What Is Not Covered by a Business Insurance Policy?

Typically, business insurance policies cover only liability and property damage. This can leave your firm vulnerable to litigation arising from occurrences not covered by standard commercial liability coverage. To safeguard your business, you can enhance your existing liability insurance with other policies designed to cover certain scenarios. This enables you to save money by getting only the coverage your business needs.

Professional Obligation

Lawyers, accountants, physicians, and others who provide professional services need also acquire professional liability insurance because their standard business coverage does not cover it. Professional liability insurance pays for claims resulting from improper advice or practice. Your profession will dictate the type of insurance you require. A doctor must carry malpractice insurance, whereas a real estate agent may merely require coverage for errors and omissions.

Replacement Cost

The property damage element of your company liability policy will only pay up to the item's real cash worth. This could be a problem if your organization owns outdated equipment whose value has decreased substantially. It is possible that the insurance reimbursement will not be adequate to acquire a replacement piece of equipment. Adding a complete replacement cost rider to your policy bridges the gap between the property's current market worth and the cost to replace it.

Commercial Interruption Insurance

Business interruption insurance protects against losses caused by property damage. For instance, if a significant amount of your inventory is damaged, a business interruption rider will compensate your company for the orders it could not fulfill due to the damaged inventory. A general liability policy would only cover the inventory's replacement cost.

Employee Compensation

All states mandate that employers provide workers' compensation coverage for their employees. Workers' compensation insurance covers medical expenses, injury settlements, and lost earnings for injured employees. Check your state's regulations for the precise process. You may be obliged to pay into the state's workers' compensation system, choose an insurance carrier linked with the state, or acquire your own commercial workers' compensation insurance.

Auto Insurance

Liability insurance does not cover injuries and property damage caused by employees driving outside the business premises. You must acquire a separate auto insurance policy to safeguard the business from automobile-related lawsuits. Your coverage may also protect the company's fleet of vehicles from vandalism. You will be expected to furnish a list of company drivers for the insurance provider to review their driving records. A previous record of violations could disqualify an employee from auto insurance coverage.