Most business owners agree it’s important to maintain insurance to protect business assets. When they think about insurance, owners typically consider protection against hazards such as fire, flood or theft at their company sites. Those are important protections, but there are other types of risks that may be less obvious yet just as costly. Here are five examples that underscore the need for broader business insurance protection.
Company vehicle contents
If you operate a business with employees on the road making service calls, there is likely valuable equipment in company vehicles. A typical personal auto policy usually does not cover the contents of a company vehicle if that equipment is lost or stolen. Consider reviewing options like Business Auto Insurance to make sure tools and equipment carried in vehicles are protected.
Tenant property improvement insurance
Do you rent space to conduct your business and have you built out the interior or made improvements to suit your needs? Those tenant improvements can represent a considerable investment, and many property insurance policies don’t include the value of improvements made by a tenant to the existing structure. It’s worth securing coverage to protect those investments—see Small Business Insurance for common options.
Home-based business equipment
More people are working from home at least part of the time, even if they maintain an office or site elsewhere. Many assume homeowner’s insurance will cover business equipment kept at home, but homeowner policies generally exclude or limit coverage for business property. If you have expensive equipment at home, consider purchasing additional protection for those items.
Business interruption insurance
Natural disasters, fires, or widespread disruptions can bring a business to a standstill for weeks or months. Business interruption insurance can help cover lost income and fixed expenses while a business recovers, providing a way to get back on its feet after a covered event.
Key person insurance
In many companies, the knowledge and skills of one person or a few individuals are essential to the enterprise’s success. Key person insurance can help a company recover if an essential employee dies or becomes disabled for a lengthy period, providing funds to allow the business to continue operating during a search for a successor or while the person recovers.
As you can see, there are many hazards businesses face that aren’t covered under a typical insurance policy. Since you invest significant time, money and effort into your business, it pays to confirm you have the protection you need. For a consultation, talk to an agent.
Frequently Asked Questions
Does a regular auto policy cover tools in a work vehicle?
Often it does not; tools and business equipment carried in work vehicles may need a commercial auto or inland marine endorsement to be covered.
Will my renter’s insurance cover tenant improvements I paid for?
Renter’s and many property policies may not cover tenant improvements unless specifically added, so consider a policy or endorsement that protects those investments.
How can I insure expensive equipment I use at home for work?
Homeowner policies typically limit coverage for business property, so look into a business owners policy or a specific endorsement for equipment used at home.
What does business interruption insurance actually pay for?
It generally covers lost revenue and ongoing expenses (like rent or payroll) when a covered event forces a business to suspend operations.
When is key person insurance appropriate?
It’s appropriate when the loss of a single individual would cause financial hardship or disrupt operations significantly, and it can provide funds during transition or recruitment.