Guest Post by Emily Lazration, Content Marketing Specialist at CoverWallet. CoverWalletmakes it easy for businesses to understand, buy, and manage commercial insurance online. Lazaration has written for several outlets including Inc., Ooma, and Fundera covering small business news and advice.
Since mid-March, nearly 95% of Americans have been living under varying degrees of lockdown orders due to the coronavirus pandemic. These stay-at-home orders have also impacted millions of small businesses across the nation.
However, many states have now begun easing these restrictions and slowly reopening their economies. Most states are using a phased approach that will allow different businesses to open and begin operating at different times. Many businesses will have to operate under a “new normal” for the foreseeable future, including implementing social distancing measures and face-covering requirements.
One major consideration of reopening your business will be insurance. If you manage a business in the United States, here’s an insurance checklist for reopening your business.
Filling your coverage gap
While your business was closed, you might have either canceled or deactivated some or all of your commercial insurance policies. Many carriers are giving businesses up to 60 days to reinstate inactive policies without any coverage gaps which can help save you time and get your business open faster.
However, if you did cancel your policies and need to buy new ones you might be able to take advantage of new policy options. For example, you might be able to bundle policies, like Workers Compensation and General Liability into what’s known as a Business Owner’s policy (BOP). This can help you save money compared to purchasing two separate policies.
Insurance considerations for the “new normal”
As a business owner, if you’re planning to get back to work there are several things you need to consider including the status of your insurance. Business owners may now have different or more complex insurance needs after reopening. Here are some things you should consider:
Business restructuring: Part of the reopening process may involve making changes to your business operations such as the number of employees you have and your payroll. Or perhaps you have to change locations or move your operations online. All of these factors can impact your insurance needs.
Budget considerations: Many business owners may be struggling with their cash-flow at the moment. This can make paying insurance premiums difficult since many policies require an up-front lump-sum payment. However, many carriers are adapting to these current changes and some are now allowing deferred payments or pay-as-you-go options.
Policies checklist
As you begin to understand any coverage gaps your company may face while reopening, here’s a checklist of policies you should consider:
General Liability: This is an important policy that will protect your business from third-party claims of injury or damage. This policy is often a condition of commercial leases, so you’ll need it if you continue operating out of a physical location.
Professional Liability: If you provide professional services, you’ll want this policy to protect your business against potential mistakes or errors you make as a result of providing advice to clients.
Workers Compensation: Most states require Workers Compensation once you have at least one employee on the payroll. Once you reopen you’ll need to make sure this policy is active to ensure you’re compliant with state regulations.
Equipment Breakdown: As you reopen your business, you might have some equipment that has broken or needs repairs due to lack of use. Going forward, if you need to purchase or rent new equipment, this is a policy that will protect that investment. Equipment Breakdown insurance will cover the cost of repairs or replacement.
Commercial Auto: Many companies are adapting to new changes by adding delivery services for their products. This could mean adding commercial vehicles to your operations, and this is where Commercial Auto comes in. This is an important policy to protect you against claims associated with an accident. Keep in mind, even if you’re using a personal car for deliveries you’ll need this policy since your personal auto policy won’t cover accidents where your car is being used for commercial purposes.
Cyber Liability: As more business moves online it also increases the risk of cyberattacks. To protect your data you need to have Cyber Liability, it’s the only policy that can pay for claims associated with data breaches.
Final thoughts
Many business owners are facing the difficult decision of when and how to reopen their doors. It’s bound to be a complex process that will require business owners to think about how their company operates and what changes need to be made to ensure continuity. A major factor that needs to be considered is insurance.
Some people might think that insurance should be the first to go during tough financial times. However, the right insurance should be seen as a long-term investment in the health and wellbeing of your company and your employees.
There are a lot of options when it comes to commercial insurance, and it’s important to examine the unique risks your business faces when reopening. Make sure you work with a credible insurance provider who can help create a customized coverage plan that fits your budget.
