Tag Archive for: mitigate risk

the insurance you purchase for your business depends on your business type

how do I insure my business?

Have you recently started a business and don’t know where to start when it comes to insurance? As a business owner, you might understand the benefits of an insurance policy as it pertains to paying for damagesso you aren’t paying them out of pocketbut what policies does your unique business need?

After all, commercial insurance isn’t one size fits all. The insurance needs of a marketing agency, for example, will likely vary from those of a law office.

Watch Robert Cohen, Principal at benchmark commercial insurance, explain how to insure your business in the video below.

 

what types of insurance does my business need?

Some insurance types are required on a federal level while other are required by the state. Some insurance types, however, are required by contractual agreements or motivated by “best practices” corporate governance.

So, what types of insurance does your business need? This depends on a variety of factors, including:

  • How many employees your business has 
  • Your sales revenue
  • Your annual revenue 
  • The industry you’re in
  • Your level of expertise
  • Where your business is located
  • How much risk you’re willing to tolerate

insurance for different business types

Let’s discuss four different business insurance types: home-based business insurance, small business insurance, medium-sized business insurance, and insurance for large businesses.

home-based business insurance 

Home-based businesses account for half of the businesses in the United States. Insuring this type of business model with homeowners insurance alone won’t cut it when it comes to business property loss or liability. 

small business insurance 

The Small Business Administration (SBA) defines small businesses as businesses that are owned and operated independently, and are for-profit. Often, these businesses have fewer than 500 employees.

A common small business policy is a Business Owners Policy for businesses with fewer than 100 employees and revenues of up to about $5 million or less. 

While you can purchase customized insurance to cover your specific type of business, insurers offer standardized small business policies that enable you to protect your company against the most common risks at an affordable rate.

medium business insurance 

Medium businesses usually range between 50 to 1,000 employees and have annual revenues between $10 million and $1 billion. Typically, there are specialized insurance policies designed for medium-sized businesses.

Here, policies become more flexible based on the needs of the company. For instance, if your business owns expensive equipment or has multiple locations, you can seek out customized policy options to address these elements.

large business insurance

A large business is considered such if they have over 500 employees. There aren’t linear revenue requirements for a business to be considered “large.”

Since these businesses employ hundreds of people and more than likely have multi-million-dollar revenue risks, their commercial insurance policies must be tailored to the business’s unique needs.

types of insurance to insure my business

Understanding your insurance needs for your unique business is essential to your success.

At benchmark commercial insurance, we often find business owners who are either under-insured or even over-insured at times. Your policy supports your business operations and gives you peace of mind that if something occurs, you are covered financially.

So, what type of insurance do you need for your business? There are many insurance policies to choose from to support your unique business. A few to consider include:

how to properly insure my business

The number one thing to consider as you invest in insurance for your business is: Do any of my current policy forms have coverage restrictions or exclusions that limit my coverage for the business I am in?

When insuring your business, at the highest level, transfer the risk of financial loss to the insurance company from your balance sheet in as many ways possible.

Doing so, however, comes with a cost. Sometimes that cost is too much to bear.

A key component of insuring your business is your relationship with your risk management/insurance services service provider. How will they help you structure your policies to be the most effective in coverage and cost? It takes time.

Your insurance professional should be sitting with you periodically to make sure that both parties are up to speed on all of the moving parts of your business operation.

Moreover, your insurance professional should make sure they’re offering you every commercially available tool to transfer the risk from your balance sheet to the insurance company (again, in as many ways possible). Once organized, it’s up to you to determine what may or may not fit into your budget or what policies best protect your business.

If you’re not having these conversations with your insurance services provider, reach out to our team at benchmark insurance. Here, we thrive on creating a boutique insurance experience for our clients.

Now that you understand how to insure your business, read our article on how much you should pay to insure your business.

all businesses need to mitigate risk with cyber insurance

I don’t have an online business, do I need cyber insurance?

The insurance policies a business chooses is based on their specific business model. What works for one business may not work for another. One policy, however, lives as a baseline policy all businesses should have- cyber insurance

 

This rings true, especially in light of today’s tech-reliant world. Even businesses that do not operate online are not free from the dangers of a cyber attack. 

 

Furthermore, recent events regarding the ongoing Russian-Ukrainian War have the potential to impact all businesses and their cyber security in the United States. Cyber security risks are escalating, so let’s discuss more why even non-online businesses should invest in cyber insurance.

do all businesses need cyber insurance? 

Yes. All businesses need cyber insurance regardless of business type—especially in today’s digital environment. 

 

Even if your business is not an online business, cyber insurance helps mitigate risk. Cyber-attacks occur regularly (every 11 seconds in 2021), and can target individuals and businesses alike. No one is safe from the threat of a cyber attack – no matter the business model. 

 

Typically, attackers use the following tactics in a cyberattack:

  • Phishing 
  • Compromised/stolen devices
  • Credential theft 

 

General and professional liabilities may include basic cyber liability coverage, however, businesses that store personally identifiable information or any sensitive information for employees and customers should seek out further coverage. 

 

Data your business has (i.e. phone numbers, credit card numbers, social security numbers, and more) puts any business at risk for an attack.  

 

A report by Nerdwallet, “​​Among small businesses with fewer than 250 employees, the average reported cyberattack cost was about $25,600.”

 

Consider the following cyber attack statistics below before dismissing a cyber security policy for your business. 

 

  • Cybercriminals can penetrate 93% of company networks
  • In 2021, businesses suffered 50% more cyberattack attempts per week
  • Corporate cyber attacks increased by 50%
  • Small to medium-sized businesses are most commonly targetted   
  • 43% of cyber-attacks are targeted against small businesses 
  • 83% of small businesses are not financially prepared for a cyber attack

 

The threat of a data breach is here to stay. We here at benchmark have first-hand experience with what cyber attacks look like, and what to do to keep your business safe. Read on to learn how we mitigated a cyber attack against our vendor’s business. 

 

benchmark case story

A few years ago, our data vendor’s cloud server was hacked.  All of the vendor’s “mission-critical” information stored in the Cloud was breached (i.e. email servers, client databases, and more)- that included our sensitive information and the information of their other clients. 

 

The hacker asked for a ransom to not share all of the data and to return the data back to our vendor. 

 

Luckily, because the vendor had benchmark’s cyber insurance coverage, our office and all of the vendor’s clients came out unscathed. The cyber insurance covered the entire ransom the hacker was asking for– which meant our vendor was able to keep their data safe and unharmed. 

 

Our cyber insurance policy coverage protected our vendor, our business, and their clients from leaking private information. It also kept the vendor in business so they wouldn’t go bankrupt from paying the hacker’s ransom out of pocket. 

 

Read our next blog post for a complete guide to cyber insurance and why you need it. 

 

all businesses need cyber insurance