Office insurance guide
Why offices need insurance
If you operate out of an office, you already have plenty of fixed costs, from software to utilities to your commercial lease. Are you unsure if you want to add insurance to the budget?
There are several good reasons why you may need insurance.
- Double-check your lease. Your landlord or leasing company may contractually require you to take out certain kinds of insurance.
- While you may not have yet sustained an office injury much worse than a paper cut, there’s always the chance that an employee or visitor could slip on a recently mopped floor or have an allergic reaction to something in the office. In these cases, your business could be held liable.
- Computers and other electronics are essential to your day-to-day. If theft or a natural disaster damages your property, you could face steep replacement costs and interrupted business.
Next, we’ll go over five kinds of insurance that can help cover your liability.
General liability insurance
General liability insurance is the bread-and-butter of small business insurance. This kind of insurance is designed to provide legal defense and coverage for third-party incidents like the following:
Bodily injury – Your office bathrooms are cleaned regularly. But should someone slip and fall on the wet floor, injuring themself, they could hold you responsible for the cost of their medical bills.
Property damage – Clients and vendors visit your office with their laptops in tow. Should you spill your coffee and destroy a device, you could be held liable for the cost of its repair or replacement.
Personal and advertising injury – You advertise your company’s services using every trick in the book, including taking inspiration from successful campaigns and highlighting your advantage over the competition. But should another company sue you for plagiarism or libel, you could be held responsible.
As we noted, general liability insurance covers non-employee third-party claims—claims from clients, visitors, and bystanders. That means it doesn’t cover injury to your employees or damage to your own property (more on those coverages later).
Professional liability insurance
Is there a chance that your client could sue you for bad advice or professional services? Then you need professional liability insurance.
Say, for example, that you’re a logistics company and you advise your client to work with a specific vendor. Should their shipment fail to arrive before the busy holiday season, they could sue you for their lost profit because they were unable to complete a job for their client.
Also called “errors & omissions” (E&O) insurance, professional liability insurance is designed to provide coverage for companies that give their clients professional advice resulting in financial loss. If this sounds like something your business could face, take out coverage.
Workers' compensation insurance
If an employee becomes injured, ill, or disabled as a result of their work in the office, they could put a serious dent in your bottom line—unless you have workers’ compensation coverage.
If you have employees, workers’ compensation insurance is required in almost every state. If you fail to adequately cover your employees, you could face steep fines in addition to lawsuits. Whether or not it’s legally required, workers’ compensation insurance protects your business from the financial consequences of a workplace injury or illness:
Injury – From paper cutters to heavy boxes and beyond, the modern office environment is not without peril. If an employee is injured on the job, workers’ compensation could cover the cost of their treatment, lost wages, rehabilitation and retraining, if necessary.
Disability – If your employee develops a chronic condition like carpal tunnel, workers’ compensation can help cover treatment and lost wages, even if the disability is a partial one. Besides these obvious benefits, workers’ compensation often shields your business from potential lawsuits that could otherwise arise from workplace accidents. Having this type of insurance also protects you from being fined for failure to carry state-required insurance.
Coverage for your property
As we explained, general liability insurance can provide coverage for third-party property damage, but it cannot cover the damage or loss-of-use of your own business equipment.
There are plenty of good reasons to cover your property. If a natural disaster damages your hardware, replacing computers could be costly.
But how do you cover them?
A few common options include:
Commercial property insurance
This kind of insurance covers your place of business, its premises (your building, signs, etc.), and the equipment inside. Depending on the specifics of your commercial property insurance policy, it may also cover business interruptions due to covered loss or damage to property
Inland marine insurance
Only need to cover your equipment on the job? When you take out a monthly general liability insurance policy with Thimble, we automatically bundle this as optional Business Equipment Protection. This means you can protect your tools (or rentals) while you’re using them. In the insurance world, this is commonly known as inland marine insurance.
Business owner’s policy (BOP)
Some insurers bundle coverages such as general liability insurance, commercial property insurance, and business interruption insurance into one plan, known as a business owner’s policy or BOP. The coverages within a BOP may vary by insurer, but this is a package policy designed to cover the risks of small-to-medium businesses with permanent business premises, such as a workshop, warehouse, or office.
Assess your lease and the value of your equipment to choose the right policy for your office.
As an office-based company, you likely interact with sensitive client data. What happens if it gets lost or damaged? Even if your general liability insurance covers property damage, it probably does not cover damaged data.
Likewise, commercial property insurance usually does not cover intangible assets.
Data breaches are a significant issue, and if you lose valuable data, you might face issues including:
- The cost of retrieval or ransoms
- Business interruptions
- Client lawsuits
In cases like these, cyber insurance can come to the rescue and help cover the costs associated with getting your business back on track.
Take out insurance and grow your business
planning. Others can be made and implemented within a split second. When it comes to covering your assets, don’t waste precious time. As long as you’re uninsured, you’re vulnerable to a host of issues, from data theft to liability lawsuits.
Assess your risks and decide which of the following policies could benefit your business:
- General liability insurance
- Professional liability insurance
- Workers’ comp
- Property insurance
- Equipment insurance
- Cyber insurance
Then, go ahead and make your purchase. You’ll have that much more time in your next leadership meeting (and who doesn’t love more meetings?) to discuss hitting your next major milestone.