July 2024 Newsletter: Business Insurance Essentials

As we navigate the complex world of business in 2024, understanding business insurance essentials has never been more crucial. Whether you’re a tech startup founder, a small business owner, or the CEO of a growing corporation, knowing how to properly insure your business can mean the difference between thriving through challenges and succumbing to unforeseen risks.

In this newsletter, we’ll dive deep into the essential facts every business owner should know when purchasing insurance. We’ll cover key types of coverage, important considerations in the selection process, and emerging trends that could impact your insurance decisions. Our goal is to equip you with the knowledge you need to make informed choices about protecting your business.

So, let’s embark on this journey through the world of business insurance essentials and explore how you can safeguard your company’s future.

Let’s get into it.

What’s Going On?

Types of Small Business Insurance — Forbes | In this article from Jason Metz, Forbes explores every type of business insurance that organizations large and small should know about. From Business Liability to Cyber Liability and Worker’s Compensation, this article gives owners and founders everything they need to know.

A Guide to Business Insurance — Business.com | This comprehensive guide from Business.com dives into business insurance essentials, what it does for companies, who needs it, and much more. A foundational article for any business owner, David Gargaro dives deep into the world of business insurance.

The Ultimate Guide to Small Business Insurance — Embroker | Oh, how’d this get here? Well, this article from Embroker gives small business owners the specifics on their insurance needs. We talk about whether or not insurance is legally required to run a business, what you need, what it might cost, and even where to get it.

Understanding Basic Coverage Types

The Foundation of Business Protection Every business, regardless of size or industry, needs a solid foundation of insurance coverage. We’ll explore the must-have policies, including general liability, property insurance, and workers’ compensation.

Cyber Insurance: No Longer Optional in the Digital Age With cyber threats evolving rapidly, we’ll discuss why cyber insurance has become essential for businesses of all sizes and what it typically covers.

Professional Liability: Protecting Your Expertise For service-based businesses, we’ll explain the importance of professional liability insurance (also known as errors and omissions insurance) and how it safeguards your business from claims of negligence or failure to perform.

Business Interruption Insurance: Lessons from Recent Global Events In light of recent global disruptions, we’ll examine how business interruption insurance can provide a financial lifeline during unexpected closures or disruptions.

Business Insurance Essentials: Key Considerations

Here are a few tips for business owners when buying or assessing their insurance coverage:

• Assessing Your Risks: How to identify and prioritize the specific risks your business faces, ensuring you get the right coverage. Check out our attached Risk Management Plan Template, a great resource to help business owners understand where their risks are.
• Understanding Policy Limits and Deductibles: In a recent newsletter, we broke down these crucial elements of insurance policies and how they affect your coverage and premiums.
• The Importance of Regular Policy Reviews: As your business grows and changes, so do your insurance needs. Policies should be reviewed at least annually to ensure that you’re covered for evolving and new risks your business may be facing. But, maybe more importantly, keep an eye out for developments in business risk. If you’re ever wondering, “am I covered for that?”, it’s time to review your policies.
• Bundling Policies: Explore the potential benefits and time savings of bundling multiple insurance policies with one provider, or applying for larger coverage programs. Whether you’re just looking for one policy or for comprehensive coverage, exploring the option of holistic coverage is important for every business owner to confirm that they are protecting themselves from all sides.

Industry-Specific Insurance Needs

As a business owner, you may not be aware that there are industry-tailored options for insurance coverage. Specific policies make more sense for one industry than others, as do larger programs of policies that protect businesses and industries from current and emerging risks. In this section, we’ll go through a few industries and the foundational policies that support their risk profiles.

Technology Companies:

1. Cyber Liability Insurance: Essential coverage for data breaches, network security, and privacy issues.
2. Technology Errors & Omissions: Protecting against claims related to your tech products or services.
3. Intellectual Property Insurance: Safeguarding your innovations and ideas from infringement claims.
4. Business Interruption Insurance: Covering lost income due to tech-related disruptions or outages.

Startups:

1. Directors & Officers (D&O) Insurance: Protecting leadership from personal liability.
2. Employment Practices Liability Insurance (EPLI): Covering claims related to hiring, firing, and workplace issues.
3. Cyber Insurance: Essential for startups working remotely, in-office, or operating their services digitally.
4. Venture Capital Asset Protection: Safeguarding against investor lawsuits.

Law Firms:

1. Professional Liability (Malpractice) Insurance: Protecting against claims of negligence or errors in legal services.
2. Cyber Insurance: Covering data breaches involving sensitive client information.
3. General Liability: Protecting against common business risks like bodily injury or property damage.
4. Business Interruption Insurance: Covering lost income during unexpected office closures.

Financial Services:

1. Professional Liability Insurance: Protecting against claims of errors or omissions in financial advice or services.
2. Cyber Liability Insurance: Covering data breaches and cyber attacks on sensitive financial data.
3. Fidelity Bond: Protecting against employee dishonesty or fraud.
4. Business Property Insurance: Covering office equipment and important documents.

Consultants:

1. Professional Liability Insurance: Protecting against claims of negligence or failure to deliver promised results.
2. General Liability Insurance: Covering bodily injury or property damage claims at client sites.
3. Cyber Insurance: Protecting against data breaches involving client information.
4. Business Personal Property Insurance: Covering equipment used for consulting work.

Real Estate Agents:

1. Errors & Omissions Insurance: Protecting against claims of professional negligence or mistakes.
2. General Liability Insurance: Covering bodily injury or property damage claims during property showings.
3. Cyber Liability Insurance: Protecting against data breaches involving client information.
4. Commercial Auto Insurance: Covering vehicles used for business purposes.

Emerging Trends in Business Insurance

Several trends are shaping the business insurance landscape in 2024 that are having profound effects on coverage. While many of these trends are out of the hands of the everyday insurance coverage holder, awareness may help business owners prepare for possible changes to their coverage.

1. AI-Driven Risk Assessment: Insurers are using artificial intelligence to more accurately assess business risks and tailor coverage. As of today, this is a positive for business owners. Artificial intelligence is helping insurance carriers to gather and assess much more data and information, allowing them to develop more highly applicable and cost-effective policies.
2. Parametric Insurance Growth: This type of insurance, which pays out based on predetermined triggers rather than assessed damages, is becoming more popular. Basically, parametric insurance allows the policyholder to be paid a predetermined sum for losses resulting from an event that the insurance covers, rather than being paid out after an assessment of actual damages. The key benefit? Faster payouts.
3. Increased Focus on Cyber Resilience: Insurers are placing greater emphasis on businesses’ cybersecurity measures when underwriting policies. As the limits and losses for cyber insurance continue to skyrocket, insurers are looking at how business owners are protecting themselves from digital risks before they are insuring them. The idea is that if a business is doing more to protect themselves, an insurer may offer a discounted payment with the assumption that the business’ losses maybe lower.
4. Climate Change Considerations: Environmental risks are playing a larger role in insurance underwriting and pricing across various industries. While we are all experiencing this phenomenon differently, certain areas of the country are especially vulnerable. It is important for businesses to be aware of natural disasters and weather trends that may affect their operations, supply chain, and their personal safety.

What’s New from Embroker?

Upcoming Events, Stories, and More

Embroker Introduces Insurance Program for Consultants

Have you heard? We have a new insurance program that’s built exclusively for consultants. Our industry-tailored coverage addresses the specific risks consultants face, including cyber threats, mistakes, and general business exposures.

Ben Jennings Named to Forbes Advisory Panel for Small Business Insurance

We’re thrilled to announce that our CEO, Ben Jennings, has been appointed to the Advisory Board for Small Business Insurance at Forbes Advisor! This appointment is a testament to Ben’s exceptional leadership and expertise in the insurtech industry, and reflects Embroker’s dedication to revolutionizing business insurance through innovative solutions and customer-centric approaches.

Embroker Head of Claims on CrowdStrike, Microsoft, and Insurance Consequences

In the wake of the CrowdStrike/Microsoft outage, Embroker’s Head of Claims, Corrie Hurm, provides valuable insights on potential liabilities and implications for the insurance industry.

Like What You’re Reading? Check out the Embroker Blog for more.