🏢 Business Insurance

What Business Insurance Actually Covers

There's no single "business insurance" policy — it's a combination of coverages assembled to match your specific operation. Here are the building blocks:

• General liability (GL) — protects against third-party claims of bodily injury, property damage, and advertising injury. If a customer slips on your floor or you damage a client's property, GL responds.
• Commercial property — covers your building, equipment, inventory, furniture, and signage against fire, wind, hail, theft, and other perils.
• Business owner's policy (BOP) — bundles GL and commercial property into one policy, usually at a lower combined cost. Good fit for small to mid-size operations.
• Business interruption — replaces lost income when a covered event forces you to close temporarily. Pays for ongoing expenses (rent, payroll, loan payments) while you recover.
• Workers' compensation — covers medical expenses and lost wages for employees injured on the job. Required in South Dakota if you have one or more employees.
• Commercial auto — covers vehicles owned or used by the business. Personal auto policies don't cover business use.
• Professional liability (E&O) — protects against claims that your professional services caused financial harm through errors, omissions, or negligence.
• Cyber liability — covers costs related to data breaches, ransomware, and other cyber incidents.

Common Pitfalls and Expensive Gaps

Business insurance is where coverage gaps hurt the most — because they can close your doors. These are the mistakes we see most often:

• No business interruption coverage — A fire or major storm shuts you down for 3 months. Your property insurance pays to fix the building, but who pays the rent, payroll, and loan payments in the meantime? Without business interruption coverage, those costs come out of your pocket — or they don't get paid at all.
• Using personal auto for business — If you or your employees drive personal vehicles for business errands, deliveries, or client visits, your personal auto policy likely excludes business use. A single accident on a delivery run could leave you personally liable.
• Undervaluing inventory and equipment — Replacement costs change. If your policy still reflects what you paid for equipment five years ago, you'll be underinsured when you need to replace it at today's prices.
• Skipping umbrella/excess coverage — A serious liability claim can exceed your GL limits quickly. A commercial umbrella policy adds an additional layer of protection for relatively little cost.
• Ignoring cyber risk — Every business that takes credit cards, stores customer data, or uses email is a target. A single data breach can cost tens of thousands in notification, legal fees, and lost trust — even for a small operation.
• Employee classification issues — Misclassifying employees as independent contractors to avoid workers' comp can result in penalties, back premiums, and personal liability if someone gets hurt on the job.
• Not updating coverage as you grow — You added employees, bought new equipment, expanded your services — but did you update your insurance? A policy that fit your business two years ago may leave significant gaps today.

Running a Business in South Dakota

South Dakota's business landscape has specific characteristics that affect insurance needs:

• Severe weather shutdowns — Hail, tornadoes, and blizzards can force businesses to close for days or weeks. Business interruption coverage isn't optional here — it's essential.
• Tourism and seasonal operations — Black Hills and Badlands-area businesses see huge seasonal swings. If you serve tourists, your liability exposure spikes during peak season, and you need coverage that reflects that reality.
• Construction and trades — South Dakota's construction industry is booming. Contractors need proper GL, workers' comp, and commercial auto — and certificates of insurance are often required before you can bid on projects.
• Main Street retail — Small-town retail businesses are the backbone of South Dakota communities. A BOP is often the most cost-effective way to get comprehensive coverage for a storefront operation.
• Ag-adjacent businesses — Grain elevators, equipment dealers, feed suppliers, and ag service companies have specialized risks that require carriers experienced with agricultural operations.

Why This Is a Job for an Independent Agent

Business insurance is where the independent agent model makes the most difference. Your business isn't like anyone else's, and your coverage shouldn't be either.

An independent agent writes with many different carriers — including specialty commercial insurers that captive agents simply don't have access to. They can build a program that pieces together the right GL, property, workers' comp, and specialty coverages from different companies to get you the best combination of coverage and price.

As your business grows, your agent adjusts your coverage. When you file a claim, they manage it. They're not just selling you a policy — they're a business partner who understands what's at stake.

Helpful Questions to Ask Your Agent

These questions will help you and your agent build coverage that actually matches your operation — not a generic template:

• If a disaster shut me down for three months, does my policy cover lost income and ongoing expenses like rent and payroll?
• Are my employees who drive personal vehicles for work actually covered, or is there a gap between their personal auto and my business policy?
• When was the last time my equipment and inventory values were updated — would the current limits actually cover replacement at today's costs?
• Do I need cyber liability given how I collect and store customer data?
• Is my general liability limit high enough for a serious claim, or should I look at a commercial umbrella?
• If I hire a subcontractor who causes an injury or damage, how does my policy respond?
• Are all my employees classified correctly for workers' comp — and what happens if they're not?