Beyond the Basics: Essential Specialized Insurance Coverages for Ohio Small Businesses
As an Ohio-based small business owner, it's essential to be aware of specialized insurance coverages that can protect your enterprise from specific risks. Beyond standard policies, consider the following lesser-known coverages:
Employment Practices Liability Insurance (EPLI) in Ohio
EPLI safeguards businesses against claims made by employees alleging wrongful acts such as discrimination, sexual harassment, wrongful termination, and other employment-related issues. Given the increasing number of employment-related lawsuits, having EPLI can protect your company's financial assets and reputation. For instance, if a former employee alleges wrongful termination based on discrimination, EPLI can cover legal defense costs and potential settlements.
Employer's Liability Insurance (Stop Gap Coverage) in Ohio
In Ohio, employers are required to obtain workers' compensation insurance through the state fund, which does not include employer's liability coverage. To bridge this gap, businesses should secure Stop Gap Coverage. This insurance protects employers from lawsuits filed by employees who allege that their injury or illness resulted from employer negligence, covering legal costs and potential damages. For example, if an employee claims that inadequate safety measures led to their injury, this coverage can provide financial protection.
Cyber Liability Insurance for Ohio Small Businesses
With the increasing reliance on digital operations, cyber liability insurance has become crucial. It protects your business from financial losses due to data breaches, cyberattacks, and other cyber-related incidents. This coverage can help manage costs related to data recovery, legal fees, and customer notification processes.
Directors and Officers (D&O) Liability Insurance
D&O insurance protects the personal assets of your company's directors and officers in the event they are sued for alleged wrongful acts while managing the business. This can include claims related to mismanagement, breach of fiduciary duty, or failure to comply with regulations. For example, if a shareholder sues a director for decisions that led to financial loss, D&O insurance can cover defense costs and potential settlements.
Fiduciary Liability Insurance
If your business offers employee benefits plans, fiduciary liability insurance protects against claims of mismanagement of those plans. This includes allegations of errors in plan administration, improper advice, or conflicts of interest. For instance, if an employee alleges that mismanagement of the company's retirement plan led to financial loss, fiduciary liability insurance can cover legal defense costs and any settlements.
By incorporating these specialized coverages, Ohio small business owners can enhance their risk management strategies and ensure comprehensive protection against a variety of potential liabilities.
