If you are like many other business owners, then you might not know very much about the commercial insurance market. Unfortunately, this lack of experience leads to common misconceptions about certain types of business insurance in Groton, Connecticut. To ensure that you are well-informed about your commercial coverage, here are some of the most misunderstood business insurance policies explained in more detail.
Business Interruption Insurance
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What is it?
Business interruption insurance is designed to cover the revenue your business would lose if it were forced to temporarily close its doors. In addition to compensating you for lost income, business interruption insurance also provides coverage for recurring operating costs such as your business’s rent, utility payments, and employee paychecks.
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Why is it misunderstood?
Many business owners do not secure this coverage because they assume that it is included in their commercial property policies. Unfortunately, this simply isn’t the case. While your commercial property insurance will offer coverage for the physical damage that your business’s building, supplies, inventory, and equipment sustain during a covered peril, that’s as far as coverage goes.
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Bottom line
If you do not secure business interruption insurance, then you risk a temporary business closure becoming a permanent one. Business interruption is necessary to keep normal operations up and running despite the lack of income coming in.
Equipment Breakdown Insurance
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What is it?
Equipment breakdown insurance provides coverage in the event that your business’s equipment breaks down due to a mechanical issue. In addition to compensating you for broken equipment, this type of insurance will also replace the income that your business lost due to the defective machinery.
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Why is it misunderstood?
Most businesses assume their company’s equipment is covered by their commercial property insurance. Unfortunately, commercial property policies only offer coverage for equipment that is damaged by external issues such as fire, natural disaster, vandalism, and so on. This means that equipment damages caused by internal malfunctions will not be covered under your commercial property insurance. The only way to address these damages is with an equipment breakdown policy.
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Bottom Line
If your business relies on specialty equipment, then having a key piece of machinery break down can be devastating. The only way to secure coverage to repair or replace broken machinery is with equipment breakdown coverage.
Cyber Liability Insurance
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What is it?
Cyber liability insurance offers coverage in the event that your company becomes the victim of a cyber attack or data breach. Cyber liability insurance covers the cost of notifying customers about the breach, recovering compromised identities and data, repairing damaged computer systems, and so on. Additionally, cyber liability insurance will also cover your legal costs should the affected parties decide to sue you.
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Why is it misunderstood?
Many business owners simply do not realize how serious their risk for a cyber attack is. This is especially true when it comes to smaller, independent companies. Despite what you might believe, cyber criminals actually target smaller businesses more often than big-name corporations because small companies are less likely to have the appropriate security safeguards.
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Bottom Line
Small businesses face a serious risk for cyber attack and data breach. The only way to make sure that the cost of an online security breach does not come out of your pockets is by securing the right cyber liability insurance.
These are some commercial coverage insurance misconceptions. Do you have more questions about your business insurance in Groton, Connecticut? If so, then contact the experts at The Reardon Agency for assistance today.
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