Last week, we looked at three types of insurance coverage that every business owner should have. While buying insurance coverage may seem low on your to-do list, making sure you and your business are protected from lawsuits is one of the most important things you can do for your business.

After all, your business can’t grow and succeed if you’re forced to sell it to cover lawsuit expenses! This is especially true for smaller companies. While you may think your chances of being sued are lower than a large corporation, the damage your small business could sustain due to a lawsuit is all the more harmful because your business likely doesn’t have the liquid cash reserves you’d need to pay off the costs of being sued.

Facing a lawsuit as a small business isn’t just stressful, but it could cost you your entire business!

Instead, investing in appropriate insurance coverage will give you peace of mind and let you focus on expanding your business knowing that if something happens, you’ll be able to handle it and move forward with confidence.

Here are two more types of insurance you should never go without!

A lesser-known but very important insurance coverage for business owners is Employment Practices Liability Insurance or EPLI. EPLI insurance protects you against lawsuits filed against your business by your own employees under claims that your company violated their workers’ rights.

Types of lawsuits covered under these policies include:

• Wrongful termination
• Poor management of employee benefit plans such as retirement accounts
• Sexual harassment claims
• Discrimination
• Infliction of emotional distress
• Breach of employment contract

In our increasingly litigious world, the chance of being sued by one of your own employees is greater than ever. While every business owner should have policies in place to reduce the likelihood of employment issues that can lead to a lawsuit, there’s always still a risk, and that risk is simply not worth it.

If you aren’t sure how to get EPLI coverage, start by talking to your general liability insurance policy provider to see if they offer it as a rider on your general liability policy. Otherwise, many companies offer affordable stand-alone EPLI policies.

Last but certainly not least, professional liability insurance is an essential safeguard for service-oriented businesses. Also known as errors and omissions insurance, this coverage protects your business against claims arising from errors, omissions, or negligence in your professional services. Even the most seasoned professionals can make mistakes, and in such cases, your clients may seek compensation.

Professional liability insurance provides financial protection by covering legal fees for your defense and money for settlements and damages paid to the suing party. If you need a license to do what you do - such as doctors, lawyers, contractors, and accountants - professional liability insurance is an absolute must.

These policies also usually include an option for “prior works coverage” and “tail coverage” that extend your policy coverage limits for work you did before taking out the policy and for work you completed during the policy term even after you’ve canceled that policy.

For example, a tail coverage policy will cover an error you made while doing tax work for a client during the policy term, even if the error isn’t discovered by an IRS audit until two years later when you are no longer paying premiums for the policy.

As your Personal Family Lawyer®, it’s my passion to help business owners create businesses and lives that they love, and that starts with a strong foundation that protects you and your business.  

That’s why I offer the LIFT™ Business Breakthrough Session to make sure your Legal, Insurance, Financial, or Tax systems are set up for success. Once you have the essential building blocks in place, I support my clients as an extension of your team with monthly support that helps you grow your client base, understand your cash flow, and plan for steady, reliable growth.

If you’re ready to take the next steps toward building and protecting your business, schedule your free 15-minute discovery call at this link. I can’t wait to be part of your team.

This article is a service of a Personal Family Lawyer®. We offer a complete spectrum of legal services for businesses and can help you make the wisest choices with your business throughout life and in the event of your death. We also offer a LIFT Business Breakthrough Session™, which includes a review of all the legal, financial, and tax systems you need for your business. Call us today to schedule.

The content is sourced from Personal Family Lawyer® for use by Personal Family Lawyer® firms, a source believed to be providing accurate information. This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal, or investment advice. If you are seeking legal advice specific to your needs, such advice services must be obtained on your own separate from this educational material.

We offer a complete spectrum of legal services for business owners and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer you a LIFT Your Life And Business Planning Session, which includes a review of all the legal, insurance, financial, and tax systems you need for your business. Schedule online today.

As a business owner, you pour your heart and soul into building your dream, making strategic decisions, and managing day-to-day operations. With an eye on your business’s future growth, it's crucial not to overlook the importance of protecting your business from unexpected setbacks.

Even if you think your business is too small to worry about a potential lawsuit, no business is immune to legal trouble as a result of an accident, employee incident, or technology mishap that could cost your business more than just money.

Insurance is a powerful tool that can provide you with peace of mind and safeguard your hard work, but it can be tough knowing what coverage you need. In this blog post, we'll explore four types of insurance that no business owner should go without. Let's dive in!

General Business Liability Insurance is the first place to start when it comes to getting insurance coverage for your business. This type of coverage acts as a safety net by protecting your business (and you) from lawsuits that can result from someone getting injured on your business’s property, damage that can occur to your building from issues such as a pipe bursting, and protection from theft or damage to your business property like machines and furniture.

General liability insurance can help cover legal fees, medical bills, and settlement expenses that can arise from these issues, and can give you confidence in knowing you’ll be able to navigate unforeseen circumstances without jeopardizing your business's financial stability.

Next on our list is worker's compensation insurance. Your employees are the backbone of your business, and ensuring their well-being should be a top priority. Worker's compensation insurance provides coverage for medical expenses and lost wages in the event of work-related injuries or illnesses.

By investing in this insurance, you not only protect your employees but also shield your business from potential lawsuits resulting from workplace accidents. It's a win-win situation that promotes a safe and secure work environment.

Workers' compensation insurance is mandatory by law in most states if you have W2 employees. If you aren’t sure whether workers’ comp rules apply to your business, give me a call. I’d be happy to walk you through our state’s requirements and help guide your business through these fundamental decisions.

In today's digital age, technology is an integral part of almost every business. Whether you rely on computers, software, or other technological tools, protecting your digital assets is crucial. Technology insurance offers coverage for equipment malfunctions, data breaches, and cyber-attacks. Even if you aren’t a tech giant, a single security breach or system failure can have severe repercussions, leading to financial losses, reputational damage, and legal liabilities.

Any business that handles or stores confidential information, such as Social Security numbers, addresses, health records, bank account information, or credit card information should have technology insurance. By having technology insurance, you can mitigate the risk of this sensitive data being breached and protect yourself and your business from the world of online hackers and cybercriminals.

Insurance goes beyond external protection; it supports your business from the inside out. By investing in comprehensive insurance coverage, you create a safety net that allows you to focus on what you do best: generating new customers for your business.

Moreover, having the right insurance demonstrates your commitment to responsible business practices, which can enhance your reputation and build trust with clients, employees, and partners. These insurance policies act as shields, safeguarding your business, employees, and clients from potential financial and legal pitfalls. By investing in insurance, you can sleep well at night, knowing that your hard work is protected.

If you want to make sure your business doesn’t have any gaps in its Legal, Insurance, Financial, or Tax systems, give me a call and ask about my LIFT™ Breakthrough Session. During the session, I review your business’s needs and the systems you currently have in place to make sure your business has the foundational components it needs to thrive. From there, I support my clients toward reaching their ultimate work-life dreams through an ongoing relationship and monthly support.

To learn more about how I can help you create the business of your dreams, schedule your free 15-minute discovery call at this link.

This article is a service of a Personal Family Lawyer®. We offer a complete spectrum of legal services for businesses and can help you make the wisest choices with your business throughout life and in the event of your death. We also offer a LIFT Business Breakthrough Session™, which includes a review of all the legal, financial, and tax systems you need for your business. Call us today to schedule.

The content is sourced from Personal Family Lawyer® for use by Personal Family Lawyer® firms, a source believed to be providing accurate information. This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal, or investment advice. If you are seeking legal advice specific to your needs, such advice services must be obtained on your own separate from this educational material.

We offer a complete spectrum of legal services for business owners and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer you a LIFT Your Life And Business Planning Session, which includes a review of all the legal, insurance, financial, and tax systems you need for your business. Schedule online today.

Putting in place the right types and amounts of business insurance is a key part of your company’s LIFT risk-mitigation and asset-protection foundation. However, like other foundational business systems, if your business insurance isn’t regularly reviewed and updated as your operation grows, your coverage can prove inadequate, putting your business at serious risk in the event you are hit with a lawsuit, judgment, or an unforeseen accident or disaster.

It’s typically a good idea to review your company’s insurance coverage on an annual basis. But as your business evolves, you should also revisit your policies whenever your company undergoes significant changes involving infrastructure, assets, and personnel.

While there are numerous different events that could necessitate an audit of your company’s insurance, the following five are among the most common reasons to immediately review your coverage.

When your company grows, you may need to move your office to a new location or make renovations to your existing space. But unless you review and upgrade your commercial property insurance and general liability insurance, your existing insurance policies may not be sufficient to cover your new property.

If you move to a new location, you’ll definitely need to adjust your commercial property insurance coverage to account for the particulars of the new space. For example, your insurance rates can fluctuate greatly, depending on your new office’s square footage, building type, the location’s crime statistics, safety features, history, and other factors.

Launching a new product or service is a great way to increase revenue and grow your operation. But such new offerings also open your company up to the potential for new lawsuits.

If you’ve recently expanded your product line, you should update your product liability insurance to cover the new items in case they’re defective or otherwise harm a customer. You’ll also want to review your property insurance to cover the new products in case of theft, damage, or loss while they’re stored on your property.

If you make your living by providing professional services and/or consulting, you need professional liability insurance, and your policy will need to be updated to account for your new services. Also known as errors and omission insurance, professional liability insurance protects you against lawsuits alleging your professional services caused a client to suffer damages, arising from actions like negligence, mistakes, and breach of contract.

Such coverage can be essential for a wide range of businesses—accountants, lawyers, real-estate agents, consultants, IT firms, and others. Check with us, your Family Business Lawyer™ to find out if you should have such coverage.

As your team grows over the years, you’ll need to adjust your workers compensation insurance coverage to reflect your current staffing level. Having the proper workers comp coverage is not only a good idea, it’s the law, and failing to update your coverage could lead to fines and other penalties.

Another liability consideration when adding new team members is employment practices insurance, which provides protection for lawsuits initiated by both employees and contractors. While this is an often-overlooked coverage, it’s actually one of the most important, since employment claims are among the most serious threats to small businesses.

Indeed, studies show that nearly one in every five small businesses will get sued by a team member at some point in their lifecycle. The more people who work for you, the greater the risk of a lawsuit and the higher the resulting damages are likely to be in the event of a successful suit, so you should adjust your level of coverage accordingly as your team expands.

If you or your team use a company-owned vehicle, each of those vehicles should be covered by comprehensive commercial auto insurance to protect against liability as well as any injury or damage that might occur to your employees, vehicles, products, and equipment.

If your team uses their own vehicles, their personal insurance may cover them. But for maximum protection, consider purchasing “non-owned auto liability coverage” in case a team member fails to renew their insurance or has inadequate coverage.

If your company grows large enough or changes corporate structure to add board members and/or executive officers, each person serving should be covered by directors and officers insurance. Such coverage protects executives should they be sued for a decision they made on behalf of the company.

At the same time, consider taking out “key-person” insurance any time you hire a new high-level executive. Key-person insurance is basically life insurance that pays out to your company should the owner, an officer, or another top executive pass away. Such coverage can be invaluable for small companies, which would otherwise collapse in the absence of certain top-tier staff.

Before you sit down with an insurance agent, meet with us, as your Family Business Lawyer™. We will evaluate the specific risks your company faces as it expands to determine exactly what kind of insurance you need and what levels of coverage will best safeguard your business assets at every stage of its evolution. Contact us today to get started.

This article is a service of a Family Business Lawyer™. We offer a complete spectrum of legal services for businesses and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer a LIFT Start-Up Session™ or a LIFT Audit for an ongoing business, which includes a review of all the legal, financial, and tax systems you need for your business. Call us today to schedule.

We offer a complete spectrum of legal services for business owners and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer you a LIFT Your Life And Business Planning Session, which includes a review of all the legal, insurance, financial, and tax systems you need for your business. Schedule online today.

Business insurance is your first line of defense in protecting your company from a wide variety of different potential threats. Without the right insurance—or with too little of the insurance you do need—you could be at great risk from the costs of a lawsuit, judgment, or in the event of an unforeseen emergency or disaster.

There are numerous types of business insurance available, and some insurance policies are a must-have for nearly every business, while others you might not need. The type of insurance you require will ultimately depend on the specific risks your company faces as well as its assets, so you should meet with us your Family Business Lawyer™ to identify the coverage your particular business should have in place.

In addition to not having the right types and levels of coverage, business owners make a number of common mistakes when purchasing business insurance. While we can help you determine the appropriate coverage for your company, here are a few frequently made errors to avoid when investing in business insurance.

The right business insurance will not only pay out if someone wins a lawsuit against your company, but it will also hire a lawyer for you and pay your legal bills if your business is ever sued. To this end, make sure your insurance coverage offers a “duty to defend” your business in the event of a lawsuit, and not just a “duty to indemnify,” or pay out, in the event of a judgment.

In fact, providing you with legal representation can be the most important component of business liability insurance, because your company can be sued at any time by anyone even if you’ve done nothing wrong. And if you can’t afford to defend yourself against the suit, your business can be ruined by a single frivolous claim.

If your business is damaged in a fire, storm, or another unexpected event, having commercial property insurance will pay to rebuild and repair your workspace. However, if your business is shut down for even a short period of time, the loss of income can be devastating. Given this risk, consider investing in business interruption insurance, also known as business income coverage.

Business interruption coverage reimburses your company for the income lost due to the event, and it can also cover overhead expenses like rent or electricity while your operation is out of commission. Many businesses learned the hard way just how crucial such coverage is during the pandemic-related shutdowns of this past year, so let it be a lesson as to how vital such coverage can be.

Like any other foundational business system, if your insurance isn’t regularly reviewed and updated as your operation grows, your coverage may prove inadequate, putting your business at risk. In general, it’s a good idea to review your insurance coverage on an annual basis, but as your business evolves, you should also revisit your policies whenever your company undergoes significant changes involving infrastructure, assets, and personnel.

While there are a number of events that could necessitate an audit of your insurance coverage, some of the key changes that require you to immediately review your business insurance include the following: relocating or renovating your office, hiring new employees, adding a new product, or service, purchasing new vehicles, and making changes to your top executives.

While you probably don’t want to think that one of your team would ever sue you, your employees (and independent contractors) are actually one of the most likely sources of litigation. In fact, nearly one in every five small businesses will get sued by a team member.

In addition to having clear employment agreements in place and formal processes for hiring and firing, you should invest in employment-practices insurance for your company. This coverage protects your business against lawsuits brought by both employees and contractors, and the right coverage will not only pay out in the event of a judgment against you, but also pay for your legal costs.

You might think that your homeowners insurance policy would protect your home-based business from losses and liabilities, but this is a common misconception. Your homeowners policy doesn’t offer coverage for any business property, including both equipment and structures used for business purposes. Your homeowners policy also doesn’t cover against business-related liabilities, such as slip and fall accidents.

Although you can get extra coverage added to your homeowners policy to cover your home-based business, if you run a business out of your home, you really should get both homeowners and business insurance. At a minimum, you’ll need business liability coverage, property insurance, and business interruption insurance, which can be purchased bundled together under a typical business owner’s policy.

Every business has its own unique risks and assets, so there’s no way to know exactly what coverage your company needs without an evaluation. Before you sit down with an insurance agent, meet with us, as your Family Business Lawyer™ for an insurance audit.

We can support you by evaluating the specific risks your company faces at each stage of growth to determine exactly what kind of insurance you need and what levels of coverage will best protect your business assets both now and in the future. Contact us today to get started.

This article is a service of Pantea Fozouni, Family Business Lawyer™. We offer a complete spectrum of legal services for businesses and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer a LIFT Start-Up Session™ or a LIFT Audit for an ongoing business, which includes a review of all the legal, financial, and tax systems you need for your business. Call us today to schedule.

We offer a complete spectrum of legal services for business owners and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer you a LIFT Your Life And Business Planning Session, which includes a review of all the legal, insurance, financial, and tax systems you need for your business. Schedule online today.