Insurance policies covering commercial business operations for legal liability is called General Liability insurance. The policy covers negligence by the insured business causing bodily injury or property damage to a 3rd party. In the industry, we as agents, sometimes refer to this as “slip and fall” insurance. The insurance companies employ actuaries who can devise a rate for a particular classification according to risk. This classification is extremely important to us so we as agents, can match the policy coverage to the risk and collect premium according to risk, so insurance companies have the money to pay a claim, if one occurs.
As with any business, the more history one has, the better projections of the future can be made. Insurance companies have a great deal of history to base future loss projections of each classification. Therefore, the reasoning for rate changes. But also for clarifications of policy definitions, classifications and endorsements available for increase or decrease of coverage. Correct classification of your business is extremely important for both rating and insurance coverage. Please take time to tell your agent everything your operations include so correct classification my be applied. Talk with your agent or one of ours to be sure your business is properly covered.
Commercial Insurance.Net, LLC Advisor is not an attorney, accountant or certified financial planner and makes no representations or warranties to that effect. Always check with your chosen professional as to statements made in this blog for your particular situation.