The Hidden Gaps in Commercial Insurance:
Are You Covered?

Running a business comes with risks, and having the right insurance is key to staying protected. But even with coverage, your company might still have gaps that open you to high costs. These gaps can lead to lawsuits, lost income, or significant financial problems. Knowing where and how to fix these risks helps keep your business safe.

Common Coverage Gaps Businesses Miss

1. Business Interruption – Are You Fully Covered?

Business interruption insurance helps replace lost income if your business has to close due to a covered event, like a fire or storm. However, many policies don’t cover certain events like pandemics, cyberattacks, or extended closures. Some also have time limits, meaning coverage could end before your business fully recovers.

Fix It: Read your policy carefully and ask your provider about extra coverage options for unexpected shutdowns.

2. Cyber Threats – Protecting Your Digital Assets

Many business owners think their general liability policy covers cyber risks, but it often doesn’t. A data breach can cost thousands in lost revenue, legal fees, and damage to your reputation. Hackers frequently target small businesses, making protection essential.

Fix It: Get a cyber liability insurance policy that covers data breaches, hacking, and financial fraud.

3. Equipment Breakdown – What’s Not Covered?

Property insurance covers damage from fires or storms but may not include mechanical or electrical breakdowns. If key equipment stops working, repair costs and downtime can quickly increase.

Fix It: Ask about equipment breakdown insurance to cover repair costs and business interruptions.

4. Professional Liability – Do You Have Enough Protection?

If your business provides services, mistakes can happen. General liability insurance won’t cover negligence claims, misrepresentation, or errors.

Fix It: Get professional liability insurance (errors and omissions insurance) to cover legal claims related to your services.

5. Commercial Auto Insurance – Are Your Vehicles Covered?

Many business owners assume their personal auto insurance covers work-related driving. However, most personal policies exclude business use, meaning accidents may not be covered.

Fix It: Ensure you have commercial auto insurance for company vehicles and coverage for employees using personal cars for work.

6. Product Liability – What If Something Goes Wrong?

If you make, distribute, or sell products, you could be responsible if something goes wrong. General liability insurance may cover some risks, but limits might not be high enough.

Fix It: Get product liability coverage to protect against claims of defective or unsafe products.

7. Employee Lawsuits – Are You Protected?

Employees can sue for issues like discrimination, harassment, or wrongful termination. Many assume general liability insurance covers these claims, but it doesn’t.

Fix It: Get employment practices liability insurance (EPLI) to cover legal costs and settlements.

8. Natural Disasters – Are You at Risk?

Standard commercial property insurance may not cover damage from floods, earthquakes, or other natural disasters. Many businesses only find out after a disaster hits.

Fix It: Consider adding flood insurance or other specialized disaster coverage based on location.

9. Goods in Transit – Is Your Property Safe on the Move?

If your business moves products or equipment, standard property insurance might not cover losses during transit.

Fix It: Get inland marine insurance to protect items while being transported.

10. Umbrella Insurance – Extra Protection When You Need It

Big lawsuits can cost more than your policy covers, leaving your business paying out of pocket. Umbrella insurance adds extra protection beyond standard liability limits.

Fix It: Consider umbrella insurance to increase coverage in case of large claims.

How to Make Sure Your Business is Fully Covered

Now that you know about common coverage gaps, here’s how to stay protected:

• Review Your Policies Often – Meet with your insurer annually to update your policy as your business grows.
• Work With a Trusted Insurance Provider – Choose a provider who understands your industry and offers custom coverage.
• Check for Policy Exclusions – Read the fine print and ask about anything not covered.
• Bundle Coverage When Possible – Some insurers offer discounts for combining multiple policies.

Final Thoughts

Insurance protects your business, but coverage gaps can put you at risk. Knowing where these gaps are and fixing them helps keep your business safe. Don’t leave your company exposed—review your policies, ask questions, and ensure you have the proper protection.

Need expert help? B&A can find the best commercial insurance for your business. Visit www.beginassociates.com to learn more and get covered today!