Commercial Umbrella Insurance Policy Information
Commercial Umbrella Insurance. Does you business need an commercial umbrella excess liability policy? Any company in business in today's modern world is subject to claims of wrongdoing and/or negligence. With an commercial umbrella insurance policy in place, the fallout from these types of lawsuit is minimized and mitigated.
In the litigious environment in which we live, people are seemingly looking for a reason to sue a company, business, or individual and the excess liability policy can cover damages that exceed the limits of your underlying liability insurances.
Commercial commercial umbrella insurance is excess liability that protects your business from lawsuits with rates as low as $47/mo. Get a fast quote and your certificate of insurance now.
Below are some answers to commonly asked commercial umbrella questions:
- How Much Does Commercial Umbrella Insurance Cost?
- What Is Commercial Umbrella Insurance?
- Do I Need Commercial Umbrella Insurance?
- What Does Commercial Umbrella Insurance Cover?
- Do I Need A Commercial Umbrella Policy If I Have An LLC?
- What Are The Differences Between Commercial Umbrella & Excess Liability Policies?
- Umbrella or Excess - Which Is Better?
- What Are The Differences Between Commercial Umbrella & Excess Liability Policies?
- What Are Common Commercial Umbrella Insurance Coverage Gaps?
How Much Does Commercial Umbrella Insurance Cost?
The average price of a standard $1,000,000 Commercial Umbrella Insurance policy for small businesses ranges from $47 to $99 per month based on location, underyling policies, payroll, sales and experience.
What Is Commercial Umbrella Insurance?
The Insurance Services Office (ISO) Commercial Liability Umbrella is a stand-alone coverage form that contains its own coverage, exclusions, and conditions. It provides excess limits over General Liability, Automobile Liability, Employers Liability, and other underlying liability coverage forms or policies. In addition, and because it is a stand-alone coverage form, it may include coverage that underlying coverage forms or policies do not include or provide.
Do I Need Commercial Umbrella Insurance?
Accidents are unpredictable. Some accidents are very small. Others trigger catastrophic events in the lives of the injured parties. Are your policy limits sufficient to protect you if a person you injure must have multiple lifesaving surgeries or requires 24-hour care for the rest of her life? If not, your business capital could be required to make up the difference.
The commercial liability umbrella coverage form can provide the limits you hope you never have to use but that could save your business from bankruptcy. There are a number of reasons that an commercial umbrella insurance policy may be right for you. Some of them include:
- You have professional liability coverage in force, but it might not be sufficient to cover your needs, including any payouts to litigants and the legal fees incurred to defend yourself in court.
- Your business has significant assets to protect. Remember that if a monetary award is quite significant, you may be asked to sell off assets to cover any award not met by your insurance.
- Your company runs a high risk of claims because of the service or products that you provide or sell. For example, a dog walking business is generally a less-risky endeavor than a sky-diving instruction business.
- The work you do is prone to litigiousness. Some professions see more litigation than others; a doctor is more apt to be sued than a guy providing landscaping services.
What Does Commercial Umbrella Insurance Cover?
Commercial liability umbrella coverage begins when your other coverage ends. Umbrella protection applies over the limits of any other coverage forms. The most common underlying coverages are:
- Commercial General Liability
- Commercial Auto Liability
- Workers Compensation / Employers Liability
Other underlying liability coverage may also be listed, subject to insurance company underwriting guidelines. Keep in mind that the umbrella does not respond to a coverage unless the underlying coverage form also covers it.
The insurance company pays on the insured's behalf because of bodily injury or property damage that this insurance covers. It pays only the ultimate net loss that exceeds the limits available from underlying insurance or the self-insured retention.
The insurance company also has the right and duty to defend the insured against lawsuits that seek those covered damages. This right and duty applies when the underlying insurance does not provide coverage or when the underlying limits are used up paying claims and settlements. The insurance company has the right to participate in defending any suit that seeks damages.
At its option, the insurance company can investigate any claim and settle any lawsuit that may result but:
- The amount paid for damages is limited as described in Limits of Insurance.
- Its right and duty to defend ends when the limits of insurance are used up by paying judgments or settlements for bodily injury and property damage liability and personal and advertising injury liability.
The only other obligation or liability to pay amounts, perform acts, or provide services is as Supplementary Payments provides for bodily injury, property damage, and personal and advertising injury liability coverages.
Underlying coverage may be subject to a sublimit. In that case, there is no coverage in the umbrella for the coverage subject to the sublimit unless the sublimit is listed on the declarations as part of the underlying coverage.
Coverage applies only if the bodily injury or property damage:
- Is caused by an occurrence that takes place in the coverage territory
- Occurs during the policy period
- Was not known to have occurred before the policy period began
Bodily injury or property damage that takes place during the policy period and that no insured knew about before the policy period began includes any continuation, change, or resumption of that injury or damage after the policy expires. Bodily injury or property damage is determined to be known at the earliest date that any insured:
- Reports the bodily injury or property damage to the insurance company
- Receives a verbal or written demand or claim for damages because of the injury or damage
- Becomes aware of the injury or damage occurring or about to occur by any other means
Bodily injury damages include damages that any party claims for care, loss of services, or death of the injured person.
Any Company Can Be Sued For Negligence Or Wrongdoing
Now more than any time in history, people are more than glad to lodge a complaint against a business, even if the complaint has little or even no merit. When an individual feels wronged or jilted in some way, the first thing that comes to mind is to make the company offending them pay. Many people see a business as having deep pockets, even if the business is small and doesn't have a lot of revenue. With business commercial umbrella insurance, your business enjoys a heightened level of protection from such claims, and should your business find itself paying an exorbitant amount in a claim, this insurance can be invaluable.
A commercial agent working with experiencing writing business policies is a go-to source for getting the right commercial umbrella insurance policy. An agent with experience can be helpful in recognizing the risks that your business faces and helping you to find the right level of protection to put a shield between you and potential litigants.
Nine Reasons To Buy Commercial Umbrella Coverage
- It Protects What's Most Valuable - An umbrella policy is smart business and provides greater peace of mind. It protects your employees, assets, hard work, reputation, and future.
- A Million Dollars Isn't What It Used to Be - Lawsuits frequently exceed the standard $1,000,000 per claim limit when people get injured. Multimillion-dollar settlements are becoming much more common.
- Losses Are Increasing - Advances in medical technology and prescription drugs have increased the costs of medical care, and new exposures with no historical loss experience (e.g., technology, foreign liability, identity theft, global warming) are on the rise.
- It Can Safeguard Against Auto Exposure - Auto crashes are the leading cause of umbrella claims. In the U.S., there's one auto-related injury every 13 seconds and one fatality every 15 minutes. Cars are just as likely as large trucks to cause a severe accident, and driver distractions are growing due to interactions with phone calls, texting, and GPS.
- Settlement Awards and Tort Costs Are Rising - Today's primary limits may not be enough for claims that take years to settle. Even though a claim may take several years to resolve, a jury will often consider an award in "current" dollars.
- Contractual Requirements Must Be Met - Umbrella policies allow you to respond quickly and more affordably to changes brought about by lease, job site, vendor, and municipal requirements.
- It Ensures Business Continuity - Legal costs, judgment awards, and settlements outside existing policy limits can cripple a business. Consider who will pay defense costs, manage a large claim, manage a claim in a faraway jurisdiction, and find the right legal experts to handle a complex claim.
- Deep Pockets Attract Claims - Your business's prominence can make it a target for legal action, even when there's a small percentage or question of actual liability.
- More Coverage Affordably - Commercial umbrella policies offer additional protection at a reasonable cost.
Commercial Commercial Umbrella Insurance and Your Business
Lawsuits in the business world are filed each and every day. Do you know your own business' risks?
Big businesses are not alone in their risk for legal action against them. Small businesses and mid-sized enterprises are also vulnerable, perhaps even more so. Any business of any size can be targeted, and even a minor lawsuit can cost a lot of money to dispose of, including legal fees for representing claims without merit.
Some scenarios that often leave businesses at risk of being sued include:
- An employee posting something deemed damaging about another business or individual on a social media network from a company computer.
- Advice rendered by an employee causes a client to lose money.
- A customer coming into the office for a consult slips in ice on the pavement out front and is inured.
- A bartender serves too many beers to someone who ends up in an accident and kills someone.
- A waitress drops a hot cup of coffee on a customer and causes a burn.
- An adjustment by a chiropractic professional leads to the patient's injury.
- A product you sell causes people to become ill or die.
- An employee in a company car runs a red light and causes an accident.
These are real world examples of accidents that have occurred and been adjudicated in a court of law. It is impossible to know in advance if an event will occur, which is why an commercial umbrella insurance policy makes sense. The policy kicks in to pay any excess liability not covered by your standard business insurance policy.
Do I Need A Commercial Umbrella Policy If I Have An LLC?
While an LLC structure provides some protection to businesses when it comes to such claims, there is also such a thing as 'piercing the corporate veil.' In this instance, if the plaintiff can provide evidence that the LLC and business owner were inseparable, then the business owner can be held personally liable, leaving his personal assets open to seizure.
Because of this, even if your business is set up as an LLC, having that extra layer of protection in place can be fundamental to keeping your business on the right track and progressively growing, even in the face of claims.
What Are The Differences Between Commercial Umbrella & Excess Liability Policies?
Commercial Umbrella - The commercial liability umbrella coverage form is complete. It has its own insuring agreements, exclusions, conditions, limits, and definitions. It refers to the underlying coverage forms or policies but the insurance it provides is based on the coverage form itself.
Excess Liability - Excess policies are dependent policies. They are based on the underlying coverage instead of having their own insuring agreements, exclusions, conditions, and definitions. They do not add to that underlying coverage.
Umbrella or Excess - Which Is Better?
Umbrella policies were originally designed to offer additional limits and cover some of the gaps in the underlying coverage. They were not simply increased limits silos. They also provided a canopy or an umbrella that offered the insured a measure of protection from certain limitations in the underlying. If the umbrella covered something that the underlying did not cover, the insured paid a self-insured retention, usually in the range of $10,000 to $50,000, and then had coverage up to the umbrella's limit.
However, as primary commercial general liability coverage forms and policies became broader, the umbrella's additional coverage was reduced. It did not change but its coverage became narrower because the primary commercial general liability coverage became broader.
From the insured's perspective, there are no surprises or excitement in excess coverage forms and policies. All coverage disputes arise from the underlying coverage. Once the primary coverage is determined, the excess follows form by providing additional limits up to its ultimate limit. Excess coverage allows easy comparisons based purely on price and capacity.
From the insurance company's point of view, excess coverage forms, and policies can be very exciting, and this is one reason why they may be more difficult to obtain. The insurance company must review and underwrite the underlying coverage and decide if it wants to assume the coverage provided. This is especially problematic when the underlying coverage forms, or policies are non-standard or have unique or manuscript coverages and endorsements.
Umbrella underwriters are more confident when they price commercial liability umbrella coverage because they deal with their own coverage form. They do not have to take the extra step to research or analyze another carrier's underlying coverage forms or policies.
What Are Common Commercial Umbrella Insurance Coverage Gaps?
Not Insuring All Parties
The best case scenario is that the parties covered as insureds under an umbrella policy will be identical to those covered by the primary general liability policy.
Commercial umbrella insurance coverage gaps can occur if the entities listed in the umbrella declarations differ from those listed in the declarations in the commercial general liability policy.
Following are some examples of some differences that can cause coverage gaps:
- Some insureds covered under one policy may not be covered under the other.
- Both policies may cover the same entity, but the scope of coverage is not the same.
- The standard general liability policy excludes coverage for past and unnamed partnerships, limited liability companies, and joint ventures.
- Assuming that the umbrella policy provides follow form coverage for any additional insureds added to the underlying policy after that policy's inception date.
Improperly Scheduling Underlying Policies
A commercial umbrella policy includes a schedule of underlying insurance, which lists the primary policy or policies over which the umbrella or excess policy provides excess coverage.
Accurate and complete information in the schedule of underlying insurance is critical. If any of the policy information is incorrect or missing, coverage gaps may occur.
The umbrella insurer has issued the policy on the assumption that the information in the schedule is accurate. It is up to the insured to make sure the information is correct.
Nonconcurrency Between The Umbrella & Underlying Policies
The commercial umbrella policy and its underlying policies should have the same inception and expiration dates.
An umbrella policy is said to be "concurrent" with the underlying general liability policy if the umbrella and the general liability have the same inception and expiration dates. Coverage gaps can arise when the effective dates of an umbrella differ from those on primary policies.
This results in a coverage gap for occurrences that take place outside the policy period of the commercial umbrella but during the policy period of the underlying coverage.
Using Occurrence Form Over Claims-Made Underlying
Mixing coverage triggers (claims-made or occurrence) in a layered liability program can result in gaps in coverage where one policy will cover liability losses but the one below or above it does not.
Conflicts between the occurrence umbrella and underlying claims-made coverage may also appear in the umbrella's "drop down" provisions.
Purchasing Lower Than Required Primary/Underlying Limits
An umbrella insurer issues an umbrella policy on the condition that the insured has obtained and will maintain the required limits of underlying coverage.
If the insured does not comply with these requirements, modern commercial umbrellas contain provisions saying the umbrella will apply as if the underlying insurance had been maintained. This means the insured must pay coverage gap and must pay all damages between the reduced limit and the original attachment point of the commercial umbrella policy.
No Coverage for Punitive Damages
Umbrella policies that exclude or preclude punitive damages coverage, where such coverage is legally permissible, should be avoided. Punitive damages insurance coverage is not permitted in all states, but, where it is permitted, a lack of punitive damages coverage can present a major coverage gap.
'Real Life' Court Cases Involving Commercial Umbrella:
Motiva Enterprises, LLC, Plaintiff-Appellant, v. National Union Fire Insurance Company of Pittsburgh, Pennsylvania, Defendant-Appellee
National Union Fire Insurance Company (National) provided Motiva Enterprises, LLC (Motiva) a $25 million layer of liability coverage. National was sued by Motiva when, after a large loss, the insurer refused to provide coverage.
Motiva, after a negotiation it handled without National, settled a loss with a couple who sued for the injuries the husband suffered in a Motiva refinery explosion (an acid storage tank erupted). Before that settlement, National had offered to defend Motiva against the claim, subject to a reservation of rights. Motiva settled the loss for nearly $17 million and then asked National for reimbursement. After National denied the claim, based on breach of their policy's consent-to-settle and cooperation provisions, Motiva sued the insurer.
Motiva asked a court to rule that the company did not breach the policy. It argued that, since National only offered to defend them under a reservation of rights, it was no longer bound to fulfilling any other policy provisions. The court ruled against the manufacturer and Motiva appealed.
The higher court reviewed both parties' arguments. Motiva stated that there was no breach since its insurer did not offer an unqualified legal defense of the claim. Motiva also argued that, according to state law, the insurer could not refuse to pay the claim unless it proved that its rights were prejudiced. National countered with its position that it still had the right to be involved with any settlement discussions. It also argued that Motiva's action was prejudicial and that Motiva also failed to cooperate with the insurer.
The records showed that Motiva requested that National send a representative to a mediation between Motiva and the injured party. However, Motiva asked the representative to leave the meeting. Afterwards, without the National representative present, Motiva finalized the loss settlement. Prior to the settlement, Motiva had also refused to provide National with copies of legal paperwork related to the claim it just agreed to settle.
After reviewing several related cases, the court held that National's choice to reserve its rights did not affect its requirement that an insured seek permission before agreeing to a settlement. The court also held that the insurer was justified in expecting the insured to cooperate with its efforts to investigate the claim. The higher court viewed Motiva's unauthorized settlement as prejudicing National's rights. The lower court ruling in favor of the insurer was affirmed.
(Motiva Enterprises, LLC, Plaintiff-Appellant, v. National Union Fire Insurance Company of Pittsburgh, Pennsylvania, Defendant-Appellee. U.S. Court of Appeals, 5th Circuit. No 05-20139. Filed March 28, 2006.)
Fortman, Plaintiff, Appellant V. Safeco Ins. Co. Of America, Defendant, Respondent
A three-year-old girl was permanently injured when thrown from a moving car driven by her mother. Claims in behalf of the girl were settled with all defendants except the manufacturer of a lock and handle that secured a rear-hinged door, from which the girl was apparently thrown.
The record revealed that the lock manufacturer's primary insurer repeatedly refused to settle before trial within its $300,000 general liability policy limit. When the insured settled during trial, the primary insurer contributed its $300,000 policy limit and the insured's excess insurer contributed $1,125,000 of its $2 million excess policy limit.
The excess insurer assigned to the injured girl its right of equitable subrogation against the primary insurer. In the ensuing litigation, the trial court granted summary judgment for the primary insurer and dismissed the case. It concluded that an action of this type required that there had been a judgment against the primary carrier's insurer in excess of the policy's limits; not the case here. Its decision was also influenced by the fact that the jury in the underlying personal injury lawsuit had not assigned a degree of liability to the lock manufacturer, as it had to the car manufacturer and driver. The injured girl appealed the decision on her equitable subrogation action.
It was the duty of the appeal court to decide ". . . .whether the absence of a judgment in excess of (the insured's) primary policy limits, and the underlying jury determination absolving (the insured) of responsibility for (the girl's) injuries, preclude the (injured girl's) subrogation action."
The court noted that the primary insurer had rejected a $125,000 settlement offer before trial, offering $7,500 instead. It increased its offer to $25,000 during trial. It did not communicate these offers to the insured or the excess insurer, nor did it inform them of the progress of the litigation. The court said that the excess insurer would have paid nothing if the primary insurer had settled for any of the amounts offered.
The primary insurer cited cases requiring a prior excess judgment as a prerequisite to bad faith suits by insureds against their insurers. They required the showing of the existence, not actual payment, of an excess judgment. The appeal court said that "in the equitable subrogation context before us, the excess insurer must show it actually paid an amount in excess of the primary insurer's policy limits." The existence of an excess judgment was found not to be a prerequisite.
The judgment of the trial court was reversed in favor of the injured girl and against the primary liability insurer.
(Fortman, Plaintiff, Appellant V. Safeco Ins. Co. Of America, Defendant, Respondent. California Court Of Appeal, Second District, Division One. No. BO43643.)
Types Of Small Business Insurance - Requirements & Regulations
Perhaps you have the next great idea for a product or service that you know will appeal to your local area. If you've got a business, you've got risks. Unexpected events and lawsuits can wipe out a business quickly, wasting all the time and money you've invested.
Operating a business is challenging enough without having to worry about suffering a significant financial loss due to unforeseen and unplanned circumstances. Small business insurance can protect your company from some of the more common losses experienced by business owners, such as property damage, business interruption, theft, liability, and employee injury.
Purchasing the appropriate commercial insurance coverage can make the difference between going out of business after a loss or recovering with minimal business interruption and financial impairment to your company's operations.
Insurance is so important to proper business function that both federal governments and state governments require companies to carry certain types. Thus, being properly insured also helps you protect your company by protecting it from government fines and penalties.
Small Business Insurance Information
In the business world, there are many risks faced by company's every day. The best way that business owners can protect themselves from these perils is by carrying the right insurance coverage.
The The National Association of Insurance Commissioners (NAIC) is the U.S. standard-setting and regulatory support organization. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer review, and coordinate their regulatory oversight.
Commercial insurance is particularly important for small business owners, as they stand to lose a lot more. Should a situation arise - a lawsuit, property damage, theft, etc. - small business owners could end up facing serious financial turmoil.
According to the SBA, having the right insurance plan in place can help you avoid major pitfalls. Your business insurance should offer coverage for all of your assets. It should also include liability and casual coverage.
Types Of Small Business Insurance
Choosing the right type of coverage is absolutely vital. You've got plenty of options. Some you'll need. Some you won't. You should know what's available. Once you look over your options you'll need to conduct a thorough risk assessment. As you evaluate each type of insurance, ask yourself:
- What type of business am I running?
- What are common risks associated with this industry?
- Does this type of insurance cover a situation that could feasibly arise during the normal course of doing business?
- Does my state require me to carry this type of insurance?
- Does my lender or do any of my investors require me to carry this type of policy?
A licensed insurance agent or broker in your state can help you determine what kinds of coverages are prudent for your business types. If you find one licensed to sell multiple policies from multiple companies (independent agents) that person can often help you get the best insurance rates, too. Following is some information on some of the most common small business insurance policies:
|Business Insurance Policy Type||What Is Covered?|
|General Liability Insurance||What is covered under commercial general liability insurance? It steps in to pay claims when you lose a lawsuit with an injured customer, employee, or vendor. The injury could be physical, or it could be a financial loss based on advertising practices.|
|Workers Compensation Insurance||What is covered under workers compensation insurance? This type of insurance protects a business and its owner(s) from claims by employees who suffer a work-related injury, illness or disease. Workers comp typically provides the injured employee with benefits to cover medical expenses, a portion of his/her lost wages, rehabilitation costs if applicable, and permanent partial or permanent total disability.|
|Product Liability Insurance||What is covered under product liability insurance? I pays an injured party's settlement or lawsuit claim arising from a defective product. These are usually caused by design defects, manufacturing defects, or a failure to provide adequate warning or instructions as to how to safely use the product.|
|Commercial Property Insurance||What is covered under business property insurance? General liability policies don't cover damages to your business property. That's what commercial property insurance is for. It protects all of the physical parts of your business: your building, your inventory, and your equipment, giving you the funds you need to replace them in the event of a disaster. If you work from home, you might consider a Home Based Business Insurance policy instead.|
|Business Owners Policy (BOP)||What is covered under a business owners policy (BOP)? This is a policy designed for small, low-risk businesses. It simplifies the basic insurance purchase process by combining general liability policies with business income and commercial property insurance.|
|Commercial Auto Insurance||What is covered under business auto insurance? This type of insurance covers automobiles being used for business purposes. This could include a fleet of business-only vehicles or a single company car. In some cases it might cover your car or your employee's car while they're being used for business. These policies have much higher limits, ensuring you can cover your costs if one of these vehicles gets into an accident.|
|Commercial Umbrella Policies||What is covered under commercial umbrella insurance? This type of policy is a sort of "gap" insurance. It covers your liability in the event that a court verdict or settlement exceeds your general liability policy limits.|
|Liquor Liability Insurance||What is covered under liquor liability insurance? It covers bodily injury or property damage caused by an intoxicated person who was served liquor by the policy holder.|
|Professional Liability (Errors & Omissions)||What is covered under professional liability insurance? This type of business insurance is also known as malpractice oe E&O. It covers the damages that can arise from major mistakes, especially in high-stakes professions where mistakes can be devastating.|
|Surety Bond||What is covered under surety bonds? Bonding is a contract where one party, the SURETY (who assures the obligee that the principal can perform the task), guarantees the performance of certain obligations of a second party, the PRINCIPAL (the contractor or business who will perform the contractual obligation), to a third party, the OBLIGEE (the project owner who is the recipient of an obligation).|
Who Needs General Liability Insurance? - Virtually every business. A single lawsuit or settlement could bankrupt your business five times over. You might also need this policy to win business. Many companies and government agencies won't do business with your company until you can produce proof that you've obtained one of these policies.
Business Insurance Required by Law
If you have any employees most states will require you to carry worker's compensation and unemployment insurance. Some states require you to insure yourself even if you are the only employee working in the business.
Your insurance agent can help you check applicable state laws so you can bring your business into compliance.
Other Types Of Small Business Insurance
There are dozens of other, more specialized forms of small business insurance capable of covering specific problems and risks. These forms of insurance include:
- Business Interruption Insurance
- Commercial Flood Insurance
- Contractor's Insurance
- Cyber Liability
- Data Breach
- Directors and Officers
- Employment Practices Liability
- Environmental or Pollution Liability
- Management Liability
- Sexual Misconduct Liability
Whether you need any or all of these policies will depend on the results of your risk assessment. For example, you probably don't need an environmental or pollution policy if you're running an IT company out of a leased office, but you would need data breach and cyber liability policies to fully protect your business.
Also learn about small business insurance requirements for general liability, business property, commercial auto & workers compensation including small business commercial insurance costs. Call us (855) 767-7828.
Additional Resources For Small Business Insurance
Protect your company and employees with the right commercial insurance policies. Read informative articles on small business insurance coverages - and how they can help shield your company from legal liabilities.
- Small Business
- Business General Liability
- Business Interruption
- Business Liability
- Business Owners Policy (BOP)
- Certificate of Insurance
- Commercial Auto
- Commercial Crime
- Commercial Package Policy
- Commercial Umbrella
- Comprehensive General Liability
- Directors and Officers Liability
- Cyber Liability
- Employers Liability
- Employment Practices Liability
- Event Cancellation
- Fiduciary Liability
- General Liability
- Home Based Business
- Independent Contractor
- Liability Insurance Certificate
- Liability Insurance
- Ocean Marine
- Professional Liability
- Workers Compensation Insurance
- Workers Compensation Insurance Laws
Your small business faces many potential disasters including: fire, floods, theft, equipment breakdown, lawsuits from clients or customers and current & former employees. Any many other risks you haven't even thought about.
A small business commercial insurance program should provide protection for both larger and smaller disasters. The obvious things like fire, flood and theft most business owners think about... but what if a hacker infects your computers with a virus - and files containing private customer information like credit card and Social Security numbers are stolen?
Who is going to pay to fix your customers credit rating etc...? Will your insurance pay for the cost? You need to know that.
Your commercial insurance program should cover events that can close down your company, or cause it to lose revenue. Anything less than that is not enough coverage. Commmercial insurance doesn't cover everything, and all policies have exclusions and limits.
You need a written plan that allows you to get your operations back up and running as quick as possible.