Top 10 Business Insurance FAQs

1. What type of liability coverage do I need?
Business insurance should never be approached with a “one size fits all” mentality. For every individual business, there will be a unique set of needs and a correct strategy for protecting the operations and assets of that business. For instance, virtually every business needs General Liability coverage to protect against accidents and injuries that may occur. Additionally, coverage for Professional Liability, Errors & Omissions,
Directors & Officers, Completed Operations or other specific coverage may be necessary. Consult with your ​risk management advisor to seek the best fit for you.

2. How should I insure the vehicles I use for my business?
Many business owners utilize their personal vehicle on occasion to perform tasks for their business. If this is true for you, then you should have the vehicle(s) rated on your personal auto policy for “business use.” This means that the vehicle will enjoy coverage even when it’s being used for business purposes. A Commercial Auto policy is necessary when a vehicle is owned by a business, or is primarily used for business purposes. Additionally, “Non-Owned Auto” and “Hired Auto” are critically important options to add, as they provide liability protection when an employee uses their personal vehicle to perform business tasks, or a vehicle is rented for business use.

3. What is an Umbrella policy, and why do I need one?
A Commercial Liability Umbrella policy, commonly called simply an “Umbrella”, provides an extra layer of protection above and beyond your other business policies, like your Business Owner’s Policy, Inland Marine Policy, etc. The Umbrella policy provides excess coverage above the policy limits of all underlying policies, in
increments of $1M. Additionally, the Umbrella policy provides coverage for legal counsel and related expenses. We always recommend our clients carry an Umbrella policy, as its cost to benefit ratio is highly favorable to most businesses.

4. Why do I need workers compensation insurance?
Texas is one of only two states without blanket mandatory workers comp requirements for employers. However, any business that chooses to opt-out of providing workers comp insurance for its employees is automatically electing to self-insure for any and all claims for work-related injuries made by employees. Unlike other types of claims, there is no limit of liability for workers comp claims. An employee may
be entitled to an indefinite regular payment for damages if no workers comp insurance is held by the business. For this reason, carrying proper workers comp insurance should be considered mandatory for all businesses with employees.

5. Am I protected if I make a mistake in business?
Although no one ever intends to make a mistake that ends up costing their customer money or causes them damage, unfortunately things do happen occasionally. This is why Professional Liability Coverage is so important for business owners to carry. This coverage is also sometimes called errors and omissions or malpractice insurance, depending on your industry. Professional Liability coverage protects you against the
financial responsibility for financial losses or damage suffered by your customer as a result of your mistake or oversight.

6. What if my company gets hacked or has a loss of data?
Almost everyone has heard about the data breaches suffered by large companies like Target, Bank of America and Yahoo!. These data breaches can result in the theft or loss of sensitive personal information of a business’ customers, including username and password information, credit card numbers, social security numbers, and more. For any business that interacts with a customer’s data in a digital format, it is imperative that Cyber Liability Coverage be carried by the business. Cyber Liability protects a business from the direct and indirect costs associated with a data breach. Direct costs are things like reimbursement for expenses causes by the data breach, and indirect costs are things like public relations and legal expenses experienced by the business.

7. What happens if my business partner dies unexpectedly?
For any business with more than one owner, it is extremely important to have an agreement in writing for what will happen if one of the owners should become disabled or deceased. This agreement would be drafted by a lawyer, and is typically funded by disability insurance and life insurance. In the event of a disability or death of one of the owners, the insurance policy would pay an agreed amount to the other
owners, thus buying out the disabled or deceased owner.

8. Am I at risk when my employees are driving their own car?
Many small business owners think of their employees as their friends. This can cause complications when an employee’s actions bring risk to the business owner. An example of this is when an employee is operating their personal automobile during the course of their job (I.e. running an errand, meeting with a customer). In the event of an accident, the business owner would likely be drawn into a lawsuit. Carrying the Non-Owned Auto endorsement on your policy protects the business owner from any losses caused by a vehicle operating on behalf of the business, but not owned by it.

9. Am I protected if one of my employees sues me?
Unfortunately, the world has become a very litigious place, and it has become much more common for employees to accuse their employers of discrimination of various kinds. Employment Practices Liability Insurance (EPLI) protects a business owner from accusations of discriminatory hiring practices, a hostile work environment, and more.

10. Is my ________ covered by our policy?
Is it imperative that your business is protected by a highly trained and experienced expert. A professional insurance agent and risk manager will know all of the right questions to ask to help you secure the right coverage for your business. Optional coverage include lost business income, mechanical failure, spoilage, and much more.