As long as there have been people doing business, there has been associated liability risk. Some of those risks have remained constant for decades while others have evolved and/or grown over time.
As long as there have been people doing business, there has been associated liability risk. Some of those risks have remained constant for decades while others have evolved and/or grown over time.
Today, with the widespread use of technology, the far-reaching global economy, the mainstreaming of social media, and, last but not least, the ease with which anybody anywhere can file a lawsuit, there is a whole new growing and emerging list of liability and security risks for your company to plan for.
At Austin Insurance, we provide coverage for both the risks that have stood the test of time and those that, unfortunately, seem to be increasingly prevalent, like cyber-crime. To safeguard the financial stability of small to mid-sized companies, here are the four key coverages that we believe every business owner should consider including in their risk management plan:
- Commercial General Liability (CGL) – CGL is one of the two main categories of business insurance that almost every company requires – the other is commercial property in case you were curious. Why is CGL so important for practically every type of company? Partly because it is the most comprehensive form of business liability insurance. While it doesn’t protect you against every risk your business could face, it does provide extremely broad coverage for bodily injury, personal injury and property damage that is caused by your business operations or products, or that happens on your business’ premises. If you are found liable for any of these types of situations, CGL coverage is designed to cover your costs (up to the maximum indicated in your policy), including any expenses related to defending your business in the event of a lawsuit. This liability coverage also extends to medical payments for injured parties, for which you may be held responsible.
- Professional Liability – While not every business requires professional liability coverage, it is very rare that we come across an organization that doesn’t provide advice, products, or services to their clients or customers. From real estate agents and appraisers to lawyers and accountants, to hairdressers and landscapers, a majority of the South Shore’s local businesses might be putting themselves at significant risk if they don’t carry professional liability insurance. That’s because there is always the possibility that the people you serve will feel dissatisfied or misled, or even worse, experience an injury or illness as a result of an interaction with your company or your product. The main purpose of this important coverage is to provide protection for things typically not covered under your CGL policy, such as claims against you for negligence, misrepresentation, violation of good faith and fair dealing, and inaccurate advice. Depending on your distinct operation, your professional liability protection might need to include General Errors & Omissions, Technology Errors & Omissions, or Directors & Officers.
- Employment Practices Liability – Discrimination, harassment and retaliation claims in the workplace are certainly not new to the business world; however, these issues are being addressed more openly than ever before, and rightfully so. With the dawning of the #metoo era, charges of sexual harassment, in particular, are on the rise for the first time in almost a decade. Should your company be faced with an employee claiming discrimination or harassment, obviously there are many things for you to be concerned about, not just the financial repercussions. However, it is critical to prepare for the potential financial toll of such a claim on your company. According to the Equal Employment Opportunity Commission (EEOC) employers of all sizes have paid out nearly $1 billion to settle harassment charges filed between 2010 and 2017. This amount does not even include any monetary payments that companies may have been required to pay to plaintiffs as a result of litigation. At Austin, we encourage all our business owners to look closely at getting Employment Practices Liability Insurance (EPLI), which provides coverage for legal costs, settlements, and judgments that arise from claims ranging from age/race/gender-based discrimination to sexual harassment to wrongful termination. EPLI is also designed to protect you and your company against employee claims of emotional distress or mental anguish, invasion of privacy, libel or slander, breach of contract, violation of the Family Medical Leave Act, and much more.
- Cyber Liability – In a 2018 Data Breach Investigations Report, Verizon found that 58% of all cyberattacks target smaller businesses. Sure, the ultimate reward for cybercriminals might not be as high by targeting your business versus a multinational firm; however, your organization probably looks like a much easier target to hackers. Should a data breach happen to you, the cost of clean-up can be astronomical, averaging over $1 million for small and middle market companies. How long do you think you could sustain your business after taking such a financial hit? For most companies your size, it’s not much more than a few months. Even if you have a cybersecurity strategy, there’s no guarantee that it is foolproof. For these reasons and more, having cyber liability insurance today is critical. This policy covers the financial repercussions of several types of cyber threats including the loss or corruption of data, whether by a cyberattack or if a smartphone or laptop is lost or stolen. It also provides financial protection in the event of business interruption, identity theft, or cyber extortion as well as for reputation recovery activities.
While you can purchase these coverages, and other liability solutions, as stand-alone policies, the team at Austin may be able to find a more economical option for you. Depending on what type of coverage you need, and how much, we could potentially include most of the liability insurance you require in an insurance package, such as a Business Owners Policy (BOP) or a Commercial Package Policy (CPP).
You can count on Austin to identify the optimal liability coverage possibilities for you and your budget and to make sure you understand all of them. That way, you can select the options that are best for your business in light of today’s most pressing risks as well as those that may emerge in the future.
