Business & Commercial Insurance Information
As a business owner, no matter small or large, you need an individualized insurance solution to protect your business, your employees, and you from a loss, liability or other risks. Your insurance solution could include coverages such as, Commercial Auto, Property, or Umbrella, Cyber Liability, General, Employment Practices and Professional Liability (Errors & Omissions), Worker's Compensation, and Employee Benefits. Depending on the nature of your business, there may be other unique specialty coverages necessary. A good insurance agent will partner with you to learn about your business and its operations and assess potential exposures for risks and offer appropriate insurance solutions for you and your business' protection.
As a business owner, you need the same kinds of insurance coverages for the car you use in your business as you do for a car used for personal travel -- liability, collision and comprehensive, medical payments (known as personal injury protection in some states) and coverage for uninsured/underinsured motorists. In fact, many business people use the same vehicle for both business and pleasure. If the vehicle is owned by the business, make sure the name of the business appears on the policy as the "principal insured" rather than your name. This will avoid possible confusion in the event you need to file a claim or a claim is filed against you.
Whether you need to buy a business auto insurance policy will depend on the kind of driving you do. A good insurance agent will ask you many details about how you use vehicles in your business, who will be driving them and whether employees, if you have them, are likely to be driving their own cars for your business.
While the major coverages are the same, a business auto policy differs from a personal auto policy in many technical respects. Ask your insurance agent to explain all the differences and options.
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Businesses have many physical assets, including buildings, computers, specialized equipment, outdoor signage and inventory. If a fire, storm or thief were to damage or steal these assets, a business may have to go through a recovery process before their doors can open once more.
Without adequate commercial property and loss of business income coverage, approximately a quarter of businesses fail during the first year following a disaster or theft. Such events result in hundreds of billions of dollars in paid claims. Most businesses cannot afford such a substantial loss. Commercial property insurance can assist with repairs, replacements and lost income during a tumultuous time like a natural disaster or theft.
How does commercial property insurance help?
Commercial property insurance helps businesses survive various situations. These situations include the following:
- Repair or replacement: Coverage can extend to assets that are lost, damaged or stolen due to fire, storm, hail, tornado, theft, vandalism or other perils. Damage from flooding and earthquakes are usually excluded (specific coverages for these events can be added or purchased.)
- Lost income: Income loss results from a business’ inability to run as usual following a disaster. This coverage can offer lost income relief, along with the expenses associated with recovery.
- Temporary location: A devastated building may no longer be able to support daily operations. Coverage can extend to funding a temporary location while repairs are being made.
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Unfortunately for every business owner, the chances of getting sued have dramatically increased in the last decade. General Liability insurance can prevent a legal suit from turning into a financial disaster by providing financial protection in case your business is ever sued or held legally responsible for some injury or damage.
General Liability pays losses arising from real or alleged bodily injury, property damage, or personal injury on your business premises or arising from your operations and normally includes the cost of defense.
What can be covered by General Liability Insurance?
- Bodily Injury, including the cost of care, the loss of services, and the restitution for any death that results from injury
- Property Damage coverage for the physical damage to property of others or the loss of use of that property
- Products-Completed Operations provides liability protection (damages and legal expenses up to your policy's limit) if an injury ever resulted from something your company made or service your company provided
- Products Liability is a more specialized product liability insurance that protects your company against lawsuits from product-related injury or accidents
- Contractual Liability extends to any liability you may assume by entering into a variety of contracts
- Other coverage includes: Reasonable Use of Force; Borrowed Equipment; Liquor Liability; Non-Owned Vehicles (such as aircraft and watercraft); Fire, Lightning or Explosion Damage; Water Damage Liability Protection; Legal Defense Costs; Medical Payments; Personal Injury; Advertising Injury; and specialized liability protection for specific business types
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Savvy business owners consider several different commercial insurance policies to protect their businesses. But, what do you do if something happens that results in higher bills than what your current policy covers? Commercial umbrella insurance can come to the rescue under such circumstances.
What are the benefits of commercial umbrella insurance?
Once your claim reaches your policy’s limits, your umbrella insurance helps cover the rest. Think of this policy as a literal umbrella perched above your underlying policies to add an extra layer of protection.
For example, say you have $1 million in coverage from your standard business insurance policies. If you face a legal settlement of $1.5 million, an umbrella policy will cover the additional $500,000.
We live in a litigious society. Lawsuits can cost a business millions. This coverage is a prudent decision to protect you against possible lawsuits. The high costs of a lawsuit can catch a business off-guard. Sufficient limits set for umbrella insurance can keep you from permanently closing your doors.
If you want higher policy limits, umbrella insurance is an affordable way to get them. It is important to know that umbrella insurance will not extend coverage limits on errors and omissions or professional liability policies.
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Professional liability insurance protects individuals and companies from assuming the full cost of defending a lawsuit claiming negligence or Errors and Ommissions of the individual or business. A claim of negligence, error, omission, malpractice or misrepresentation is not covered under a general liability insurance policy, which makes professional liability insurance crucial for those who provide a service or advice for a fee. Depending on the profession, professional liability insurance may take on different forms and names, like malpractice and E&O insurance.
The number of liability lawsuits against professionals has increased in recent years. Many professionals within a variety of industries are at risk of being sued, whether the charges are valid or unfounded. Such lawsuits can mean financial ruin both professionally and personally, including the loss of cars, homes and careers. Professional liability insurance helps with the financial burden of these events.
Who benefits from professional liability insurance?
Any professional who provides a service, expertise or advice to clients for a fee can benefit from coverage against liability lawsuits. Even with quality employees and risk management practices in place, people still make
mistakes. A general liability policy provides coverage for bodily injury, property damage, and personal
injury but may not cover mistakes that could be made. Professional liability insurance will protect your business and its finances if such an event arises.
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The sensitive customer data stored within company servers and in the cloud is vulnerable to attacks from hackers and other cyber criminals. Most people think only large corporations are in danger of cybercrime attacks. But, all businesses that use computers connected to the Internet are at risk.
What are the benefits of cyber liability insurance?
More than one-third of businesses experience a data breach each year. If a similar event happened at your business, would you be able to pay for the resulting damages?
Many cyber liability policies cover a variety of expenses associated with a cyberattack:
- Stolen data retrieval
- Reimbursement of fraudulent charges
- Identity protection services for customers at risk of identity theft
- Damage control for your business’ reputation
- Legal fees associated with the attack
- And other cleanup efforts
A general liability policy often excludes losses incurred because of the Internet. A cyber liability policy can fill in that gap. It may be the difference between closing your business and making a comeback.
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Workers compensation laws were created to ensure that employees who are injured on the job are provided with fixed monetary awards. This eliminates the need for litigation and creates an easier process for the employee. It also helps control the financial risks for employers since many states limit the amount an injured employee can recover from an employer.
Workers Compensation Insurance is designed to help companies pay these benefits. As a protection for employees, most states require that employers carry some form of Workers Compensation Insurance. Workers Compensation Insurance is not health insurance. Workers Compensation is designed specifically for injuries sustained on the job.
In most states, if you have employees, you are required to carry Workers Compensation coverage. Even in non-mandatory states, it can be a very good idea, particularly if you have many employees, or if they are engaged in hazardous activities.
Do I need workers compensation insurance?
Employers have a legal responsibility to their employees to make the workplace safe. However, accidents happen even when every reasonable safety measure has been taken.
To protect employers from lawsuits resulting from workplace accidents and to provide medical care and compensation for lost income to employees hurt in workplace accidents, in almost every state, businesses are required to buy workers compensation insurance. Workers compensation insurance covers workers injured on the job, whether they're hurt on the workplace premises or elsewhere, or in auto accidents while on business. It also covers work-related illnesses.
Workers compensation provides payments to injured workers, without regard to who was at fault in the accident, for time lost from work and for medical and rehabilitation services. It also provides death benefits to surviving spouses and dependents.
Each state has different laws governing the amount and duration of lost income benefits, the provision of medical and rehabilitation services and how the system is administered. For example, in most states there are regulations that cover whether the worker or employer can choose the doctor who treats the injuries and how disputes about benefits are resolved.
Workers compensation insurance must be bought as a separate policy.
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Employment Practices Liability
Claims by employees against their employers is an ever increasing occurrence. Employees who have suffered discrimination, wrongful termination, harassment including sexual harassment or other employment related tort in the work place are seeking damages from their employer. The employer is being held responsible for acts by one employee against another and does not need to be the one who committed the act being claimed. Unfortunately, 80% of the claims are found to be not valid but the business still has to go through defending itself and incurring those expenses whether anything is paid out or not. Employment Practices Liability insurance provides protection to the business should a claim be made against them.
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Comprehensive benefit packages are attractive to job seekers, particularly if benefits extend to their families. Offering a competitive benefit package can give you the edge you need to hire and maintain a quality, dedicated staff.
What types of employee benefits are available?
- Workers’ compensation
- Flexible spending account
Life, accident insurance and disability plans
- Basic and supplemental life
- Business travel
- 401(k) savings plans (often includes company matching)
- Tuition reimbursement program
- Paid holidays
- Vacation days
- Sick and bereavement days
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