When an Alabama-based manufacturing company was looking for a new insurance provider, The Prewitt Group did what it always does for a new customer. They started by reviewing the company’s current insurance policies. After finding that the company’s building was significantly underinsured, they worked with the customer to increase coverage by $5 million.
Eight months later, the manufacturing company’s building caught fire, leading to a total loss. “Because they were appropriately insured, the company was able to build the plant back and continue operating,” says Andy Prewitt, vice president of The Prewitt Group, a family-owned insurance company based in Birmingham since 1974. “The owner said if they hadn’t switched their insurance, they would have gone out of business because they wouldn’t have been able to cover the $5 million gap.”
Similarly, a business owner in the construction industry recently switched to Mobile-based Portal Insurance. “Upon review of his current policy, the carrier listed a clause that directly excluded the type of work he was doing,” says Bradley Flowers, CEO of Portal Insurance. “Thankfully, we discovered this before he had a claim and not after.”
Examples like these highlight the importance of proper commercial insurance coverage. A recent survey of small business owners showed that 92% have commercial insurance, but only 13% of those who are covered feel fully prepared for risk.
For business owners, there’s no one-size-fits-all approach to insurance. Each business needs the combination of policies that will cover the particular risks it may face. Most businesses have liability risk, cyber risk, injury risk and property exposure, but insurance needs vary based on the type of business, number of employees and other factors.
“A business that owns a large amount of real estate is going to have greater property insurance needs than a business that rents its building,” Flowers says. “A business that involves manual labor with many employees is going to have a greater workers’ compensation risk than someone who’s a solopreneur.”
For most businesses, carrying the right insurance coverage requires more than simply purchasing a generic general liability policy. Business owners and leaders can ensure that their organizations are appropriately insured by working directly with an insurance professional to review their policies, assess their risks and make recommendations.
Don’t Overlook Cyber Coverage
Every insurance professional who commented for this article said the newest and most frequently overlooked type of insurance needed by businesses is cyber liability insurance. Every business that uses email, stores customer data, processes payments or relies on cloud-based platforms is at risk of a cyberattack.
“In today’s hyper-connected world, businesses of all sizes face a growing and relentless threat of cyberattacks,” Flowers says. “From phishing scams and ransomware to data breaches and social engineering schemes, the digital risks are no longer theoretical; they’re operational hazards. Yet despite the headlines and rising financial tolls, cyber insurance remains one of the most underutilized coverages in the commercial insurance portfolio.”
Many small and midsize businesses assume they’re not on the radar of cybercriminals because of their smaller size. However, smaller businesses are often prime targets because they don’t have the same level of defense that larger companies have, and they still have valuable data, Flowers says.
The Prewitt Group has seen a drastic uptick in claims related to cyber liability, wire fraud, identity theft, data breaches, point-of-sale system manipulation and invoice manipulation, and if the businesses that fall victim to these crimes do not have cyber insurance, they are unable to make a claim, says Johnny Prewitt, president of The Prewitt Group.
In addition to applying for cyber coverage, many businesses must also implement controls to help avoid becoming victims of cybercrime. “Some insurance companies will try to breach your system to try to grade you and point out vulnerabilities,” Johnny Prewitt says. “We can help clients figure out what to do to qualify for better coverage, such as implementing multi-factor authentication and other controls.”
While The Prewitt Group offers cyber protection to every client, many businesses turn it down. “More than one has declined and later called back and said, ‘I got hacked. Is that what you were trying to sell me?’” Andy Prewitt says.
Cyber risk is particularly dangerous because it carries a combination of consequences that can affect a company financially, legally, reputationally and operationally, according to Flowers. “A breach can bring regulatory fines, lawsuits, business interruption, ransom demands and irreversible customer distrust,” he says.
“General liability and property policies typically do not cover these digital exposures, leaving a critical gap that many business owners don’t recognize until it’s too late,” says Flowers.
Uniquely, cyber insurance doesn’t just cover for financial damages. These policies also can provide covered businesses with other services they will need in the case of a cybercrime, such as access to forensic experts, legal teams, breach response coordinators and crisis public relations assistance. These are “support systems that most businesses couldn’t afford or coordinate on their own in the middle of a digital crisis,” Flowers says.
Work With Dedicated Professionals
To determine the right insurance coverage for a specific business — and get the best rates — it’s wise to build an ongoing relationship with a dedicated professional insurance provider. Many business owners assume that getting insurance quotes from multiple insurance agents will guarantee the best pricing, but that’s not correct, according to Flowers.
“Typically, when you go to an agency and they submit your information for pricing to their carriers, that prevents any other agencies from getting pricing from that specific carrier,” Flowers says. “That makes it harder on the agency to place the risk and it will cause carriers to look at the risk unfavorably.”
Just as you would hire only one real estate agent to list your home and represent you to buyers, Flowers recommends choosing one insurance agent to represent you to the insurance carriers to achieve more favorable pricing.
In addition to getting better pricing, business owners also can typically get better service by working with a dedicated insurance agent. The Prewitt Group, for example, prefers to sit down with each client on an annual basis and review their coverage. “You need to review your business and update regularly, because as your business grows, your insurance needs also expand,” Andy Prewitt says.
And by working personally with a knowledgeable insurance professional, business owners can make sure they’re covered appropriately. For example, “a lot of people think a home-based business is covered by homeowner’s insurance, but it’s not,” Johnny Prewitt says. “You have to work with somebody who knows the details to ensure you have the right coverage.”
Nancy Mann Jackson is a Madison-based freelance contributor to Business Alabama.
This article appears in the September 2025 issue of Business Alabama.
