Commercial Insurance Archives - Harbor America


Cyber Liability Insurance – Is It Really Necessary for Small Businesses?

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Cybersecurity has been a hot topic of discussion for businesses in the last few years, thanks to infamous data breaches like the incident with Target in 2014 or Experian in 2017. One of the biggest questions on everyone’s mind is how to defend against cybercrime in general, and especially data breaches.

Many companies – large and small – are looking to cybersecurity software to keep them safe and minimize risk. This is a good idea, but statistics show that both the amount of data stored in the cloud and the number of cybercrimes committed are rising. Unfortunately, cybercriminals are wise to the measures businesses and individuals are taking. Businesses, especially smaller ones, should consider the benefits of cyber liability insurance as part of a backup plan in the event that their security measures fail.

What is cyber liability insurance?

Cyber liability insurance is a specific type of insurance policy that is meant to protect businesses and individuals from internet-based risks, such as data breaches or cybercrimes.

Generally speaking, there are two levels of coverage under these policies. The first is first-party coverage, which covers the direct losses a person or an organization suffers. The second is a third-party, which takes care of legal actions or claims brought against the company by its partners or customers.

This sub-category of insurance may also be referred to as cyber insurance or cyber risk insurance.

How it benefits small businesses to have cyber liability insurance

With all of the incidents in the news in the last few years related to large businesses, small business owners may feel like they are less of a target for data breaches or cybercrimes, but this is not necessarily true. Verizon’s 2018 Data Breach Investigation Report actually shows 58% of the victims in incidents reported to them in 2017 were small business owners.

That is more than half of the cases reported to Verizon. Clearly, there is a need. But how does cyber insurance benefit small businesses?

1) It acts as a second line of defense.

In the age of the internet, no business should be without a cybersecurity system in place. Clients and customers entrust their private information, including credit card and bank account information, to the businesses they work with. Once they give it out, they expect their business partners to protect that information as if it were their own.

No system is perfect, however. Cyber liability insurance can act as a second line of defense if cybersecurity is breached by allowing business owners to offer remedies once it has occurred.

2) Your business will not get wiped out.

As many businesses who have fallen victim can tell you, it gets expensive to deal with the fallout from these incidents. Potential costs include:

  • Fines imposed on your business or claims filed against it
  • Lost business on days you are closed down to investigate what happened and the extend of the damages
  • Lost sales due to the damage to your business’s reputation
  • Installing new security systems or updating the systems already in place
  • Goodwill gestures like free credit monitoring for a certain period of time for customers and extra discounts and service promotions

For small businesses, it can be a fatal blow. In 2016, Small Business Trends reported that 60% of all small businesses that are on the receiving end of a cybercrime or data breach go out of business within six months of the incident occurring. No one wants it to be them, but it happens.

While having an insurance policy will not prevent events like these, you can focus on figuring out what happened and how to make things right with your customers and business partners.

Protect your small business with Harbor America

Looking for more ways to protect your small business? Click here for a free guide. For more help with everything from compliance to payroll, be sure to check out Harbor America’s services.


Four Types of Commercial Insurance Construction Businesses Must Have

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Do you operate a construction company? If so, you know that your business is more at risk for injuries and property damages than most industries. In fact, on an average day in the United States, two people die from injuries linked with construction sites, and 20 percent of workplace deaths are related to construction work.

We’re not trying to scare you. It’s just important to recognize you’re in a business with more risk than many others so you can take the right steps to protect your livelihood and that of your employees. Here are four of the main types of insurance policies a construction contractor must have, along with a few considerations and warnings.

General Liability Coverage

Also known as commercial general liability (CGL) insurance, general liability insurance is the insurance policy that’s the most common. This type of policy provides insurance against liability that’s related to property damage and bodily injury. For example, it protects your company’s assets and pays for medical costs and other obligations. It also covers expenses from property injuries and damages by your employees or those caused by you.

Builder’s Risk Insurance

This type of commercial insurance policy is designed to protect people insured from various hazards during the construction process, such as fire, storms, hail, lightning, wind, and vandalism. In most cases, general contractors are required to buy a builder’s risk insurance policy that insures them and their subcontractors.

The policy may also include the structure being built in addition to the building materials. Besides materials that are already at the building site, the coverage also includes materials that are haven’t even been transported to the workplace. To determine the correct limit of insurance, consider your construction budget.

Commercial Umbrella Insurance

This type of commercial insurance, which is also referred to as “excess liability” insurance, is used for filling in gaps and exclusions to a primary policy. If you operate several large construction sites, you may want to consider an umbrella insurance policy, which is usually a supplement to a CGL insurance policy.

Keep in mind that a CGL policy is limited in what it covers, so you may need more coverage. In other words, an umbrella policy gives you additional coverage that exceeds what would be covered by a CGL policy. Let’s say your CGL policy has already covered $1.5 million for a claim, but that’s all it will pay. However, you still need $200,000 more. When you have a commercial umbrella policy, the remaining cost is covered.

Professional Liability Coverage

Today, an increasing number of contractors are choosing professional liability insurance. This is the result of more and more contractors doing design work. As a result, they take on even more responsibility. Because most CGL policies don’t provide coverage for professional liability, a separate policy is needed. Professional liability insurance covers litigation costs from omissions and errors that can result in losing client investment or when failing to carry out your duties as a contractor.

Considerations and Warnings

  • If your business involves demolition, grading, excavation, paving, tank installation, and other hazards, you may want to have pollution coverage, which covers third-party claims for property damage and bodily injury.
  • When deciding on insurance requirements for a contract, consider the common risks linked with a construction job to ensure you have enough coverage.
  • Furthermore, when choosing an insurance provider, consider the class of insurance carrier.
  • The two classes of insurance carriers are admitted carriers and non-admitted carriers. While admitted carriers are required to conform to the regulations outlined in the state’s Department of Insurance, non-admitted carriers do not have to conform to these regulations because they aren’t residents. An advantage of choosing an admitted insurance carrier is that the state is responsible for covering the cost of claims that are made to an insurer.
  • Consider that a CGL insurance policy does not include the cost of repairing defective work. It only covers damages that are caused by defective work.
  • The top causes of deaths from construction-related accidents include falls, being struck by objects, getting stuck between objects, and electrocution.
  • If you’re an independent construction contractor, it’s even more critical you have the right insurance coverage. This is because you’re the sole proprietor, making your personal items at risk when you’re facing legal disputes.

Commercial Insurance Solutions from Harbor America

At Harbor America, we offer a wide range of commercial insurance solutions. Starting a new business can be risky, and this is especially the situation for construction contractors. Download our free eBook and find out more about how you can protect your business.

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Does Your Construction Company Have Adequate Commercial Insurance?

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As a construction company, you want to be sure that you have the right insurance to help cover any eventuality. Insurance helps protect you, your employees, and your customers, providing the necessary funds that will cover any problems outside your control on the job site. Accidents happen, both on the job site and off, and you want to make sure that they won’t pull your business under. Inadequate commercial insurance can bring your business crashing down around you–but the right types of insurance can transform your success and ensure that your goals aren’t derailed by an accident.

Step One: Checking Kinds of Insurance

As a construction company, there are several kinds of insurance that you’ll need to carry in order to protect your business and your employees. Commercial insurance often isn’t a one-size-fits-all policy, and one type of coverage won’t protect you from other types of accidents. For this reason, it’s important to make sure that you have all of your bases covered.

Workers’ compensation insurance: When you’re in charge of a construction company, you know how easy it is for accidents to occur on the job site, even with proper safety precautions in place. Unfortunately, some of those accidents can put your employees out of work for a while or result in significant medical charges. By procuring workers’ compensation insurance, you’ll ensure that you have the funds on hand to pay those costs.

General liability insurance: A member of the general public walks across a construction site and is injured by unsecured equipment. You accidentally drop something off of the roof, and someone is injured. Perhaps you make a mistake that results in a costly repair that’s needed for the building. General liability insurance helps ensure that your company is covered in these situations.

Auto insurance: Whether you’re in a company vehicle or you have employees who are heading out to purchase items for the job site–or even to pick up lunch for the crew–it’s important that you carry adequate auto insurance. In the event of an accident when they’re driving, the costs could come back on you–or someone who has been hurt could sue your company. Auto insurance helps bear that weight and protects both you and your employees.

Insuring your equipment: When you have expensive equipment sitting out at the job site, you want to be sure that it’s protected. Insurance helps protect against vandalism, natural disasters, and other potential problems that could destroy your important equipment.

Cyber insuranceToday’s world is highly digital, and there’s a lot of information in your systems. What will your business do in the event of a cyber attack? How will you handle it if your data is compromised? Cyber insurance helps provide protection in the event of those disasters.

Umbrella/excess insurance: Sometimes, the cost of an accident, injury, or other problem will exceed the payment offered by your existing policies. Umbrella or excess insurance helps pick up those costs, ensuring that you won’t be hit hard by the disaster.

Step Two: Ensuring Adequate Insurance

It’s always better to be over-insured than under-insured. In order to determine whether or not you’re able to protect your business adequately with your current insurance, take a look at these factors.

  • What’s the highest level of damage your company is likely to cause? Is your insurance adequate to covering that eventuality?
  • Does your policy cover the details of the construction business? Working with a company that is familiar with construction companies will help provide you with better protection than picking up general liability plans from companies that offer a wider range of services.
  • What’s your deductible? If it’s higher than the ready cash you can put into a problem, you’ll need to increase your coverage.
  • What does a disaster have the potential to do to your company? Are you adequately protected against it?
  • Do you have all the types of coverage necessary for a construction company, or are you missing insurance that could lead to a disaster?

Having adequate insurance coverage is critical for your construction business. While it’s a considerable weight on your budget, it’s also the best way to protect your finances in the event of a disaster. If you’d like some guidance with choosing commercial insurance coverage, managing payroll, or a wide variety of other HR-related services, give Harbor America a call today.