Over the past year, COVID-19 has totally transformed the way that businesses operate. We’ve weathered the initial storm of uncertainty and ushered in a new normal for risk management. But as the pandemic continues to evolve in 2021, many small business owners are still unsure of the implications for their insurance policies.
You probably have a lot of questions. Are you covered? What happens if you’re not?
To help you navigate this unprecedented landscape, we’re sharing the top three things business owners need to know right now to protect their business.
1. Know That You May Not Be Covered
Don’t assume that your current insurance policy covers all of the possible scenarios that you’re facing today. Some disasters, namely pandemics, are not covered by business interruption insurance. (Learn why this is actually a good thing for policy holders.)
Other types of risks might be newly relevant for your business. Even if there are policies that can cover them, you may not have opted to purchase those policies when they were less likely to affect you. Keep reading for our recommendations on which policies to ask your provider about.
2. Know the Three Levels of Risk Mitigation
Even during the best of times, operating a business means taking on risk. Running a business during a global pandemic comes with even more risk. Your insurance provider’s job is to help you assess those risks and mitigate them.
When assessing risk, think about bucketing them into three categories:
- Risks from third parties: Movers, cleaners, meeting planners, and many other vendors all expose your business to risk. Make sure that they have proper insurance, and in many instances, name your company as “additionally insured” on their
- Risks that don’t require coverage: You might be surprised to hear an insurance provider tell you not to get a policy, but we believe that businesses should only pay for the coverage they need. Take a closer look at these three policies to see if they’re necessary for your company or not.
- Risks that require coverage: This is the bulk of risk inherent in doing business. But think beyond simple liability insurance. Consider other exposures, such as mistakes (errors and omissions) and an umbrella policy to better cover all your liabilities. More on this below.
3. How Can I Get Covered?
Take these questions to your insurance broker and find out if you’re covered. If your current policy doesn’t cover you, they can help you identify the best way to mitigate your risk.
Business Interruption Insurance
If your business needs to shut down at any point during the pandemic, you need to know what is and isn’t covered by your insurance policies.
- Do you have business interruption insurance?
- If you do, do you know what is included? Keep in mind that you most likely will not be covered for pandemic-related losses. For a refresher on what is typically covered by these policies, check out our recent blog on business interruption insurance 101.
If you don’t have business interruption insurance, consider getting it. Fires and floods are much more likely to happen than another pandemic, so it’s wise to be prepared for these more commonplace disasters.
When you originally set up your general liability policies, your business’s operations likely looked very different than they do today. We recommend taking another look at your business liability insurance to ensure it covers the risks you’re experiencing today.
- Do your general liability and workers compensation policies cover employees when they’re working from their homes?
- Are you taking on any extra cybersecurity risks when your employees are conducting business online, on their home wifi networks?
The pandemic is first and foremost a health crisis, so your employees’ health should be top of mind. Take a closer look at your health insurance policies and make sure to address the following questions:
- Do you have short term / long term disability insurance? Does it adequately cover your employees’ welfare? Does it reduce risks and costs for the business?
- If your employees test positive for COVID-19 and need to take sick leave, is that covered under your current policy?
- If COVID-related leave is not covered, what sort of risks will you be taking on? What will it cost you? Are you at risk for lawsuits?
Errors and Omissions
Errors and omissions policies are a type of professional liability insurance that protects your business against lawsuits for negligence or mistakes in client work. With employees working from home instead of the office, many of the oversights against mistakes may be harder to administer. It’s best to take the extra step and mitigate this risk.
- Do you have an errors and omissions policy?
- Does it cover you when employees are working remotely?
- What kind of mistakes are covered? What is unique to your business?
Commercial umbrella insurance policies supplement your other liability coverage. If you go over your coverage limit, your umbrella insurance policy will kick in to make up the difference. Having this extra layer of coverage can protect you from large lawsuits or scenarios where multiple claims exhaust your base policy’s limits.
- Do you have an umbrella policy?
- What is included in the umbrella policy? What is excluded?
- What is your umbrella limit? Are you carrying the right amount of coverage?
Cleary Insurance is committed to helping small businesses identify, offload, and mitigate risks. If you’d like to speak with a representative, we can help you find exactly the right level of commercial insurance coverage for your business needs during the pandemic and beyond.