In just the past few months, fires have destroyed several businesses throughout the Salt Lake Valley. A strip center in West Valley City, a pizza business and neighborhood market in Kearns, and four restaurants on Main Street in Salt Lake City went up in flames.
While it’s easy to see why those businesses, and all others, should have insurance for their structures and equipment, there are myriad ways a business can be protected beyond just the brick and mortar.
“There are several reasons why businesses need to be insured, but probably the biggest is the viability of that business after a dramatic loss,” said Kandace Brewster, owner of the Brewster Insurance Group in Holladay. “A business owner could be faced with a lawsuit after an accident, so there are types of insurance that can cover legal costs, as well as the costs to rebuild and loss of income.”
Brewster said insurance coverage may be required by a lender, by state employee compensation insurance, and from a landlord if the space is being rented. She discussed different types of coverage a business owner can choose based on the types of those businesses. Some come to mind immediately.
“Liability insurance is the most common one,” she said. “That’s if someone enters your premises, then slips and falls because there was a wet spot on the floor. If you’re operating a restaurant, maybe someone got sick. Maybe you’re an electrician and you left something plugged in and it started a fire, or you work as a consultant and have personal liability. The premise of liability is someone was injured or something was impacted on your property because of something you were doing.”
That can include liquor liabilities if a customer partakes of a beverage on your premises and they leave and there’s a lawsuit because of something that happens, such as a traffic accident while they were impaired. Auto liability can also help if your business has vehicles and your people are driving them and have an accident.
One of the more common types today is cyber liability. All the data that a business stores on clients — any type of sensitive information, credit cards, Social Security numbers, etc. — if those are hacked, you could be liable. Cyber coverage provides for any lawsuits arising from lost data that wasn’t protected properly or not protected enough. Brewster said it could be ransom — someone wanting you to pay to get data back. It can also cover service that a company provides for victims. The average cyber claim was for $250,000 last year, and the FBI reported 880,000 cyber crimes in 2022, the last year it issued a report.
“It’s definitely on the rise,” she said, “and as people start realizing there’s insurance for it, and money to be paid, agencies are seeing more and more claims.”
So where do you start as a business owner to determine what you do and don’t need for insurance?
“It’s a little more complicated than shopping for home and auto,” Brewster said. “It’s not something that businesspeople normally look for online. I recommend you call an agent that you trust. They’ll look at your business, what you do, what are the risks, what is the exposure, and what’s the potential of things that could happen. They’ll look at policy limits, how much will you need, and they can help you shop for reputable carriers and help you understand the financial ratings of companies you’re looking at — ratings from AM Best, Fitch, Moodys.”
She also warns that those shopping for business insurance should look beyond just the rates.
“The industry does itself a disservice when we hear all the commercials about ‘save this percentage or that,’” she said. “That’s very shortsighted. You have to look at your budget, but business insurance policies vary wildly in terms of what they cover and what they don’t. You want somebody who’s going to help you actually compare those in detail, not just in premiums.”