The last thing you want is for your client to be caught like a deer in the headlights when encountering a bump in the road. And if that client is a small business, it’s especially crucial to make sure there are no gaps in their coverage that would leave them vulnerable in a worst-case scenario.
One time, we had an agent who needed a quote for a supplemental line for one of their clients. Their client was a small business owner who manufactured deer stands and feeders. This business is incredibly unique because they build their products, set them up, and quality test them for three days before they sell them. As long as their product receives the 72-hour stamp of approval, the company sells them wholesale or direct-to-consumer.
As you can imagine, with a high level of craftsmanship and the intensity of a testing period, a general liability clause wouldn’t cut it for this small business. So their insurance agent turned to us to fill in the gaps for their business and products.
Within hours, we were able to get them the coverage they needed.
Filling in the Gaps
Giving your small business clients the coverage they need is all about understanding their unique needs and drafting additional clauses that patch up any potential holes. Let’s explore some of the different policies that your clients may need.
It’s likely that your client already has general liability coverage. Still, we feel it’s important to review what’s covered under a GL clause to understand what gaps might need filling. If your client doesn’t have GL insurance, then it’s crucial to start here.
General liability takes care of common business risks, including customer injury, customer property damage, and advertising injury. If a small business has a storefront or a place where customers can go to view products, general liability is essential. This policy can protect small businesses from costly lawsuits and make it easier for them to get leases or contracts.
Business Owner’s Policy
A business owner’s policy (a BOP, if you will) is an alternative to general liability that bundles GL and commercial property insurance. Because BOPs combine two policies into one, they typically save your clients money.
A BOP is an excellent option for small business clients that own property and work directly with the public because it protects them against everything covered in a GL policy plus incidents like fires and burglaries.
Professional liability, sometimes called errors and omissions insurance, cover the cost of client performance lawsuits against small businesses.
Typically, people start a small business because they have a certain level of expertise in a field. But even experts make mistakes sometimes, and customers are not always the most accepting of an error when it happens for their project. That’s where professional liability comes in.
If a customer sues a business because they’re unsatisfied with the product or service they paid for, professional liability coverage will cover the legal defense costs. Professional liability should be prioritized for small businesses specializing in craftsmanship, performing in-home services, and products made to order.
Workers’ Compensation Insurance
For small businesses, workers’ compensation insurance is essential. Anyone who has employees on the payroll needs workers’ compensation to protect their team members and protect them along with the company.
Depending on where your client is located, it may be legally required for them to have this coverage.
If your client is hesitant to implement a workers’ comp clause because it’s improbable that someone will get hurt, remind them that accidents happen, and it’s better to have all of their bases covered.
Also known as cyber liability insurance, cyber insurance is necessary for any business conducting business online. Whether the business has an eCommerce platform or simply sends out emails to a subscriber list, cyber insurance protects them from the costs associated with a data breach or malicious attack.
Unfortunately, cybercrime has risen significantly over the years, and small businesses that fall prey to a cyberattack can be forced out of business. Larger companies have the capital to cover the costs of cyberattacks, but small companies will rarely be able to save themselves.
We’re insurance agents, so we can’t speak to the tech that businesses should use to keep their data safe. However, we can suggest cyber insurance to protect brands against the expenses associated with a cyberattack or data leak, including customer notification, credit monitoring, legal fines, and fees.
Giving Your Small Business Clients the Extra Coverage They Need
We have plenty of experience with helping small businesses get the coverage they need. We understand that small companies walk a fine line and need to maximize their profit, so we want to help them stay protected at the lowest price.
We pride ourselves on generating surplus line quotes effectively and efficiently so you can help your clients get what they need.
If you have a small business client and need an additional policy to fill in the gaps of their general coverage, you can use one of our supplemental forms to get started. The more details you include, the more accurate our quote will be.
If you have any questions about what your client may or may not need, please don’t hesitate to reach out. We can’t wait to make you your client’s hero.