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Understanding Business Insurance - Part 4

Part 1 | Part 2 | Part 3 | Part 4 | Part 5

This issue will complete the essential portion of a basic, well-designed insurance portfolio. The fifth and final issue will address other options to consider for added protection depending on the specifics of each owner’s business operations.

Employment Practice Liability (EPL) is probably the least known and therefore, most overlooked coverage. Other than the Business Owners Package, it may be the most important. EPL covers any claims arising out of discrimination, harassment or other employment issues. Things associated with regular business operations like high customer traffic, continuous employee turnover, and young, inexperienced staff members create hundreds of opportunities for lawsuits. One sexual harassment claim by an employee or alleged discrimination of a customer could bankrupt a business owner with legal defense costs alone, much less damages. For these reasons, EPL should always be part of a discussion with an insurance agent.

Adding third party coverage to the policy allows a business owner to protect against claims originating from customers. This third party coverage is crucial for any business owner who serves the general public and thus, has enormous potential for a claim (unfounded or not). In today’s increasingly litigious society, a mere rude remark by a low-level employee may become a very expensive lawsuit that threatens the business owner’s life accomplishments.

Business Automobile insurance is a must if an owner or employee uses a company vehicle or personal vehicle while on company time. Many vehicles used in business can be insured in the same manner as private automobiles. Typically, the same coverage is available to protect against liability claims arising out of the operation of the business vehicle. Business Auto insurance covers damage sustained while the vehicle is being used for business purposes and is necessary because personal auto coverage may not extend to instances where the vehicle is being used for business purposes. Businesses engaged in a substantial amount of catering, deliveries, or transportation should consider this coverage absolutely necessary.

Our final installment discusses more specific policies designed to address the needs of specific industries or potential legal liability. Consult with your insurance advisor if you have any questions on this information.