Most business owners understand the importance of general liability, workers’ compensation, and commercial property insurance. But what about the lesser-known policies—the ones that could make or break your business when unexpected risks strike?
Here are five not-so-common, yet critical, insurance coverages every business in California (and beyond) should have on their radar:
- Employment Practices Liability Insurance (EPLI)
Protects against claims from employees related to workplace issues.
Even the most well-run businesses can face allegations of wrongful termination, discrimination, harassment, or retaliation. EPLI covers legal fees, settlements, and judgments related to these claims—costs that can easily reach six figures or more.
Why it matters: One disgruntled former employee can file a lawsuit, even if the claims are unfounded. Defense alone can be financially draining.
- Cyber Liability Insurance
Covers costs related to data breaches and cyberattacks.
From ransomware to phishing attacks, small and mid-sized businesses are now prime targets for cybercriminals. Cyber insurance helps cover breach response, legal fees, customer notification, and even extortion payments.
Why it matters: A single data breach could expose client information and trigger regulatory fines—along with reputational damage.
- Business Interruption Insurance (Including Utility Service Interruption)
Reimburses lost income and operating expenses if your business is forced to shut down temporarily.
Most business owners think about fire or flood when they hear “interruption coverage,” but what about a power outage or a water main break that halts your operations? Some policies offer extended protection for utility failures that originate offsite.
Why it matters: Losing a week or even a day of income—without any coverage—can put a serious dent in your bottom line.
- Equipment Breakdown Insurance
Covers repair or replacement of machinery due to mechanical failure, electrical surge, or operator error.
This is not the same as wear-and-tear coverage. It kicks in when a key piece of equipment breaks down suddenly and unexpectedly—like a commercial fridge, boiler, or manufacturing press.
Why it matters: Standard property insurance typically doesn’t cover internal mechanical failures. If your business relies on equipment to operate, this policy is essential.
- Hired and Non-Owned Auto Liability (HNOA)
Protects your business when employees use personal or rented vehicles for work purposes.
If an employee runs an errand for the company in their own car and gets into an accident, your business could be held liable. HNOA coverage fills the gap left by personal auto insurance.
Why it matters: Many businesses assume commercial auto is enough—but if you don’t own vehicles, you might still need this to avoid a costly surprise.
Final Thought:
Insurance isn’t just about checking boxes—it’s about protecting your business from the risks you didn’t see coming. These not-so-common coverages could be the difference between bouncing back and shutting down.
If you want to review your current policy or explore these options, contact us for a complimentary risk consultation.
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