A rider is an insurance modification that adds extra protection to a policy and enables businesses to customize it to their specific needs.
What is a rider?
A rider – also known as an endorsement – extends an insurance policy’s coverage in exchange for higher premiums.
Standard insurance policies do not typically allow for much customization beyond adjusting coverage limits and deductibles. Business owners might choose to add a rider to their coverage if they need specific protection but don’t want to purchase a new policy.
Examples of business insurance riders
Businesses can add many different types of riders to insurance policies. Here are a few examples of how you can adjust coverage:
Errors and omissions insurance
An errors and omissions policy might allow you to add a rider to protect against negligence claims for work you performed before you purchased insurance. Known as prior acts coverage, this endorsement helps pay for attorney, court, and settlement costs if you are sued at a later date.
Commercial property insurance
If your IT business routinely moves computers or other equipment from place to place, a standard commercial property insurance policy may not cover theft or damage that occurs in transit. Adding a floater rider to your coverage protects property that isn’t always stored at one location.
Workers’ compensation insurance
Workers’ compensation insurance won’t usually cover job-related injuries or illnesses that affect independent contractors, but you can add a rider that extends this benefit to cover them.
The pros and cons of insurance riders
Riders allow businesses to fine-tune an existing policy without having to buy another. Some riders won’t increase a policy’s premiums by much, but others may be too expensive or duplicate coverage found in another policy that you already carry.
Your licensed TechInsurance agent can answer any questions you have about riders, including whether adding them to a policy is cost-effective.
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