Running a successful business means juggling many responsibilities, from managing employees to ensuring customer satisfaction. One crucial aspect that busy business owners often overlook is office insurance. Office insurance is vital for any business operating out of a physical location, protection against potential risks and losses.
In 2022, total incurred losses covered under commercial insurance was $202.7 million. Since then, that total has only gone up. Whether you’re a small start-up or a well-established company, having the right office insurance is crucial so you do not have to take on the financial burden of a loss incident alone.
This article outlines expert recommendations from Brittney Scharver, a commercial staff underwriter at Central Insurance, for adequately protecting your office space. Read on to understand your office insurance options and become equipped with the knowledge to make informed decisions to protect your business.
Understanding Office Insurance
Office insurance is a comprehensive term representing a handful of coverages designed to protect businesses operating within an office space. Whether you own an office building or rent a space within one, understanding the insurance options available can help protect your business against risk.
Common Risks for Businesses
Businesses can face various office-related risks that can lead to significant financial losses without proper coverage. Some of the most common ones include:
- Property damage: Fire, theft, or natural disasters can severely damage office premises and equipment. Offices can be targets for theft due to valuable equipment like computers, office supplies, and proprietary data. A break-in can result in significant losses and disrupt business operations.
- Business Interruption: Unexpected events such as utility outages in the office that affect critical systems like computers or lighting can halt business operations, leading to income losses.
For Example: Imagine your office building’s air conditioning system malfunctioning during a summer heat wave. It will take a week to repair the cooling. Without AC, your workspace is inoperable, and you can experience significant losses when employees cannot come to work for a week.
- Liability issues: Accidents or injuries on business premises can result in costly lawsuits. If a client, vendor, or visitor slips, trips, or falls on your property, your business could be liable for medical expenses, lost wages, and legal fees. Even seemingly minor incidents can result in substantial claims.
- Cyber Threats: Businesses’ increasing reliance on digital systems exposes them to cyber-attacks and data breaches. Offices rely on technology and interconnected devices, making them prime targets for cybercriminals
Did You Know: In 2023, there were 2,365 daily cyber attacks, with 343,338,964 victims.
While these are some of the typical risks facing businesses that operate from office buildings, there’s always room for customizing your coverage based on your specific class, size, or complexity of business. Talking to your insurance agent is always a great start to getting the comprehensive coverage your company needs.
Six Types of Office Insurance Your Business Might Need
Several policies are available, each covering different aspects of office-related risk. Scharver lays out some of the essential coverages you need with real-world examples below:
1. Property Insurance
Property insurance covers damage to a physical location and its contents caused by events like fire, theft, or natural disasters. This insurance protects your office building, equipment, furniture, and inventory against unexpected events.
“If a fire were to break out in your office, property insurance could cover the cost of repairing the building and replacing damaged equipment,” Scharver explains. Without this coverage, you would face substantial financial hardship for your business to recover.
Learn More: What Commercial Building Insurance Do You Need for Your Business?
2. General Liability Insurance:
General liability insurance protects against bodily injury, property damage, and personal injury claims. “If a client were to trip or fall in your office building and sustain an injury, general liability insurance may cover their medical expenses or any legal fees associated with the claim,” Scharver says.
3. Business Interruption Insurance:
Business Interruption insurance compensates for lost income if a covered event disrupts your business operations. This coverage helps businesses maintain financial stability during unexpected downtimes.
Imagine a severe thunderstorm damaging your office premises and electricity systems. While your business is closed for several weeks due to repairs, Business Interruption insurance may compensate you for the lost income.
4. Equipment Breakdown Coverage
Equipment Breakdown coverage protects against the costs associated with the sudden and accidental breakdown of essential equipment. This insurance can cover repair or replacement costs and any resulting business interruption losses.
“This is a big one for medical or research offices that may have a lot of expensive equipment and machinery,” Scharver explains. “If something goes wrong or things break down and cause a loss, Equipment Breakdown can cover some of that equipment.”
5. Cyber Suite Insurance
Cyber Suite insurance covers losses related to data breaches and cyber-attacks. This type of insurance is crucial in today’s digital age, where cyber threats are increasingly prevalent.
Imagine your company experiencing a data breach that compromises sensitive client information. Cyber Suite insurance may cover the costs of notifying affected clients, legal fees, and credit monitoring services, helping you manage the aftermath of an attack.
Did You Know: An estimated 54 percent of companies say they have experienced one or more attacks in the last 12 months. Many offices, especially small and medium-sized businesses, may not invest sufficiently in cybersecurity due to budget constraints or a lack of awareness, making them attractive targets for cybercriminals looking for easy opportunities.
6. Professional Liability Insurance
Also known as Errors and Omissions (E&O) insurance, Professional Liability insurance covers legal fees and damages if your business is sued for negligence or mistakes in the services provided. For more information, visit our blog post on Professional Liability insurance.
“If I have a veterinarian’s office and I were to do something wrong during a surgical operation, Professional Liability coverage would cover negligence in the service I’m providing,” Scharver says.
How to Evaluate Your Office Insurance Needs
Evaluating your office insurance needs involves assessing the specific risks associated with your business and determining which types of coverage are necessary. Here, Scharver shares three steps to start your search for office insurance:
1. Conduct a Risk Assessment: Identify potential hazards and assess the likelihood and impact of these risks. Understanding the risks facing your office premises and the businesses that operate within it can help you select the best policies to stay safe.
2. Review Current Coverage: Evaluate your existing insurance policies to identify gaps in coverage. Insuring an office of any size can be overwhelming. Reviewing and understanding your current coverage can help you and your agent decide what other policies you need.
Learn More: How often should you update your insurance coverage?
3. Consult an Insurance Professional: Seek advice from an experienced insurance agent or broker who can provide tailored recommendations based on your business’s unique needs. With an agent by your side, you can adjust your coverage limits, deductibles, and premium costs to ensure the perfect balance of manageable costs and adequate protection.
Get In Touch: Central agents are always prepared to assist you with these steps to get office insurance coverage. Find an agent near you.
Finding the Right Office Insurance Provider
The right insurance provider can make all the difference when the unexpected happens to your office space. Now that you understand your office insurance options, you can begin carefully evaluating your needs so you can research with confidence.
Central Insurance has been writing commercial property insurance since 1876. Whether you’re looking to insure an office building you own or protect your assets and employees in an office space you rent, Central has you covered. What’s more, on top of exceptional coverage, Central also offers valuable loss control resources for our commercial policyholders.
At Central, dedicated loss control specialists will work with you to ensure your building is safe. “A member of the Loss Control team can come to survey your office and recommend safety changes,” says Scharver. Maybe they notice that your roof needs replaced, equipment isn’t set up correctly, or your storage practices have a fire hazard. Our Loss Control team can identify these things to help you mitigate losses.”
The Central Difference
Central’s dedicated, people-first team focuses on adding value to our commercial partnerships. Businesses that operate in office spaces can avoid costly insurance claims by partnering with an independent Central agent to design an insurance plan that ensures security and peace of mind.
