(BPT) - It's that time of year again. Time to renew the commercial insurance policy for your business. When it comes to commercial coverage, liability and property coverages are common but sometimes they're not sufficient to protect your business from common risks.
'We're seeing several claims from business owners who incorrectly assumed that their traditional policies covered them for things like cyber breaches or employee theft,' says Brittney Passini, commercial lines product director with Acuity Insurance. 'Unfortunately, that's not always the case.'
With 2022 Acuity data showing commercial claims at a five-year high - up about $3,000 per claim from 2021 and record inflation squeezing businesses tighter - it might be beneficial to put more thought into your commercial coverage this year.
As you think about renewing your insurance policy, consider these four commonly overlooked coverages:
With larger businesses investing in cybersecurity tools, hackers are increasingly targeting small and medium-sized businesses. In 2021, the FBI's Internet Crime Complaint Center received 847,376 complaints about cyberattacks and malicious cyber activity with nearly $7 billion (about $22 per person in the United States) in losses, most of which targeted small businesses.
Cybersecurity insurance typically packages cyber liability and data breach coverage. Cyber liability coverage pays if you're liable for unintentionally spreading malware, and data breach provides coverage to respond to accidental loss or release of customers' personal and identifying information.
2. Business income and extra expense
After a fire, windstorm or other property loss, a business owner's immediate focus is usually on repairing buildings and replacing lost inventory. Until those repairs are made and customers start coming back in the door, retailers also may suffer loss of income. This loss of income is not normally covered by a basic business property policy. Business income coverage helps bridge the gap, and extra expense coverage pays for added costs needed to resume operations. Without these additional coverages, businesses that endure a property loss may not have enough capital to keep their business running. While property insurance covers the physical damage, business income and extra expense coverage helps bridge the gap by providing funds to replace the income that is lost while the physical property damage is being restored as well as cover additional expenses, such as rent.
3. Employee dishonesty
A recent study from Zippia shows that 75% of all employees steal at least once, including cash, merchandise and business property. The same study shows that an average of 5% of an organization's revenue is lost each year due to employee theft, which isn't covered in typical business property policies. Employee dishonesty coverage protects you against employee theft of money, securities or property.
4. Peak season
While these busy seasons can vary depending on your industry, most businesses experience a few months each year that are busier than most. While some businesses carry extra inventory or have extra staff on hand during these busy months, many business owners overlook these times when setting limits on their property policies. Peak season coverage increases the limit of your business personal property during these times, without needing to carry a higher limit all year.
Ultimately, Passini recommends a collaborative approach to ensure your business is adequately covered.
'Don't fall into the trap of making assumptions about coverage,' Passini says. 'Work with an independent insurance agent who's dedicated to understanding your business and can provide the right coverages, limits and discounts to fit your business's needs.'