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What Is Business Insurance? – Part 2

Trusted Choice Business Insurance FAQ

Is Business Insurance Tax-Deductible?

According to the IRS, “you can deduct the ordinary and necessary cost of insurance as a business expense, if it is for your trade, business or profession.” You should consult a tax professional if you have questions, or you can refer to IRS Publication 535, “Business Expenses.”

Does Business Insurance Pay for Lawsuits?

You may be surprised to learn that during the average year, 36% to 53% of small businesses and nearly 90% of U.S. corporations are involved in some type of litigation or legal dispute. Even small, home-based businesses run the risk of being sued. Commercial general liability (CGL) is the insurance you need to protect against lawsuits.

CGL covers injuries or damages caused by your company, including products and services you sell. For example, if a customer is hurt on your property, an employee damages someone’s home or you are sued for false advertising, CGL pays for your legal defense and damages up to the limits specified in your policy.

For extreme circumstances, consider purchasing a commercial umbrella liability policy. Note that umbrella policies may exclude intentional harm or punitive damages.

Other specialized policies your Trusted Choice agent can help you explore include:

  • Professional liability, errors and omissions, and malpractice

  • Directors and officers liability

  • Product liability

  • Premises or property liability

  • Employers liability

  • Employment practices liability

  • Environmental and pollution liability

Does My Small Business Really Need Cybercrime Insurance?

Nearly every business is online today, and that makes them vulnerable to cybercrime and data breaches. Cybercrime insurance protects against electronic theft, data loss, network disruption, lost income, and reputational damage.

Most cyber policies also cover customer breach notifications, anti-fraud services, credit monitoring, incident investigations, and ransomware response.

Do I Need Employment Practices Liability Insurance (EPLI)?

EPLI protects your business from legal expenses resulting from employment-related claims such as wrongful termination, discrimination, harassment, retaliation, and more. Defense costs can exceed $300,000 per case. This coverage can often be added to a business owners or commercial package policy.

Does Business Insurance Cover Employee Theft?

Employee theft coverage may be added to a business policy or purchased as a standalone commercial crime policy. Coverage includes embezzlement, forgery, counterfeiting, and wire fraud.

You can also purchase bonds for specific theft protection:

  • Standard fidelity bonds

  • Business service or third-party fidelity bonds

  • ERISA bonds for retirement plan protection

Does My Business Need Flood Insurance?

Flood damage is not covered by standard property insurance. If your business is in a flood zone, a separate flood policy is necessary. Ask your agent about riders for plumbing and sewer line damage too.

What Is Business Income Insurance?

Business income (or interruption) insurance compensates for lost income due to events like fire or natural disaster. It can be part of a BOP or added as an endorsement.

Since the Pandemic, I’ve Worked from Home. Do I Need to Change My Coverage?

Homeowners policies only offer limited business property coverage. If you’ve moved business operations home or have expensive equipment or customers visiting, speak with your agent about additional protection or a home business endorsement.

Why Should I Choose a Trusted Choice Agent for Business Insurance?

Trusted Choice Independent Agents work with multiple insurers, offering personalized service, competitive pricing, and ongoing coverage evaluations. They prioritize your success and work for you — not for a single insurance company.

Find a Trusted Choice Independent Insurance Agent to help protect your business today.