair, so there’s no doubt that you need liability insurance. But it can be a challenge to figure out what kind of commercial insurance your business needs. Different policies cover different risks and claims; in fact, one of the most common questions from small business owners is “What’s the difference between general liability and professional liability insurance?” Both cover different types of risks, and figuring out how each works can be confusing. Understanding how they compare will help you make the best decision for your business. You might even need both!
What Is General Liability Insurance?
Court, attorney fees and settlements will be covered under general liability insurance.
General liability insurance is the most basic kind of commercial insurance. It covers costs if a third party accuses your business of causing them physical harm, damaging their property, harming their reputation through slander, or advertising errors that infringe on their copyright. These policies are usually written on an “occurrence” basis, which means that all losses will be covered during the time of the policy period, regardless of when you file the claim. General liability insurance will cover expenses including:
Professional liability insurance, which includes errors and omissions, or E&O, insurance, covers legal defense if a third party claims they suffered a financial loss as a result of your negligence. It is written on a “claims made” basis, which means that the damages had to have occurred within the active policy period or they will not be covered. Some of the claims that professional liability insurance covers include:
Negligence
Inaccurate professional advice
Failure to uphold contractual promises
Work that was not completed
Work mistakes or omissions
Both insurance policies will cover you in the event of any damages to third parties.
Coverage will typically pay for:
Attorney’s fees
Court costs
Investigator’s bills
Settlements
Judgements
How They Are Similar
Both protect against business liabilities and cover:
Damage to third parties.
Accidental damage, not intentional damage
Restricted coverage within a specific area; if you go outside that area you will not be covered.
How They Differ
The main difference between general liability and professional liability insurance is the risks they cover. General liability insurance will cover physical risks, like bodily injuries or property damage caused by your business’ daily operations. Professional liability covers financial losses resulting from negligence, errors, or omissions that occur when you provide your services to others.
Who Needs General Liability Insurance?
Every business owner should consider buying a general liability insurance plan to protect their assets. Accidents happen, and when you own a business, these accidents can be quite costly. You should consider general liability insurance if you:
If you have a home based business, then general liability is necessary. If you provide professional services or advice, then professional liability is necessary.
Have customers visiting your location.
Rent a physical location.
Handle other people’s property.
Own a home-based business.
Sell, manufacturer, or distribute products.
Advertise your services.
Who Needs Professional Liability Insurance?
Professional liability insurance is important to consider if your business provides professional services and has specialized professional training. Some professionals might even be legally required to obtain this type of insurance. You should consider a professional liability insurance plan if you:
Provide professional or technical services or advice.
Are expected to maintain professional standards.
Some examples of people who should have professional liability insurance are lawyers, consultants, accountants, and technology inspectors.
Which Do You Need?
In many cases, you will need both policies to fully protect your business from an unexpected lawsuit. EZ.Insure provides licensed agents who are highly trained in commercial insurance and can help determine which policy better suits your business, or if you need the coverage of both types. We will compare all plans and find the plan that offers the most coverage at the best price. To get free quotes, simply enter your zip code in the bar above, or to speak with one of our specialized agents, call 888-615-4893.
Businesses grow and change all the time, which means that, at some point, you might need to modify your commercial insurance policies. While your policies are contracts, they are not completely set in stone. An insurance endorsement can add, take away, or exclude certain types of coverage. While some endorsements are added by your insurance company to minimize their risk, others can be beneficial because they allow you, the business owner, to customize your policies, which could save you money. For example, if you find that your policy has something that you do not need, you can request an endorsement to remove it. On the other hand, there might come a time when you need to extend your policy so that your business is fully covered. In this case, you can request an endorsement to add certain types of coverage.
Endorsements Explained
Endorsements are documents that are attached to your original insurance policy and are only good for that particular policy’s period. Some endorsements are added by your insurance company and can either exclude certain things from being covered or clarify what is covered by a policy. For example, some commercial property insurance policies have a wind and hail deductible endorsement, which requires you to pay a separate deductible in the case of wind or hail damage, while some general liability policies have exclusions for damages resulting from exposure to asbestos. Some endorsements clarify what is covered, such as a professional service exclusion, which makes clear that your general liability policy only covers bodily and property damage, not damage caused by professional advice.
As previously mentioned, other endorsements are additions that you can request for your policy. These changes can allow your business to grow and change while still remaining fully covered by your insurance policy. For example, if you change your business’s address, add another location, or add a new product, then you can make changes to your policy without the risk of losing insurance coverage.
Common Endorsements
There are some common endorsements that you might want to consider for your business:
Adding locations and increasing your limits can be done with adding endorsements to provide more liability coverage.
Additional Insured– This is most often paired with a general liability insurance policy and allows you to add a third party to your policy, such as a subcontractor who is doing work for you.
Adding/Changing Location– You can request endorsements to make administrative changes to your policy, such as a change of address or a change in the policyholder’s name. You can also add locations to your policy coverage; this will protect your new location and your current location.
Extended Reporting Period– This will give you the ability to report claims after the expiration date of your insurance policy on a claims-made professional liability policy, or on an error and omissions insurance policy.
Increased Limits– This endorsement allows you to increase your limit of liability for your business property, as well as to extend workers’ compensation benefits not covered by state law.
Industry-Specific Endorsements- You can also add coverage that is specific to your industry with certain endorsements, such as a contractor’s enhancement endorsement. These endorsements will cover equipment, property, and other tools specific to your industry, and at a cheaper rate than if purchased individually.
Adding An Endorsement
Adding endorsements to existing policies is a great way to continue your coverage as your business continues to grow. You can personalize your policies to add endorsements that fit your business’ needs. Adding them is easy: simply speak to your current agent, and ask that they be added when your policy renews, or when you are shopping for a new policy.
It can be confusing to know just how much coverage you need for your growing business. EZ.Insure specializes in breaking down your needs and your risks. We will provide you with a trained, licensed agent who will compare business insurance quotes in minutes. We aim to find you the most coverage with the most savings, all at no cost to you. To get free quotes, simply enter your zip code in the bar above, or to speak directly with an agent, call 888-615-4893.
You have probably heard or read about something like this in the news- a large company is hacked, leading to a major data breach. For example, not too long ago, big box store Target was the victim of a hacker, and thousands of customers had their sensitive information exposed. Fortunately for big companies like Target, they are large enough to survive a cyber liability lawsuit. Unfortunately, many small businesses aren’t so lucky. In fact, more than 60% of small businesses go under within 6 months of a cyberattack. Cyber liability breaches (and claims) come with expensive legal settlements and large fines, not to mention damage to your reputation and brand. It is important to have the right cyber liability insurance policy, because recovering from a cyber security breach can drain your business’s time and money.
How Much Can Cyber Claims Cost Your Business?
A data breach can cost your business thousands, even millions of dollars.
Data breaches can cost your business an enormous amount of money. There is a lot you need to do in the case of breach, which all adds up. You have to notify all of your customers whose information was affected as soon as possible (as required by state law). You must also investigate and correct the breach, which can cost a lot of money, and take months or even years. A study from the IBM/Ponemon Institute found that data breaches cost businesses $242 per stolen record on average. That means the average U.S. data breach costs more than $8 million.
The reason cyber liability claims cost so much is that they include the costs of:
Finding and repairing the cause of the breach– Hiring an expert can cost anywhere from $200 to $2,000 per hour.
Notifying customers– Contacting the affected parties can cost anywhere from $1 to $5 per notice.
Credit monitoring for affected customers for two to three years– This can cost anywhere from $10 to $30 per individual, and needs to continue for at least 2 years.
Fines or penalties
Client’s financial losses if you are sued– The average cost for legal defense is $740,000, while the average legal settlement is about $2 million.
Defense costs and legal fees
What Cyber Liability Insurance Covers
While some small business owners might think that cyber liability insurance is only necessary for big companies, this couldn’t be further from the truth. Any business, no matter the size, can be hacked, and a network failure or breach can end up costing you hundreds of thousands of dollars. Any business that operates online and handles sensitive information needs cyber liability insurance. For example, if customers use credit cards to pay for your services on your site, then you are at risk of a breach.
Cyber insurance provides protection for your business from financial losses as well as the cost of data loss to your customers. It covers:
Cyber Extortion– If a hacker accesses your database and is holding it for ransom, cyber liability insurance will help recover those losses.
Forensic Support– Your policy will cover investigation-related expenses and consultation fees.
Legal Fees– Cyber liability insurance helps pay for legal help and advice when dealing with a lawsuit brought by clients or staff.
Business Interruption– A data breach affects your day-to-day operations, which leads to additional losses of income and revenue. Cyber liability can help cover these losses.
Different Cyber Liability Insurance
There are two kinds of cyber liability coverage:
First-party cyber liability insurance covers costs from a cyberattack or data breach on your own network or systems.
Third-party cyber liability insurance protects businesses from lawsuits related to a cyber incident that affects a client.
Cyber liability insurance might seem pricey, but when considering the cost of cyber liability claims, it is a necessary expense. If you are worried about the cost, remember that there are many different plans that can be tailored to your specific business and needs. You can choose how much coverage you need and how much you can afford to spend. Most business owners add first-party cyber liability insurance coverage to their general liability policy, so you might be able to get a deal if you bundle your policies.
If you are interested in cyber liability insurance, and do not know where to start or what type of coverage you need, EZ can help. EZ.Insure understands just how important it is to protect customer’s information. We will provide you with an agent to help you find the right plan to fully cover you and protect your customers’ privacy. Your agent will compare quotes from all plans available in your area, and find the best plan at the best price. Even having the best cybersecurity does not completely eliminate the risk of a data breach, so it is best to protect your business with insurance. To get instant free quotes, simply enter your zip code in the bar above, or to speak directly to an agent, call 888-615-4893.
When you own a small business that offers advice or services, there’s always a risk of lawsuits due to errors and omissions. Even if you have done your job to the best of your ability, something can still go wrong. Sometimes customers just aren’t happy with your work, and they could decide to sue your business. However, a lot of errors and omissions (E&O) claims can be resolved before they become costly lawsuits. In order to prevent, or quickly resolve, any errors and omissions claims made against your business, you have to know what to expect. Here are the most common errors and omissions claims:
Breaking your contract can result in your customer losing money, in which they can sure you for.
Breach of Contract
If you have a verbal or written contract with a customer, you have to adhere to that contract. If a customer suffers any financial loss due to a breach of contract on your part, they can sue to recover their financial loss. For example, if you missed a deadline to put up a website for a company you’re under contract with, they can sue you for any money that they are losing while the site isn’t up and running. The types of breach of contract include:
Anticipatory breach– a business tells the customer that they will not be fulfilling the terms of their contract
Minor breach– a business fails to live up to a small detail in the contract.
Material or fundamental breach– a breach that is extreme enough to nullify the contract completely.
Misrepresentation
One of the biggest mistakes that businesses can make is overstating their expertise, promising their clients something they cannot deliver, or not fully disclosing information. If your company misrepresents itself or doesn’t disclose information, resulting in financial or reputational loss to the customer, then you can expect a lawsuit to follow. The lawsuit will be labeled as intentional or fraudulent misrepresentation. For example, if a car dealer lies about the history of a used car and their customer later finds out their car was in an accident, this would be considered fraudulent misrepresentation.
If you lie or even partially lie, then you can be sued for misrepresentation.
If you’re not careful, you can be slapped with a lawsuit, no matter whether you have intentionally or unintentionally misrepresented your company. E&O misrepresentation claims can include:
Making a statement that is partially true.
Making a statement that is completely false.
Omitting details, or failing to disclose important information.
Negligence
Claims of negligence often occur when a business’ poor oversight leads to financial or even physical injury of another party. You could also be considered negligent if you communicate poorly with your customer, or if you fail to take reasonable care or control when providing your services. Even if you fully explain your prices and expected outcomes, a customer might form unrealistic expectations for your work. If you don’t meet their expectations, they might sue you.
Create a detailed contract that both parties review and sign before work begins. Include expectations about deadlines, payments and any other agreed-upon expectations between you and the customer.
Make sure that you document everything that you’re doing so that you can prove you are getting the work done.
Always keep an open communication with your clients, especially if something goes wrong while you are under contract, or if there is a minor glitch. Prioritize honesty and transparency with your customers and let them know if you are going to miss a deadline, so you can manage expectations and work together to solve the problem.
Errors and omissions insurance is the best way to protect your company from a lawsuit and reduce the risk of losing your business because of a mistake. If you are sued, E&O insurance will pay your legal costs such as attorney’s fees, court fees, and settlement costs. As long as your policy is active at the time of the incident, you will be protected. You do not want to wait until something happens in order to be insured. Make sure that your business is fully protected in the event of an incident by speaking to an EZ agent. To find an affordable plan that gets you the most coverage with the most savings, enter your zip code in the bar above, or to speak directly to a licensed agent in your area, call 888-615-4893.
Seeking for advice for your new business? EZ.Insure provides not only ease with insurance, but also these simple guides. Reading them should arm you with the knowledge you’ll need to navigate the business world, like what our policies cover. Curious about more than just a Business Owner’s Policy? See our Business Insurance Masterlist and our Beginner’s Guide to Worker’s Compensation. Here, we’ll take a look at what our Business Owner’s Policy (BOP) covers, application times, and costs.
Want to start your workday with a smile? Think of the ways you set yourself up for success like coverage.
What is a Business Owner’s Policy?
So, what defines a BOP? One of the most important types of coverage, or at least the most useful for the business owner, is this policy combining both liability and major property insurance. With the combination, both policyholder and insurance company can benefit. The choice of what you actually want to combine is up to you. Here are your options:
General liability
Property liability
Business Income/Interruption
Cyber insurance
The above coverage types extend protection should any property damage, bodily harm, or income loss happen to your company. No one ever wants these types of things to happen, but it is always better to be prepared just in case.
Without a Business Owner’s Policy, you take the financial brunt of any misfortune happening on your company property, including cyber theft. Take for instance if while at your businesses someone slips on a cracked floor and breaks an ankle, if you do not have a business owners policy, and a lawsuit ensues, you will be responsible for any reparations, plus the loss of when you have to shut down for repairs.
When Can You Apply?
The short answer is now! There is no open enrollment for a Business Owner’s Policy. However, you may ask your agent about special offers, especially if they are time-dependant With EZ.Insure, your agent will make sure to get you the best policy for exactly what you need. The best time to apply is when you feel you need coverage.
New products? If you’re moving up in business, you might consider new coverage.
If you feel you are ready for a Business Owners Policy the next step is to reach out to an agent to have any questions answered and get a quote for different types of coverage. You can reach an EZ.Insure agent at PHONE NUMBER. Before you call, write down what you think will be right for your business. If you hold most of your information online, we would suggest adding cyber liability insurance, or, if your business is mostly physical property and equipment, property liability would be best. Taking a small amount of time to take note of your assets will make your application process smoother.
What Is Not Covered?
A Business Owner’s Policy does cover quite a bit, but there are exceptions. Worker’s Compensation and Professional Liability are not covered in a BOP but are solid policies to hold. Remember, Worker’s Comp is mandatory in most cases, but Professional Liability is not. While these are not included in the BOP, be sure to do your research if your company has a high risk for malpractice suits. People make mistakes, but certain professions like doctors need extra protection with insurance.
What Are the Costs of a Business Owner’s Policy?
The average cost ranges between $30 to $200 per month. Of course, this will vary based on your needs. Ask your agent to help keep costs down. Also, keep in mind that while this may seem like an extra bill per month, the median cost of just one business lawsuit is $54,000. That’s the price of a good car. Can you afford a surprise purchase like that? To make matters worse, millions of cases pass through U.S. courts annually. Do you like those odds?
Talk to your friends in the business. What advice could they give you about their own coverage?
The process can be easy enough, especially with an agent on your side. They will have the most up to date information about what level of coverage your company really needs to keep you safe, but not overspending.
EZ.Insure is here to help. Your agent will answer any questions you have, compare different plans for you, and even sign you up when you’re ready, free of charge and without having to worry about being hounded by endless calls. To get started simply enter your zip code in the bar above, or you can speak to an agent by emailing [email protected], or calling 888-350-1890. EZ.Insure makes the entire process easy, and quick.
