Most business owners understand the importance of property and liability insurance to protect physical locations and assets from hazards like fire, flood, or theft. Those protections are important, but they don’t cover every financial risk a business can face.
Below are several commonly overlooked types of coverage that can help protect a business from significant losses.
Examples of lesser-known coverages
- Company vehicle contents: Service vehicles often carry expensive tools and equipment that a standard auto policy may not cover if items are lost or stolen.
- Tenant property improvement insurance: If you lease a space and invest in build-outs or interior improvements, those tenant-made improvements may not be included in a landlord’s policy.
- Home-based business equipment: Many people keep business equipment at home and assume homeowner’s insurance will cover it, but that coverage is often limited or excluded for business use.
- Business interruption insurance: Natural disasters or other large-scale events can halt operations for weeks or months, and interruption coverage helps replace lost income and ongoing expenses during recovery.
- Key person insurance: When a business relies heavily on one or a few individuals, key person coverage can provide funds if an essential employee dies or becomes seriously disabled.
If your employees work on the road and vehicles carry tools or equipment, consider a policy tailored to those exposures such as Business Auto Insurance.
If you rent space or are unsure how tenant improvements are treated under your current policy, reviewing commercial coverage options can help; see Why Commercial Business Insurance is a Must-Have for SMEs for more on commercial policy components.
To protect against lost income after a covered physical loss, look into interruption coverage as part of your business continuity planning; additional background is available at Loss of Business Income/Eldercare Insurance.
Because every business is different, coverage needs vary with operations, locations, and assets; discuss options and limits with an insurance professional, or talk to an agent to review your situation.
Frequently Asked Questions
Will my regular business property policy cover equipment in company vehicles?
Often it will not; tools and business equipment in vehicles may require a specific endorsement or a separate policy such as commercial auto or inland marine coverage.
Does homeowner’s insurance protect business equipment kept at home?
Homeowner’s policies commonly limit or exclude business property, so a business owner should consider a business insurance policy or a rider for home-based equipment.
What does business interruption insurance actually pay for?
It typically covers lost income, continuing payroll, rent, and certain operating expenses while the business recovers from a covered physical loss.
When is key person insurance appropriate?
Key person insurance is appropriate when a company’s revenues or operations would suffer materially from the loss or long-term disability of a critical employee.