Happy 2019! How did your business fare last year? Our Colorado economy is still booming and most businesses in our state are growing and feeling prosperous.  However, business ownership isn’t always easy and for various reasons many businesses struggle daily to stay afloat.  As insurance advisors we come across many small businesses that are totally unprepared for several common risks that could financially devastate their businesses.

What’s the one thing that large and small, prosperous and struggling business have in common? One small mistake, data breach, or even accidentally overlooking a small piece of paperwork, could send a business into irreparable financial ruin.

We’d like to share information about four commonly overlooked risks and the insurance coverage you should have in place to protect your business’s assets.

  1. Employment Practices Liability Insurance:  You think of your employees like family, so why would they ever file a lawsuit against you? Employers don’t have to do something wrong to be sued. Unfortunately, employers still end up paying substantial legal fees to defend themselves against allegations of wrongful termination and discrimination among other employment practices-related claims. As a business owner you need insurance coverage that helps to proactively minimize risks to your business. And, if you have employees, you need insurance that helps protect you from employment-related claims resulting from alleged or actual acts of discrimination, harassment, retaliation, wrongful discipline, wrongful termination, wrongful failure to promote, or violation of the Family Medical Leave Act (FMLA).
  2. Data Breach Insurance:  Could your business be at risk?  Unfortunately, the answer is “yes.” Security breaches are becoming increasingly more common as our culture has become almost completely wireless, digital, and paperless.  In fact, the percentage of small businesses that have experienced a cyber-attack in the past 12 months is up from 55% in 2016 to 61% in 2017.  A data breach is a security incident in which sensitive, protected or confidential data is copied, transmitted, viewed, stolen or used by an individual unauthorized to do so. Data breaches may involve financial information such as credit card or bank details, personal health information, and trade secrets of corporations or intellectual property. The cost for mandatory notification, providing credit monitoring & credit repair expense for individuals impacted by a breach could be crippling to a business. However, businesses today can protect their business and their clients from these unwanted risks with the right insurance and coverage.
  3. Employee Benefits Liability Insurance: Your business takes good care of its employees and offers and pays for a great health plan and other benefits.  While these benefits can help your company compete for qualified workers and keep your current employees happy, they must be administered properly. Small clerical errors can have major consequences. What happens if due to a clerical error by human resources a new employee is not actually enrolled when eligible and the mistake is not discovered until months later when the employee is in a serious car accident?  Errors in administration can lead to lawsuits against HR employees, your firm, or both. To insure against such claims your business can purchase employee benefits liability (EBL) coverage. EBL coverage is often provided via an endorsement attached to a general liability policy.
  4. Errors & Omissions Insurance:  Costly mistakes can happen – even to people with the best training and years of experience.  In fact, individuals with specialty training and experience are typically held more accountable and to a higher standard in the eyes of the public and the courts. That’s why errors and omissions insurance is so important. Errors and omissions (E&O) is the insurance that covers your company or you individually, if a client holds you responsible for a service you provided, or failed to provide, that did not have the expected or promised results.

It is imperative for business owners to understand and consider these four important coverages and to look at going beyond their basic liability policies.  In the litigious environment that today’s businesses now operate, you need to make sure that you have protected yourself properly and entirely.  We suggest you contact your insurance agent for a complete review of your risk and current policies to make sure you’re adequately insured.  If you don’t have a trusted advisor to assist you, our agency would be happy to help.