Business Insurance Package Policies & How They Benefit Startups

Business Insurance Package Policies & How They Benefit Startups

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Brendan O'Connor

Choosing commercial insurance can be daunting.  You want your company to be properly protected, but you don’t want to break the bank. Luckily, that’s why business insurance package policies exist!

Insurance carriers often pair multiple coverage types together, keeping the cost lower than purchasing them separately, but still giving your company the protection that it deserves. A single incident can often lead to losses or suits across multiple policies, and having a comprehensive insurance package policy can give you more coverage with fewer cracks.  Here are a few examples where a business insurance package policy can save the day:

 

General Liability Insurance / Property Insurance

Picture this: You forget to leave the heat on in your office during your extended holiday weekend. You come back from the holidays to find a major water pipe burst destroying your computers and monitors and doing significant damage to walls and furniture. To make matters worse, the burst resulted in damage to the property of a neighboring tenant who comes after you with claims of negligence.

A Property Policy covers you for the cost to repair and replace your own office equipment, but does not cover the property of others. General Liability fills that void by covering 3rd party claims brought on by your alleged negligence (like those of the neighboring tenant).  We can often get these 2 coverages packaged together in a “Business Owner’s Policy,” which is usually much more affordable than buying them piecemeal.

 

Errors & Omissions Insurance / Cyber Security Insurance

Your company sells a custom Customer Relationship Management tool.  A glitch caused by a recent update allows valuable user information to fall into the wrong hands. The downtime experienced while repairing the glitch prevents your user’s access to their data, costing them money in the form of lost revenue.  Your users sue for breach of contract due to the malfunction & subsequent loss of revenue.  They also sue for the negligent disclosure of personally identifiable information.  The former would be considered an errors and omissions claim while the latter would be a cyber issue, and we can get these 2 coverages packaged together!

 

Directors & Officers Insurance / Employment Practices Liability Insurance

A former employee and minor shareholder alleges the CEO of a company mismanaged funds and wrongfully terminated her when he replaced her with another candidate with twice the salary and only half of her qualifications for the job.  The mismanagement could be viewed as a fiduciary issue and fall under a directors & officers claim, where wrongful termination would be an employment practices liability issue.

 

In all of these examples, the insured faced significant exposure – exposure that could lead to shutting down the business – had they included just one instead of both coverages from their package policy. Often times the coverage that a claim falls under is dependent on the wording of the complaint letter as much as the incident itself, so always be sure to consider business insurance package policies wherever possible to get your business the most bang for your buck.

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