While it’s true that change is the only constant in life, it’s also true that insurance is no exception to this fact. Anyone who’s been in this field/business for more than ten years would likely agree that nowhere is this more evident than in the nature of claims we receive from our respective clients. While your classic trip-and-fall, and fender-bender claims still occur from time to time, there are several new residents on this block.
In the last four years since we all were sent home for covid, EPL (Employment Practices Liability), Cyber, and Crime claim submissions have been rising exponentially – as have the costs of setting these types of claims. Your Business Owner Policy (BOP) or Commercial Package *might* have a scaled-down version of these coverages, but how do you know if you have enough coverage? Also, are you taking enough care to prevent losses from occurring?
Step back, and take a look at your daily routine. Is there another business that your business depends on? A third party that you work with daily? Recently a large health care billing provider was hacked and their portal was temporarily blocked by ransomware, and if you own a clinic or doctor’s office, you may have learned all too well that many business owner policy extensions for cyber security provide coverage for your business, but do not typically include Contingent business income.
If you use a third party to keep your business going, or conduct e-commerce regularly, then a full cyber policy, though a bit more expensive, is probably a better option. Full Cyber policies also typically include coverage for Funds Transfer Fraud and Social Engineering Fraud – both of which are responsible for far more claims than they used to be. In short, the more dependent we are on technology, the more uSi criminals evolve to exploit its weak points.
If yours isn’t a tech-heavy business, but you still need coverage to protect you from losses like robbery or check forgery/check washing, then a Commercial Crime policy might be a better fit for you. You can typically tailor these to meet your business’s individual needs. For example, if you’re a one-person operation, you probably wouldn’t need Employee Dishonesty coverage (you aren’t going to steal from yourself!) but you could still add on Computer Fraud and Funds Transfer Fraud in case a hacker decides to transfer your bank account’s balance to their own account. If you do have employees, however, I’d opt for the Dishonesty coverage, just in case.
Speaking of employees, Employment Practices claims are on the rise as well, specifically for Wage & Hour and Discrimination – both from employees (and ex-employees) and third parties. Your BOP’s EPL extension should help if an employee alleges wrongful termination based on, for example, age or disability, but if they’re alleging that they’re being discriminated against via a lower salary or shorter hours, then you could find yourself without coverage – coverage that you could have with a stand-alone EPL policy.
Does your BOP include coverage for third party claims? Remember, allegations could come from a client of yours, not just an employee. Some BOP-based EPLs include it and some don’t. Your insurance Account Manager can look this up for you and can advise if the current policy contains enough coverage to fit your needs, or if another option should be considered.
You’ve worked hard for your business, give us a call today (or send an email) so that we can help you continue to protect it.
