Commercial Insurance 101

The success of any business depends on a vision, work ethic, and building a dream; commercial insurance makes sure that all the effort and money you have invested in your business is covered in case a natural or financial disaster strikes. Most businesses need to purchase at least the following four types of insurance:

Property Insurance covers you if the property you use in your business is lost or damaged by common perils such as fire or theft. Property insurance covers not just a building or structure, but also what insurers call business personal property, like furnishings.

Liability Insurance covers you in the event that someone claims your business caused them harm. Your liability insurance pays damages to third parties resulting from bodily injury or property damage for which your business is legally liable, up to the policy limits, as well as legal fees associated with the claim. It also covers any medical bills for any people injured by your business.

Commercial Vehicle Insurance provides coverage for autos owned by the business. This insurance pays any costs to third parties resulting from bodily injury or property damage for which your business or employees are found legally liable, up to the policy limits. Depending on what kind of coverage you buy, the insurance may pay to repair or replace your vehicle because of damage resulting from accidents, theft, flooding, and other events.

Workers Compensation Insurance or workers comp, as this coverage is commonly known, pays for medical care and replaces a portion of lost wages for an employee who is injured in the course of employment, regardless of who was at fault for the injury. It also helps protect the business from a lawsuit from the injured employee.

There is additional coverage to be considered in addition to the basics highlighted above, there are various other policies needed by some businesses, including the following:

Business Catastrophe Liability or Umbrella policies provide coverage over and above your other liability coverage limits. They are designed to protect against unusually high losses. For the typical business, the umbrella policy would provide protection over and above general liability and auto liability policies.

Professional Liability Insurance policies are designed to meet specific needs of individual businesses specialized for liability policies needed by some businesses. They include Errors and Omissions Insurance (E&O)/Professional Liability Insurance, Employment Practices Liability Insurance (EPLI) and Directors and Officers Liability Insurance (D&O).

Terrorism Insurance is offered to owners of commercial property as mandated by the Terrorism Risk Insurance Act, enacted by Congress in 2002. Insurance losses attributed to terrorist acts under these commercial policies are insured by private insurers and reinsured by the federal government.

Navigating the world of commercial insurance and determining your businesses’s needs can be tricky. Be sure that you engage a reliable insurance professional when the time comes to purchase or re-evaluate your commercial insurance policies.

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Business Owner’s Insurance: Keeping It Simple

I am a firm believer in living life by the principle of K.I.S.S.

For the uninitiated, the acronym means “Keep It Simple, Silly.” Well, actually, the second “S” can be any of a lot of things, but we’re keeping this polite.

The idea is, the simpler you make solutions, the less complications you will be met with if those solutions go south.

That being the case, let’s look at business insurance in its simplest forms.

General Liability Insurance:
General liability insurance protects you against damages, injuries, or other risks of liabilities which may be imposed by lawsuits which are sustained at your place of business by a third party.

Workers Compensation Insurance:
Workers Comp insurance is the form of insurance which provides medical benefits and wage replacement to your employees who are injured on the job. Some states also require that businesses provide additional coverage as well. Your licensed insurance professional can help you to determine what coverage is mandatory and what is prudent for you.

Buildings and Property Insurance:
Building insurance is also called commercial building insurance or property and casualty insurance. This coverage which protects financial risks due to damage to or loss of a physical structure that the insured owns or leases. There are some losses which are not automatically covered by this type of insurance. Flood damage, for example, is usually not covered automatically. So if you lived in a flood zone, you would want to work with your licensed insurance professional in order to ensure that your potential flood losses are insured.
Commercial Vehicle Insurance
A commercial auto insurance policy covers business vehicles and their drivers. If your circumstances dictate it, your auto coverage can be combined with property and casualty insurance in your business owner’s policy. It is important to note that it is a fact that many business owners assume a variety of risks by using their cars and assuming a personal auto policy will cover any risk.
There are numerous kinds of additional insurance which are available to business.  Again, it is a fine idea to have a thorough and frank discussion with your licensed business insurance professional in order to make the best decisions about the options which are available for your business.

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The Basics for First Timer Buyers

First time buying business insurance? Here’s the basics:

First, when beginning to look for business insurance, you need to remember it is different than your personal insurance you have now.  You need to take some time and look at the different types of coverage that is available to your business.  These types include liability insurance, property insurance, casualty insurance, and commercial vehicle insurance.

You don’t need to be an expert on business insurance, but you need to understand that property insurance protects the location and contents, while liability protects against a claim against you, your employees, and the business.

Understanding what risks your particular business may be exposed to and what the future may look like as your business grows is very important.  If your business has an industry association, it is a great starting point.  In fact, don’t be afraid to call around and speak to members to see what they have in place and why.  Your state department of insurance can be a great resource to you as well.

Have a business plan and detailed description in place you can review with a commercial insurance agent when you begin to look for the insurance.  The more information you can provide the better coverage you can put into place.  Interviewing and choosing your insurance professional will be much easier and rewarding by doing this exercise.

It is also easier for your insurance professional to understand your business and the vision you have to make sure you cover as much exposure as possible.  Don’t be afraid to ask for commitments from your insurance professional such as 24 hour turn around on phone calls.  Get a standard billing date agreed on and make sure it’s the same every month.

Once you settle on the insurance package, don’t file it and forget it.  It is important to review it often and make you keep adequate coverage as your business grows.  Make your commercial insurance professional a trusted advisor and resource.

Get together at least at least annually and do a complete review either in person or on the phone.  Your commercial insurance isn’t buy once and done, it must grow right along with your business.

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What Is Enough? How Do I Know?

Insurance coverage for my business, what is enough, how do I know?

The question we are often asked is how much coverage is enough.  Every business, retail, specialty, service, bar and grill, financial services, auto mechanic, doctor, lawyer, or any small business needs to insure the business against risk.  Certainly, every business is different and so are the risks with go with them.

Often standard liability policies for a small business are $1 million for any one loss and two million dollars in any one year.  For most of us, that sounds like a lot of money, but is it really when looking at protecting your business.

Consider the ramifications of you or an employee of your company seriously injuring a third party in an accident where fault is determined to be you or your employees’.  The case goes to litigation and jury determines the losses to the third party exceed 4 million dollars based on medical costs, lost income, and pain and suffering.

That $1 million limit doesn’t look so big anymore.  It is often important to ask your licensed professional insurance professional what is realistic for your industry and business.  A commercial umbrella policy is often a cost effective way to increase your liability coverage without breaking the bank.  An umbrella policy will pick up coverage where your existing policy stops.  Check with your commercial broker about recommendations for an umbrella policy.

Property coverage is another area where a discussion with your commercial broker is necessary.  It is always recommended to carry the highest coverage affordable.  Review the coverage with your licensed insurance professional while considering a starting from scratch in the event of a catastrophic loss.  It is always wise to have a separate discussion regarding the commercial vehicle insurance your business is carrying.  Take time with your commercial broker to discuss where your business is today, and also future plans and projects.  Often, a change in your business means you should at least update your commercial broker.

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