Cyber threats are a known risk to businesses these days, but many owners don’t prepare for other lurking dangers by having the right insurance.
The appropriate policy can mitigate damages from issues like employee harassment, loss of income after a disaster and even old-fashioned check fraud.
Chris Hoggle, of Woodall and Hoggle Insurance in Huntsville, has thousands of business clients across the Southeast.
One type of coverage he recommends is employment practices liability. That can cover lawsuits stemming from discrimination, harassment, wrongful termination and similar situations, and can even apply to third parties.
For example, a vendor delivery man is harassing one of your employees. She complains but you don’t do anything about it. She sues you.
Hoggle dealt with one situation where a supervisor sent an employee a meme he thought was funny. She strongly disagreed.
“She walked out that day and told her buddy coworker on the way out that door she was going to sue them,” he says.
The correct policy may even address crime.
“Even old-school stuff like checks getting pulled out of the mail and whitewashed,” Hoggle says, recalling an actual case with a big Alabama bank. “We had a $450,000 claim out of that. It can be covered. Most businesses do not carry adequate coverage for that.
“It’s usually in the $1,000 a year to a few thousand dollars a year range depending on protections you have in place and the size of the business,” he says.
The lack of business income, or business interruption, coverage “can tank a business if you’re not properly covered,” he says.
The best coverage addresses indirect losses while a damaged location is rebuilt. That includes lost net profits, key employee payroll, mortgages, leases — “stuff you’re on the hook for even though you’re not bringing in money anymore.”
Updated building valuation is another overlooked coverage detail, Hoggle notes. Construction costs have climbed, particularly since the pandemic. A building that might have cost $1 million to rebuild in 2018 may be closer to $2 million today, he says.
“If you’ve got a nice brick building and it’s insured at $70 per square foot, well, you know you can’t rebuild that at today’s dollars. You need to at least double it if not triple it,” he says.
Because of the changing risk environment, all business owners need to review policies with their agents regularly, not “just automatically renew year after year,” advises Hoggle.
Jennifer Hill, director of commercial market placement and operations at Harmon Dennis Bradshaw of Montgomery — now part of Higginbotham — agrees that working with your agent is key.
She says businesses also need to do true risk management from the start. Agents can offer risk assessments and pose hypotheticals.
“If their building was to burn down, do they have alternative supply chains? What about their data? What about their employees? Does their insurance cover the payroll so they can keep at least some employees to keep that payroll going?” she asks.
Agents need to hear about anything new with a business, too.
“As soon as an insured becomes aware of any change in operations, of course when they have a new location or a new vehicle, they should reach out to their agent,” she says.
The right coverage limits are so important
“There are certain tools out there that can tell a client,” Hill says. “An agent can run them in the module and tell them what their peers are purchasing.”
Most businesses probably don’t need the highest amount of coverage, our experts agree, but they don’t want the lowest, either.
Of all the ways to make sure coverage is right, Hill most stresses just reading the policy thoroughly.
“It’s legal language, so I know that it can be difficult to get through. I think what I would focus on is the exclusions because it’s in those exclusions a lot of times where a client gets surprised,” says Hill.
“If an agent has glossed over the exclusions and then a claim occurs, it’s not covered because of an exclusion, that’s hard for a client to swallow — understandably.”
Because of occurrences like natural catastrophes, cyber threats and new regulatory pressures, business owners need to consider risk differently than even a few years ago, says Grantland Rice IV, chief administrative officer and president of agency CAC — part of the Baldwin Group.
“Think in terms of a holistic risk management program, not just a policy,” he says. “Insurance is one piece of a larger picture. Organizations need programs built for today’s realities, supported by data-driven insights that lead to smarter decisions.”
Rice says reliability and interpretation of information can make or break a company’s risk and insurance program.
Every organization should have a disaster contingency plan that accounts for real exposures, such as how a fire, flood or cyber event actually impacts operations — and practice or simulate that strategy.
“Loss of business is often the most expensive and most underestimated part of a disaster,” Rice says. “It’s worth doing real exposure analysis like quantifying what an outage costs across different time frames.”
From time to time, businesses should reassess how much loss they can actually absorb, a figure that can change through the years.
“It should be revisited as the business and its risks evolve,” says Rice. “The businesses that recover fastest after a loss are the ones that already understood their exposure in real numbers before anything went wrong.”
The three Alabama insurance professionals agree that cyber liability and crime coverage are becoming more important these days with their business policyholders.
“It’s very rare I sit down with a business, and we bring up cyber and crime, and somebody hasn’t had at least something take place, whether it’s minor or not,” Hoggle says. “Everybody’s experienced something by now. Those are two very important coverages that most businesses are not adequately covered for.”
One chilling reality is that fraudsters may steal data and lie in wait for weeks or months before they strike.
Hill says some insurance agencies offer free training for client employees on dangers like suspicious emails.
“It’s nice to be able to go with an insurer that automatically will include it for no additional charge,” she says.
In the event a claim is denied, the best defense seems to be having experts on your side. Hoggle says a good firm will match their customers with reputable insurers from the start.
When claims are denied
Still, denials happen.
“If you have a claim that gets denied and you don’t agree with it, the first thing to do is get with your agent and have them review it,” he says. “I’ve had a couple of times where we’ve gone in, looked at the coverage wording and not agreed with the adjuster and pushed back and we’ve gotten it covered how we thought it should.”
Higginbotham has staff attorneys that can help in such cases, says Hill.
“They’ll review the client’s policies, and they’ll determine why coverage should have been paid and they’ll push back,” she says.
In short, the right agency, quality coverage and frequent reviews can give business owners peace of mind.
“With insurance, everybody wants to just set it and forget it and pay the cheapest price,” says Hoggle. “But it’s like anything else, you pay for what you get.”
Deborah Storey and Dennis Keim are Huntsville-based freelance contributors to Business Alabama.
This article appears in the September 2026 issue of Business Alabama.
