As soon as you tell anyone you work in business insurance, their eyes glaze over. And yet, almost every business has some form of insurance to protect it from fires, lawsuits, and vandalism. All things that are 100% not boring.
Fun fact. Did you know the first business insurance policies began in the 17th century in a coffee shop where sailors and merchants gathered?
It was a “perfect storm” so to speak. The founders picked up on how dangerous sailing was and that merchants wanted insurance in case sailors were thrown overboard, goods were lost at sea, or pirates did…well, pirate-y things.
If you’re a small-business owner, chances are you don’t need pirate insurance now. For most business owners, there are four types of insurance that cover most major non-pirate exposures.
1. General Liability Insurance
Think of General Liability Insurance as the meat and potatoes of insurance. Every business can benefit from it because it covers basic risks like…
- Slip-and-fall accidents
- Damage to someone else’s property
- Liable and slander lawsuits
Or to put it more simply, if you accidentally hurt someone, break something, or say something you shouldn’t have, there’s a good chance General Liability Insurance has you covered.
For example, a plastic surgeon was a bit of a gossip and told magazines that Sharon Stone had a facelift. Stone filed a slander lawsuit against the surgeon and won. The damages awarded in the case are unknown, but here’s hoping the surgeon had General Liability Insurance because that was probably a huge price tag.
2. Professional Liability Insurance
Once in a while, we all mess up. Professional Liability Insurance is made for professionals who work in high-stakes industries where one miscalculation could cause their clients to lose hundreds of thousands of dollars.
You can probably benefit from Professional Liability Insurance if…
- Your profession requires it. For example, lawyers and doctors are required to have it.
- Clients won’t work with you unless you carry it. If you’re an architect, software developer, or consultant, clients want reassurance that if you mess something up, you can cover their losses.
Here’s a big reason: Professional Liability Insurance can even help even if you’re blamed for someone else’s mistake. That’s refreshing news to anyone who has worked on a project with people they’ve never met, like contractors, vendors, and such.
You’ve probably heard of magician extraordinaire, David Copperfield. What you probably didn’t hear is that he sued his accountant after he pulled a magic trick of his own and made Copperfield’s money disappear. According to Copperfield, the accountant’s errors landed him with a bill for $470,000 in unpaid taxes!
If the accountant doesn’t have Professional Liability to pick up that bill, hopefully, he’s got some deep pockets.
3. Workers’ Compensation Insurance
I bet you didn’t know that Workers’ Compensation Insurance actually started as a bargain between workers and business owners. Workers were tired of getting injured at work and business owners were equally tired of getting sued over workplace accidents. Seems like fertile negotiating ground to me.
Workers’ Comp Insurance was the compromise. If an employee is injured at work, this policy will help to cover their medical bills. The employer pays for the policy and the employees can’t sue if they accept the benefits.
Sylvester Stallone decided he wanted something more realistic during filming for Rocky IV. He told Dolph Lundgren, who played Ivan Drago to really punch him…hard. The result? Too much realism. Stallone was hospitalized after that punch to the chest caused swelling that pressed against his heart. Because this accident happened on the job, Stallone could have filed a Workers’ Comp claim to cover his medical bills.
4. Property Insurance
Property Insurance is a pretty easy sell. You’ve got stuff. You want that stuff protected from things like theft, weather damage, vandalism, and fire.
Say you run a fireworks business, and one goes rogue and burns down your shop. All you’ve worked for is now a heap of charred twigs. If you have Property Insurance, your insurer can pay to repair or replace your damaged property. That helps to relieve a bit of that financial sting, doesn’t it?
Property Insurance is pretty straightforward, so here’s something you might not know: most policies can be supplemented with Business Interruption Insurance, which is basically pennies from heaven.
So let’s say in the Great Fireworks Incident of 2019, your building was burned to a crisp. You’re clearly not open for business, which is unfortunate because it’s Fourth of July weekend. Ouch. But wait, your Business Interruption Insurance can reimburse you for the revenue you’re losing when you’re closed for repairs. Even though your business can’t operate, your insurance makes sure that you still have money to make payroll, taxes, and loan payments. Genius.
Did you know there’s an organization in Quebec called The Federation of Quebec Maple Syrup Producers? Probably not. They do exactly what their name suggests; produce a lot of maple syrup. In 2012, 6 million pounds of maple syrup was stolen from its facilities. (I’m not lying, they even made a Netflix documentary featuring the heist.) The losses amounted to $18 million. One can only hope the Quebecois had insurance to cover to their precious syrup.
In the 300 years since sailors at that coffee shop, business insurance has adapted to fit the needs of a constantly changing world. So maybe insurance won’t inspire a musical anytime soon, but for those of us in the industry, it’s fascinating to see how it has evolved into a product that protects small-business owners from their everyday risks.
Contact Guy Williams today for a quick and free quote.