Insurance Every Business Owner Should Consider

General Liability Insurance: Every business, even if home-based, needs to have  liability insurance.

The policy provides both defense and damages if you, your employees or your products or services cause or claimed to have caused property damage or bodily injury to a third party.  Corporate structure does not protect your business, only personal assets. In some cases, the corporate structure can be pierced.

Property Insurance:  If you own the building or have business, personal property, including office equipment, computers, inventory or tools you should consider purchasing a policy that will protect you if you have a fire, vandalism, theft, etc. If you lease or rent space, you will still need this protection as most leases don’t cover your losses in the event of damage. You may also want to consider business interruption insurance added to the policy to protect your income if the business is unable to operate.

Worker’s Compensation: This type of insurance provides wage replacement and medical benefits to those who are injured while working. In exchange for these benefits, the employee gives up his rights to sue the employer. As a business owner, it is very important to have worker’s compensation insurance because it protects yourself and your company from legal complications. State laws vary, but most require you to have workers compensation if you have W2 employees.  Penalties for non-compliance can be extremely high.

Professional Liability Insurance: this type of insurance is also known as Errors and Omissions Insurance. The insurance provides defense and damages for failure to or claims of improperly performing professional services.  General liability insurance does not provide this protection, so it is important to understand the difference.   Professional liability insurance is applicable for any professional firm including lawyers, accountants, consultants, notaries, real estate agents, insurance agents, hair salons and tech firms to name a few.

Cyber insurance or Data Breach:  Should a business store sensitive or non-public information about employees or clients on their computers, servers or even in paper files they are responsible for protecting that information.  If a breach occurs either electronically or from a paper file this type policy will provide protection against the loss or claims of damages.

In addition, every business owner should protect their personal assets with homeowner’s or renter’s insurance, personal auto insurance, life insurance, health insurance, and disability insurance. It makes sense to have an umbrella policy in place as well to further protect your assets.

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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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Types Of Insurance Any Business Owner Should Own

There are a few types of insurance any business owner or business should own, and the include (but are not limited to)…

Life Insurance. Life insurance protects loved ones against your death, but it can also be used to benefit your business–or save–your business. If you have life insurance, the insurer pays a certain amount of money to a beneficiary upon your death. You pay a premium in exchange for the payment of benefits to the beneficiary. This type of insurance is very important because it allows for peace of mind both personally and professionally; having life insurance allows you to know that your loved ones or company will not be burdened financially upon your death.

General Liability Insurance. Every business, even if home-based, needs to        have liability insurance.  The policy provides legal defense and settlements or awards of damages if you, your employees or your products or services cause or are alleged to have caused bodily injury or damage to a third party.

Property Insurance.  If you own your building or lease space, or if you store business property at your home including office equipment, computers, inventory or tools, you should consider purchasing a policy that will protect you in case of fire, vandalism, theft, smoke damage etc.  You may also want to consider business interruption/loss of earning insurance as part of the policy to protect your earnings if the business is unable to operate–if income is hindered, you still have to pay your obligations, and these coverages can help you do that.

Commercial Auto Insurance. Commercial auto insurance protects company owned vehicles that carry employees, company products or equipment. With commercial auto insurance you can insure your work cars, SUVs, vans and trucks from damage and collisions.  If you do not have company vehicles, but employees drive their own cars on company business you should have non-owned auto liability to protect the company in case the employee does not have insurance or has inadequate coverage.  Many times the non-owned can be added to a Business Owner’s Policy which combines general liability and property insurance.

Homeowners and Personal Auto Insurance. As your business grows, your personal assets do as well, generally speaking.  Don’t neglect your personal insurance needs; increase your coverage limits as your assets grow.

Umbrella Insurance. You may want some additional coverage, on top of insurance policies you already have. This is where an umbrella policy comes into play. This type of insurance is an extension to an already existing insurance policy and covers beyond the regular policy. This insurance can cover different kinds of claims, including homeowner’s or auto insurance. Generally, it is sold in increments of $1 million and is used only when liability on other policies has been exhausted.  Any business owner should consider this policy to protect their hard earned personal assets.

Nothing can replace speaking with a knowledgeable insurance professional about the types of commercial insurance policies, and determining what your business needs now, and in the future as it grows.

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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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Contract Work and Business Insurance

The Question: I can’t find full time work and have found some contract work, do I need business insurance?

The correct answer to this question is a resounding yes.

A large number Americans have found themselves laid off or cut back to part time in the last several years.  In addition to a regular paycheck, the biggest loss is often medical insurance.  This scaling back of the economy has pushed many of these people to freelance work or consulting.  While this helps in replacing the paycheck, benefits and insurance are a different story.   In addition, they are now facing additional risk to the assets they currently have.

First, any business whether home based or not needs to have a basic insurance package in place.  A business owner’s policy may fit the situation by including property insurance, general liability, and usually some form of business interruption insurance all in one policy.

This type of policy will be less than purchasing each type of insurance coverage separately with individual premiums for each.  In addition, it is imperative if you are doing freelance or consulting work to get professional errors and omissions, or E & O insurance.

Struggling to make ends meets while doing contract and freelance work and trying to manage risk is a difficult but not impossible undertaking.  Allowing your home and family’s assets to be at risk should be unacceptable to you.  Many folks that utilize a home office and/or work out of their homes make the unfortunate assumption that their homeowner’s or renter’s policy will cover any losses.  Those policies don’t cover businesses.  Personal auto policies generally do not cover your auto when being used primarily for business purposes.  In addition, many policies have exclusion provisions for ‘illegal’ acts which could include ‘business being conducted in a residential area’ so it’s important to check your town’s specific ordinances and business permitting.

The next critical piece is getting medical insurance in place.  Getting a group insurance policy in place for your business may be expensive.  During the initial start up, there may be other alternatives to look at when it comes to medical insurance.  First, was COBRA available? Consolidated Omnibus Budget Reconciliation Act (COBRA) health provisions passed in 1986 allows continued group health coverage that otherwise would be terminated.  Health insurance is critical to managing risk.  A devastating medical issue could bring financial ruin to anyone.  If COBRA isn’t available, can you go on a spouse’s group health plan? The Affordable Care Act now offers various plans/exchanges in every state.

By taking on contract work, you have gone into business for yourself, like it or not.  Sit down with a commercial insurance broker and work together to manage the risk now facing you as a new small business.  Other resources are your state department of insurance and your present property and casualty agent.

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Choosing Appropriate Coverage Amounts

Trying to choose the proper insurance and coverage amounts can be overwhelming.  Let’s look at the typical business insurance needed by almost any business as well as some additional insight to other coverage available for store owners. Understanding the language in an insurance policy is important.  Work with a licensed insurance professional along the way to help you understand the specifics of your policies.

Risk management is generally a department of a big company, but even in a small store, the business owner has to assume that role.  Your licensed insurance professional becomes your number one resource in determining the risk you and your business have and help you determine the coverage necessary to reduce that risk.  In addition, the state department of insurance and different retail associations can provide additional information key to your store.

Most stores will find three primary areas of risk which need to be addressed.  The first is property insurance.  Property insurance protects your business property and inventory against loss or damage by accident, theft, or another cause or by another party.  Often, your property insurance may be purchased in conjunction with your liability coverage.

These combined policies are often sold as Business Owners Policies or B.O.P’s.  The second is general liability insurance.  Liability insurance protects the company against claims of injury either bodily or physically.  This would protect you in the event of an accident at your business or in another location where you or your employees are conducting business.

As noted above, general liability protection is offered through a B.O.P.  In some cases, a business may also need professional liability coverage.  Discuss professional liability with your insurance professional.  Medical Malpractice Insurance is an example of professional liability insurance.

Finally, if you have employees, workers compensation is required in most states.  This insurance covers medical and loss wages to an employee injured conducting company business.  It also protects the business from being sued by the employee.

In addition to the three primary insurance needs, there are specialized policies and coverage options.  Plate glass and signage is one example.  Loss of use and mechanical breakdown coverage are others.  Crime insurance and having a commercial umbrella policy are other types.

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Work with you licensed insurance professional to assess the risk and develop a comprehensive insurance package that fits your specific needs.  Remember, your insurance agent and the companies represented are tremendous resources available for you.

Do Different Kinds of Businesses Need Different Business Insurances?

You may have wondered whether the insurance an interior designer needs is the same as architect’s insurance, or if a doctor’s insurance needs are the same the same as a veterinarian’s.

It is essential for every business to have at least one liability policy, because a liability policy will cover injuries caused to a third party.

Depending on the business, the size, the assets, and corporate structure will determine the types of liability policy for that business.

A physician will carry malpractice insurance like an interior decorator or an architect, though the limits may well be different. The architect and interior decorator may carry errors and omissions insurance while the doctor office may not.  
Each business should carry a property and casualty policy to insure for losses against real or personal property. It makes sense to look at a business owner’s policy.

In every situation, a business owner, whether a medical professional, an an architect, or a janitorial service, should examine everything that is of value and put together your insurance quotes based on that information.

Naturally, you will want to consult a licensed insurance professional, and you would probably do well to seek input and guidance from your accountant, banker, trade association, and anyone else who has an understanding of your industry.

Builders Risk Insurance

Many contractors carry the property insurance for the home or commercial building being constructed.  The policies purchased are called “builders risk”.  Previously these policies covered all key risks to be expected in the course of completing construction of the building.  However, due to the mortgage crisis and economy, we have seen many risk change on both sides. 


A builders risk policy does not include theft, vandalism or have a vacancy clause.  But due to lending practices, contractors often found they could not obtain funding to complete a project.  Therefore a project may sit idle for months, and that opens the property to the exposures of theft and vandalism.  Also, insurers needed to determine if the property was “vacant” for coverage under other perils.  This is beginning to present many problems unanticipated for both the contractor and insurance company.  I believe insurance companies will be forced into addressing these issues in the near future.  Please contact your agent or one of ours to talk about when coverage ceases on your builders risk policy.

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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.

What To Expect After A Catastrophic Event.



What would you expect if your business burned to the ground?  Confirm all employees, guests, clients and management are ok.  Then what?  Call your agent, report the loss and let us go to work for you.  We are going to help with assessments.  Are neighboring businesses going to be impacted?  We are going to pull your management team together and provide a plan of action.  That plan of action needs to include communication with employees, media, vendors, and security.  We will be able to help with insurance coverage provided by your policy.  We will be able to help explain some of the additional coverage which the insurance adjuster is providing and breaking those down to layman’s terms and explaining how those affect your operations.  Understanding and working with your agent will help enable your business get back into operation in the soonest possible time frame.  After all, insurance is designed for catastrophic events and to put your business back into the financial position before the loss occurred.  Your commercial insurance agent should be one of your most trusted business advisors before the loss and not after one.  Call one of ours.  We will be happy to talk with needs specifically for your business operations.

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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.



What Type of Business Insurance Do I Need?

Most business owners are familiar with the common types of commercial insurance, coverages like General Liability, Workers Compensation, and Property Insurance, but you might find it helpful to familiarize yourself with some of the other types, just in case they fall into the category you need.

General Liability Insurance

General Liability insurance covers damages from injuries to a third party.  Click on the link to get a quick, easy general liability insurance quote on our home page.

Property Insurance

Property insurance cover losses to real or personal property within the limits of the policy coverage, for example, damage from a fire to an office.

Glass Insurance

Glass insurance normally covers plate glass storefronts and broken store windows, which may be excluded in a more general policy.

Ordinance or Law Insurance

This type of insurance covers losses when your building has been shut down by law officials, as a result of needing to be upgraded or replaced to meet current code.  Such loss is typically 50% or more.  It is important to determine the age of your building and what current codes and law is (or could be) in your location.

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Speaking with an insurance specialist who can help you determine the best business insurance plan for your company is vital. Call 1-877-907-5267 to get a quick, free quote for business insurance, or click’Get a Quote’ above to get in contact with us.