Did you know that 82% of businesses fail due to cash flow problems? Out of the small businesses that do begin, 64% start out with only $100,000 in capital.
While the thought of your business closing due to cash flow might seem scary, it’s a realistic and common problem. There’s hope to combat this.
This article will talk about the common gaps in commercial insurance that you might find as a business owner. Read on to explore more about these gaps, and ensure that your business is covered today!
1. Coverage Gaps
Some of the most common gaps in commercial insurance policies include improper first-named insurance and an incomplete or inaccurate list of insureds. Make sure that the insurance company you work with, such as captive insurance, goes over your different options to avoid gaps.
Avoid using an improper first name insured on a policy. Insurance policies will have special duties and rights to the first name insured. This can include paying premiums, occurrence, claims, or loss.
If you have an improper listing of insureds in the policy, it can lead to coverage gaps. These names will appear on the declarations page.
Each year, it’s a good idea to reassess the different coverage that you have and make any changes necessary. Make sure that all safety measures are in place as well to avoid having to use your insurance policy.
2. Coverage Gaps in Professional Liability Policies
The incorrect description of professional services, inadequate limits when defense, and gaps or overlaps between professional and general liability policies are common. You might also experience no coverage for predecessor firm exposures, punitive damages, or restrictive wording of absolute exclusions.
3. Data Coverage Gaps
Many companies will think that their commercial insurance coverage includes damage to their data systems. If you experience data loss or a breach, that’s beyond replacing servers.
You might need to have IT work extra hours to close any loopholes, manage downtime due to replacement systems, or cover consumer loss. This can lead to hundreds of thousands of dollars for your insurance policy.
4. Employee Liability Coverage
When someone comes in for an interview, they fall into the employment category. This can include discrimination lawsuits as well.
Even if a claim is found to be false, you’ll still need to pay for any consequences or the cost for it. Make sure that you have the necessary coverage to protect yourself and your business.
5. Equipment Breakdowns
Business insurance is vital for your equipment as well. This can include having business interruption coverage due to utility interruptions. You’ll also want to have contingent business interruption exposures as well among others.
Most Common Commercial Insurance Gaps
Now that you’ve explored some of the most common commercial insurance gaps, you should have a better idea of what to include. Are you looking to read more business content? For all of your business content needs, check out our other articles on our site today!