Your small business customers face a plethora of pressures coming at them from all angles, including all sorts of risks and rewards. Their focus is on growing their business, and some of the risks may not be apparent to them. That’s where you come in.
You play a critical role by identifying the insurance risks facing your small business clients and recommending the best solutions to properly mitigate their exposures. Most include critically important coverages, such as property, general liability and business interruption.
They cover many obvious exposures such as fire, theft, burglary, slips and falls, lost income due to a covered loss, and more. However, a strong coverage portfolio will also include coverages for growing exposures such as employment practices liability and cyber liability. They are two types of coverage that could easily be overlooked by small business clients who may feel the risks are more in line with larger businesses.
Employment Practices Liability
Employees and job applicants remain frequent sources of litigation against small businesses and costs can be formidable, according to the Equal Employment Opportunity Commission (EEOC).
In 2017 alone, the EEOC received more than 84,000 charges of discrimination, harassment and retaliation. According to the EEOC, if these lawsuits go to trial the median payout for a discrimination case is $600,985, in addition to the applicable defense costs.
The EEOC reported it received 7,609 sexual harassment charges in 2018. That’s a 13.6% increase from 2017, and retaliation charges accounted for the largest number of charges filed in fiscal year 2018.
Employment Practices Liability insurance protects companies and individuals against loss (damages and defense costs) arising from employment practice disputes.
Cyber Liability
While larger firms may have the information security resources to help combat cyberattacks, many smaller businesses do not. Due to this vulnerability, small businesses are frequent victims of cyberattacks, according to the Verizon 2019 Data Breach Investigations Report. In fact, the report says more than four in 10 data breaches in 2018 involved small businesses.
Cyber liability coverage provides protection when a security breach results in privacy injury, identity theft, network damage resulting in theft of information, including trade secrets, and infection of others’ networks. It also covers costs to comply with applicable laws that require the insured to notify customers or users if a security breach could potentially compromise private information.
Recommend a well-rounded coverage portfolio
At CNA, we have a forward-looking philosophy built on transparency to continuously evolve to meet the needs of our agents and their customers. The CNA Connect® business owners’ policy provides small business clients with broad coverages and more than 300 optional endorsements with increased deductible options and a wide range of limits for Property and General Liability. CNA Connect® is available for more than 600 classes of business.
Our innovative tools and resources, and award-winning automation capabilities make it easier to build your business and serve your clients. Help your small business clients learn more about their coverage needs by providing them with the article 5 Critical Insurance Protections Every Small Business Owner Needs in 2019 and send all inquiries to your local CNA Field Sales Specialist Brittney Dawson at Brittney.Dawson@cna.com.
This article was published in the August 2019 edition of Colorado Insurance News (COIN). To view more articles and read the whole COIN, click here.
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