When you think about business insurance, the first policies that come to mind are usually general liability, property insurance, or workers’ compensation. While these are essential, many business owners overlook other types of insurance that can be just as crucial to protecting their company. Here are five types of business insurance you might not know you need, but definitely should consider.
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1. Employment Practices Liability Insurance (EPLI)
EPLI insurance coverage protects businesses from claims related to employment practices such as discrimination, wrongful termination, harassment, and retaliation. Even if your business has a solid human resources policy, misunderstandings and legal disputes can still arise.
This coverage is particularly important in today’s work environment where employment laws are continually evolving, and employees are more aware of their rights. Having EPLI insurance ensures that your business can handle legal expenses and settlements without severe financial strain. For more information, check out EPLI insurance coverage.
2. Cyber Liability Insurance
In an increasingly digital world, cyber threats are becoming more frequent and sophisticated. Cyber liability insurance protects your business from losses due to data breaches, hacking, ransomware attacks, and other cyber incidents. This type of insurance can cover costs associated with notifying affected customers, legal fees, credit monitoring services, and even public relations efforts to restore your business’s reputation.
Small businesses are often targeted because they may not have the same level of cybersecurity measures as larger corporations, making this insurance essential for protecting sensitive information and maintaining customer trust.
3. Business Interruption Insurance
If your business suffers a disruption due to a natural disaster, fire, or other unexpected events, business interruption insurance can provide coverage for lost income and operating expenses while your business is temporarily closed or recovering. This coverage is different from property insurance, which only covers physical damage.
Business interruption insurance is crucial for maintaining cash flow during tough times and ensuring your business can survive until it returns to normal operations.
4. Professional Liability Insurance (Errors & Omissions)
If your business provides professional services or advice, professional liability insurance (also called errors and omissions insurance) is essential. This insurance protects your company from lawsuits alleging negligence, mistakes, or failure to deliver services as promised.
For consultants, accountants, lawyers, and other service providers, professional liability insurance offers peace of mind by covering defense costs and settlements if a client claims financial harm due to your professional advice or service.
5. Equipment Breakdown Insurance
Most business owners think property insurance covers equipment damage, but that’s not always the case. Equipment breakdown insurance specifically covers the repair or replacement of vital machinery, technology, or equipment that breaks down due to mechanical failure, electrical issues, or other unexpected problems.
Whether you run a manufacturing plant, restaurant, or IT company, equipment breakdown insurance can save you from costly downtime and repair expenses that could otherwise cripple your business operations.
Conclusion
While general liability and property insurance remain foundational for most businesses, the five types of insurance mentioned above can fill critical gaps in coverage. By protecting your business against employment claims, cyber threats, interruptions, professional mistakes, and equipment failures, you ensure long-term stability and resilience.
It’s wise to review your business insurance portfolio regularly and consult with an insurance expert to identify which policies best fit your unique risks. Don’t wait for a costly incident to realize that you needed these lesser-known insurance types all along.
