Business Insurance: What You Need to Know

Every business should have liability coverage to protect it from the unexpected. Small to medium sized businesses can purchase a Business Owners Policy (BOP) which encompasses basic coverage, simply stated: property insurance (if your property is damaged), liability insurance (if someone gets hurt on your property), and income insurance (if your business is prevented from earning). A BOP may not be the most appropriate or comprehensive coverage for all businesses. Industry specific exposure or the need for higher limits may require additional endorsements or a specialized plan. For instance, doctors need Medical Malpractice Coverage and dry cleaners needs Bailee Coverage.

What Business Insurance is Right for You?

Determining the amount and type of coverage that you need requires a review of your business functions and exposures. You may need one type or a combination to provide you with the comprehensive coverage tailored to you.

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Other Business Insurance Options

Commercial General Liability (CGL) protects business owners during litigation resulting from injury, damage or death occurring in conjunction with business activities. CGL will help pay for incidents such as a person slipping and breaking a leg on your property or your delivery truck accidentally tearing up someone’s new sod. This coverage should not be confused with product liability or inland marine coverage as it will not cover liability related to work you are doing or products you produce. If a painter gets sued because paint starts chipping off the walls or if a dry cleaner gets sued for burning a hole through a wedding dress, these claims would not be covered by this kind of policy.

Business Property Insurance is protection for the physical assets of a company, like the building, signage and personal property of the business (documents, furniture, equipment, etc.). You may choose to have Open Perils Coverage or Named Perils Coverage. With open perils coverage, you will have coverage for all incidents except those which are specifically excluded within the terms of your policy. With named perils coverage, you will have coverage for only incidents which are listed within the terms of your policy. Another choice you will have to make is if items that need to be replaced due to theft or irreparable damage will be replaced based on Replacement Cost (RC) or Actual Cash Value (ACV). RC and ACV are insurance industry terms for different ways to determine valuation. Replacement cost means that the insurance company will pay to replace the stolen or destroyed item up to the limits of the policy. Actual cash value means that the insurance company will pay to replace the items after depreciation has been deducted (and up to the limits of the policy).

Commercial Automobile and Fleet offers similar options to those that you would choose from for your personal vehicle plus additional depending on how much you depend on your vehicle or fleet and what additional exposures they have. This insurance covers not just vehicles that are owned by the business but also vehicles that are rented, leased or owned by employees while they are being used for company functions. Some options are: comprehensive physical damage, medical payments, bodily injury liability, personal damage liability, collision, uninsured or underinsured coverage, accessory damage or theft, and rental and towing coverage.

Worker’s Compensation and Employer Liability Coverage is necessary even in presumably safe industries. Injury or death can occur obvious occur when exposed to chemicals or when working with dangerous equipment, but accidents can even happen in an office environment if someone trips on a snag in the rug or throws out his/her back carrying a box of files. As an employer, you are required to ensure a safe environment for your staff and assistance to them should an accident occur on the job. Worker’s Comp usually includes some amount of wage replacement and medical benefits to employees injured on the job.

Professional Liability is a type of insurance that protects professionals, directors and officers from financial/professional injury that occurred from their advice or lack of advice and/or their business practices. Professional liability does not cover bodily injury or property damage and does not necessarily guarantee legal representation. PL can include Errors & Omission (E&O) coverage, Directors and Officers insurance (D&O), Employers Practices Liability (EPLI) and Employment Benefits. Errors & omissions coverage is for professionals like attorneys, architects or consultants. D&O is for directors and officers of educational institutions as well as not-for-profit and for-profit organizations. EPLI is for the business practices of all the aforementioned professionals in regards to such things as wrongful termination, discrimination, sexual harassment, etc.

Inland Marine & Overseas Cargo includes coverage for materials in the field or in transit. Inland marine is specifically for movable assets in transit and ocean marine is specifically for property on international shipping vessels. The name ‘inland marine’ might be deceiving as it applies to many industries in which assets are transported, not just the marine world and not just transportation by water. For instance, a mobile vet or groomer, a mobile medical clinic or an orchestra transporting instruments in between concerts would use the coverage for their equipment as it is transported between jobs. Overseas cargo covers not just the cargo, but freight revenue and legal liability for negligence of shipper.

Products Liability includes coverage for legal fees stemming from issues with the products you supply or sell. This would include situations like a flaw in the manufacturing or design or inaccurate warnings or instructions. If injury or death occurs and it can be proven that negligence was involved, products liability coverage will be your best defense against lawsuits.

Call us for a free estimate (203) 769-9565

Whatever type or amount of business insurance you need, we can provide insurance experts to help guide you through the process so you can choose the appropriate policy for your needs and financial situation. Call us for a free estimate.