Insurance Helps Keep Lansing Businesses, Employees Covered

If you own a business in Lansing, then you need to know the importance of having the proper types and coverage amounts of insurance that will cover your employees, staff and physical properties in case of an accident, health issue, etc. 

If you thought your business’ interests could be taken care of with only a single kind of insurance, then think again. There are many kinds of insurance to choose from and picking the right types for your business can be a complicated process for those unfamiliar with it.

Insurance for Businesses

“Most insurance falls into one of two categories,” said Bob Chapman, a principal at the David Chapman Agency in Lansing. Chapman has been in the insurance business for 42 years and has a degree in risk and insurance from Michigan State University. “Insurance is used to either insure your assets from loss by fire, theft, windstorm and other perils, or to insure your actions that may cause injury or damage to someone else.”

Not having the right kind of insurance or the right coverage is a big mistake that all businesses need to avoid. Otherwise, business owners could be looking at paying out millions of dollars if something unexpected happens. 

According to Steve Nichols, an account executive at Lyman & Sheets Insurance Agency with 25 years in the insurance business, business ownership means knowing the right kind of insurance to get for your company. 

“Business owners need insurance to cover leases, clients and employees, or whatever type of insurance is required by the contract they are working under. Business owners will also need to consider health insurance, disability insurance and any group benefits — STD, LTD, vision, dental and life insurance for employees,” said Nichols. “Businesses also should get Commercial Umbrella insurance, as this protects businesses and/or owners by providing higher coverage limits of insurance as their exposure to risk grows.”

There are also specialized types of insurance that some businesses need, which include:

  • E&O – professional liability
  • Employee dishonesty
  • Cyber
  • Crime
  • Employment practices
  • Fiduciary
  • D&O (Directors & Officers) and/or management liability (LLC)
  • Auto
  • Property of others
  • Foreign travel and exposure

Use an Insurance Professional to Choose the Correct Type and Amount of Insurance

So, how does a business owner know what kind of insurance to get? An important step is to meet with an insurance professional to discuss topics like what your business does, where it is going in the future, what kinds of equipment or vehicles it has, how many employees, etc.

Choose an insurance agent who is licensed and has a good record in the community with experience in your type of business. Nichols added, “Meeting with your agent and having discussions about the scope of your business, contractual obligations and exposure to loss is vital. Then, the coverages should be reviewed regularly: semi-annual at a minimum.”

The cost and amount of coverage for business insurance is also an important consideration and varies by industry, type of insurance, size of business being covered and more. According to Chapman, the amount of insurance a company gets depends on the business’ needs.

“Insuring the loss of physical assets is a matter of determining the cost to replace them. This is in addition to any loss of income or extra costs you will have until the assets are replaced,” said Chapman. “Insurance to cover liability issues such as injury or damage your actions might cause to others is tougher to figure, as there is no limitation on what a business could be responsible for if its activity injures someone. The amount of liability insurance involves looking at what you could lose financially, what is customary in your industry, what might be required by law or contracts and ultimately what allows you to sleep at night without worrying about it.”

Claims Change Over Time

Another consideration in choosing business insurance is that things in your business do change over the years. For instance, these days, there is a high rate of cybercrime, so having some type of cyber insurance is vital. Also, most businesses have a website. If hackers shut a website down, that means a loss in sales and even the compromise of your customers’ personal and financial data.

“Crime is different than it used to be,” said Chapman. “In the past, you had to protect your assets from a burglar or a robber showing up and taking your assets. Now crime comes to you from cyberspace. Every business needs to consider what happens if their data is stolen, compromised or destroyed; however, even though insurance is available to protect against cyber risks, most businesses still don’t have this coverage.”

Another type of claim that is predicted to increase is in the realm of sexual harassment.

“There will be many companies that will face employment lawsuits over workplace sexual harassment,” said Nichols. “If they have proper insurance, many of those companies will have claims paid by insurance and defense costs covered. If not, the companies will be forced to pay out from their company or personal assets to settle claims and pay their attorney fees.” 

Insurance is a vital part of any company’s budget, and it should be obtained to cover the physical attributes of businesses as well as the human factors. If you own or oversee an operation, be sure to make an appointment with your insurance agent to discuss your needs. It could be the difference between paying for insurance now or paying out-of-pocket for damage or losses in the future.

Some of the common types of business insurance include:

 E&O insurance: E&O is a type of professional liability insurance. It covers businesses against claims involving negligence caused by harm resulting from errors or a failure to perform some type of duty or service. 

Business property insurance: This insurance covers a business’ equipment, gear, signage, inventory and furniture for things like fires, storms or theft. Just like homeowner’s insurance, you need special insurance to cover floods, earthquakes and other issues. This insurance covers the business no matter if it is leased or you own the building and property.

Product liability insurance: This covers a business if someone is injured or killed due to someone being harmed by a defective product or service. It pays for both damages and legal fees.

Commercial auto insurance: This insurance covers vehicles used in your business, including injury or property damage to someone due to one of your vehicles. Personal auto insurance doesn’t cover you if you use your personal vehicles in your business, you must have separate commercial auto insurance.

Business interruption insurance: This insurance covers your business if operations are interrupted due to some sort of catastrophic occurrence. It pays for lost income during such an event.

Workers compensation insurance: Workers compensation covers medical bills and lost wages if your employees get hurt or killed while working, no matter who is at fault. It is required in most states.

Health insurance: Health insurance provides health coverage for you and
your employees.

Life and disability insurance: This insurance covers a business if the owner or employees become disabled or die.

Terrorism insurance: This insurance covers a business in case of loss due to terrorist actions.

Underground storage tank insurance: This insurance covers businesses that have such tanks (i.e. gas stations) if it leaks and pays for cleanup, liability, etc.

Engineers and consultants insurance: This insurance covers a business for damage or loss caused by negligent contractors.

HAZMAT insurance: This insurance covers transportation, loading, unloading, cleanup, etc. if a company deals with hazardous materials.

Cyber insurance: This insurance covers your company if your website, servers or database is hacked by someone. 

Directors and officers insurance: This insurance covers the directors or officers of a company for legal fees and damages if a director or officer causes the business to be sued.

Employment practices liability insurance: This covers the business if an employee sues them for some type of discrimination such as age, race, disability, sexual preference, wrongful firing, etc.

Umbrella insurance: This insurance covers a business over and above the limits of other insurance policies. For example, if your property was destroyed and your property insurance wasn’t enough to pay for it, then this insurance would cover up to the amount of the policy purchased.

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