Are You Covered? What Small Business Owners Need to Know About Insurance Coverage

By: Mathew H. Fry, Esquire

As a small business owner knows, keeping the business running smoothly can be the difference between success and failure.  A key component to keeping your business operating as it should is to purchase insurance to cover some of the calamities that could stop your business in its tracks.  It is always a good idea to protect against common problems that would be covered by insurance.  Some of the most common claims may include the following:

  • Thefts from the business, whether it be from employees or others;
  • Damages from such calamites as a fire, a frozen or burst pipe, or wind and hail damage;
  • Customers or other persons injured on your property, or by your employees while working offsite; and
  • Motor vehicle accidents by employees.

To protect your business from such issues and others, it is a good idea to purchase liability insurance.  Some insurers sell Business Owners Policies, which attempt to cover your business property, motor vehicles, and claims from customers and third parties.  If your business is closed while repairs take place, you can purchase insurance to cover the revenue lost during the time of the repairs.  If your business has particular risks that should be covered by insurance, be sure to identify those risks and discuss it with your attorney, business advisor, or insurance company.  Work with a reputable insurance broker or company to select the coverage that best suits your business.

One of the biggest expenses covered by insurance is lawsuits.  If someone is injured at your business, or by an employee, insurance typically covers these accidents, pays for your attorney, and pays out any settlement or verdict that may result.  This could save tens of thousands of dollars in costs, and the piece of mind afforded will allow you to concentrate on your business.

So now that you have insurance, what happens when you have a claim?  What are the obligations of the insurance company?  The insurance company is only obligated to follow the terms of the insurance policy, but under Pennsylvania law must always act in “good faith” toward the policyholder; if the carrier acts in “bad faith,” this could present the policyholder with a legal remedy against the insurance company.  While there are many possible issues that could constitute “bad faith,” the law requires that the insurance company act reasonably as follows:

  • when investigating a claim;
  • have a good faith basis if denying a claim;
  • must act promptly in the investigation of a claim;
  • make prompt payments when paying a covered claim; and
  • must protect the policyholder in litigation when required under the policy, including, in certain circumstances, protecting a policyholder by paying out a settlement if within the insurance policy limits.

The above examples are just a few of the many issues that can develop when problems arise with an insurance claim.  DiOrio & Sereni, LLP is experienced in handling business related matters, including insurance issues and claims.  If you have any questions about insurance or an insurance claim, or are interested in learning more about what DiOrio & Sereni, LLP can offer your business, please contact Matthew Fry, Esquire at 610-565-5700 or at [email protected].

The Law Firm of DiOrio & Sereni, LLP is a full-service law firm in Media, Delaware County, Pennsylvania. We strive to help people, businesses and institutions throughout Southeastern Pennsylvania solve legal problems – and even prevent legal problems before they occur.  To learn more about the full range of our specific practice areas, please visit or contact Matthew Fry, Esquire at 610-565-5700 or at [email protected]

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The Law Firm of DiOrio & Sereni, LLP, is located in Media, PA and serves clients in and around Media, Glen Riddle Lima, Brookhaven, Wallingford, Newtown Square, Lenni, Springfield, Swarthmore, Chester, Aston, Bryn Mawr, Morton, Woodlyn, Broomall, Gradyville, Folsom, Chester Heights, Crum Lynne, Glen Mills, Marcus Hook, Ridley Park, Drexel Hill, Marple, Bethel, Garnet Valley, Chadds Ford Concord, Chester County, Delaware County, Montgomery County, Philadelphia County.

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