Business Insurance Basics
General Liability Insurance
Businesses may be held liable for injuries or losses (to the general public) caused by the businesses negligence or fault. General Liability insurance covers your business in the event your business is responsible for causing harm to a person and/or damage to property. It also helps cover the cost of your defense. This could be someone coming in and slipping and falling or could also be the result of a product malfunctioning and causing injury to the end user. General liability Insurance can protect the business against such claims.
Businesses may be held liable for injuries or losses (to the general public) caused by the businesses negligence or fault. General Liability insurance covers your business in the event your business is responsible for causing harm to a person and/or damage to property. It also helps cover the cost of your defense. This could be someone coming in and slipping and falling or could also be the result of a product malfunctioning and causing injury to the end user. General liability Insurance can protect the business against such claims.
Commercial Property Insurance
Commercial property insurance helps businesses pay to repair or replace buildings, structures, and contents that are damaged, destroyed, or lost because of fires, storms, thefts, or other events outlined in the policy.
Commercial property insurance helps businesses pay to repair or replace buildings, structures, and contents that are damaged, destroyed, or lost because of fires, storms, thefts, or other events outlined in the policy.
Business owners can buy commercial property insurance whether they own, rent, or lease a building. If you rent or lease a building, the building owner’s policy probably won’t cover the contents of the building that belong to you. You will need to buy your own policy to insure your on-premises property, including machinery, furniture, and merchandise. The cost of tenant coverage is usually significantly less than building coverage because the policy will only cover contents, not the building itself.
Commercial property policies provide either “replacement cost” coverage, “actual cash value” coverage, or a combination of both. Replacement cost coverage will pay to replace your property with new property of like kind and quality, up to the policy’s dollar limit. An actual cash value policy will pay the replacement cost of the property minus depreciation due to age and normal wear and tear. Although replacement cost coverage is more expensive than actual cash value coverage, it might better ensure that your business fully recovers after a significant loss.
Commercial property policies provide either “replacement cost” coverage, “actual cash value” coverage, or a combination of both. Replacement cost coverage will pay to replace your property with new property of like kind and quality, up to the policy’s dollar limit. An actual cash value policy will pay the replacement cost of the property minus depreciation due to age and normal wear and tear. Although replacement cost coverage is more expensive than actual cash value coverage, it might better ensure that your business fully recovers after a significant loss.
Inland Marine Insurance
Since property coverage may have exclusions for property off premises or in transit. Inland Marine Insurance provides insurance coverage for property that is mobile and moving from location to location. It can be insured at Actual Cash Value or Replacement Cost. This type of coverage is common for contractors that want to ensure their equipment is covered.
Since property coverage may have exclusions for property off premises or in transit. Inland Marine Insurance provides insurance coverage for property that is mobile and moving from location to location. It can be insured at Actual Cash Value or Replacement Cost. This type of coverage is common for contractors that want to ensure their equipment is covered.
Commercial Auto Insurance
If your business owns or uses motor vehicles, or mobile equipment that is required by your state to be insured for minimum financial responsibility, then you need a commercial auto policy. Commercial Auto coverage insures against property damage to vehicles you own or hire, and against liability for bodily injury and property damage caused to others by your use of the insured vehicles. It is very important to know the difference between a Personal Auto policy and Commercial Auto policy. Your Personal Automobile policy usually won't cover vehicles used in the operation of your business.
If your business owns or uses motor vehicles, or mobile equipment that is required by your state to be insured for minimum financial responsibility, then you need a commercial auto policy. Commercial Auto coverage insures against property damage to vehicles you own or hire, and against liability for bodily injury and property damage caused to others by your use of the insured vehicles. It is very important to know the difference between a Personal Auto policy and Commercial Auto policy. Your Personal Automobile policy usually won't cover vehicles used in the operation of your business.
Business Interruption & Business Income
Without income, the business does not survive. In the event of catastrophe, business interruption coverage can provide income or allow your business to be set up in temporary location to earn income. Studies have shown 40% of businesses don't reopen after a disaster, so having this coverage could be a game changer for your business. There is generally a 48-hour waiting period before business income kicks in (it can vary).
Without income, the business does not survive. In the event of catastrophe, business interruption coverage can provide income or allow your business to be set up in temporary location to earn income. Studies have shown 40% of businesses don't reopen after a disaster, so having this coverage could be a game changer for your business. There is generally a 48-hour waiting period before business income kicks in (it can vary).
Umbrella
As the name implies, an umbrella liability policy provides coverage over and above a business’s other liability coverages. It is designed to protect against unusually high losses. It provides protection when the policy limits of one of the underlying policies have been used up. For a typical business, the umbrella policy would provide protection beyond the general liability and auto liability policies. If a company has employment practices liability insurance, directors and officers liability, or other types of liability insurance, the umbrella could provide protection beyond those policy limits as well.
Employment Practices Liability Insurance (EPLI)
If you're a business that has employees, then you probably need insurance that helps protect you from employment related claims resulting from alleged or actual acts of:
Small business owners may think that because they are a small company they are not susceptible to an EPLI claim. Studies have shown that 40% of Employment Practices Liability claims are against businesses with less than 100 employees.
Workers Compensation
Employers often buy workers compensation insurance to pay medical and income benefits to workers who have work-related injuries or illnesses. This type of insurance protects workers by assuring that they are compensated for their injuries, but it also is beneficial to employers. In addition to relieving them of liability for claims, workers compensation gives employers certain legal protections, including immunity from most employee injury lawsuits.
Workers receive benefits based on the type and severity of their injuries. Benefits can include
Benefits are not payable for injuries that
When an employer decides to cancel its workers' compensation coverage, state law requires the employer to file written notice of the termination with the TDI Division of Workers' Compensation. This notice must be sent by certified mail or electronically no later than the 10th day after the date on which the employer notifies the insurance company to terminate coverage. The insurance company must make the cancellation effective no earlier than 30 days after the date of the employer's notice to DWC. Form DWC-005 is used to provide the notice; it can be downloaded or filed electronically from the DWC web site. The employer must also notify its employees within 15 days of notifying the insurance company that coverage has been terminated.
In addition to providing notices at the time of termination, an employer without coverage must: (1) file Notice of No Coverage with DWC annually between Feb. 1 and April 30 of each calendar year; (2) post notice of no coverage in the workplace; (3) notify each newly-hired employee at the time of hire; and (4) report work-related injuries involving absence from work for more than one day (applicable only to employers with five or more employees).
Errors & Omissions (Professional Liability)
Some businesses involve services such as giving advice, making recommendations, designing things, providing physical care or representing the needs of others, which can lead to being sued by customers, clients or patients claiming that the business’s failure to perform a job properly has injured them. Errors and omissions or professional liability insurance covers these situations. The policy will pay any judgment for which the insured is legally liable, up to the policy limit. It also provides legal defense costs, even when there has been no wrongdoing.
Directors & Officers Liability
Directors and officers liability insurance protects directors and officers of corporations or not-for-profit organizations if there is a lawsuit claiming they managed the business or organization without proper regard for the rights of others. The policy will pay any judgment for which the insured is legally liable, up to the policy limit. It also provides for legal defense costs, even where there has been no wrongdoing.
Data Breach
Offered as an optional coverage, data breach coverage provides you with access to professionals who can help you comply with regulatory requirements, provide guidance on how to help prevent a data breach and handle a breach crisis if one occurs. Response expense coverage can help to quickly restore confidence in your business or practice through notification to impacted individuals and can help pay for good faith advertising expenses, for example. In most states, coverage is also available for defense and liability expenses in the event you're sued because of a breach.
> Information on Cyber Insurance
> More on Cyber Insurance
As the name implies, an umbrella liability policy provides coverage over and above a business’s other liability coverages. It is designed to protect against unusually high losses. It provides protection when the policy limits of one of the underlying policies have been used up. For a typical business, the umbrella policy would provide protection beyond the general liability and auto liability policies. If a company has employment practices liability insurance, directors and officers liability, or other types of liability insurance, the umbrella could provide protection beyond those policy limits as well.
Employment Practices Liability Insurance (EPLI)
If you're a business that has employees, then you probably need insurance that helps protect you from employment related claims resulting from alleged or actual acts of:
- Discrimination
- Harassment
- Retaliation
- Violation of the Family Medical Leave Act
- Wrongful discipline
- Wrongful failure to promote
- Wrongful termination
Small business owners may think that because they are a small company they are not susceptible to an EPLI claim. Studies have shown that 40% of Employment Practices Liability claims are against businesses with less than 100 employees.
Workers Compensation
Employers often buy workers compensation insurance to pay medical and income benefits to workers who have work-related injuries or illnesses. This type of insurance protects workers by assuring that they are compensated for their injuries, but it also is beneficial to employers. In addition to relieving them of liability for claims, workers compensation gives employers certain legal protections, including immunity from most employee injury lawsuits.
Workers receive benefits based on the type and severity of their injuries. Benefits can include
- Lifetime medical benefits for necessary treatment of compensable injuries and illnesses
- Disability income benefits for a specified period of time and up to dollar limits set by law
- Limited funeral expenses for workers killed on the job
- Death benefits for surviving dependents of workers killed on the job
Benefits are not payable for injuries that
- Are intentional or self-inflicted
- Result from the employee’s horseplay or voluntary intoxication (either alcohol or drug-induced)
- Arise from voluntary participation in off-duty recreational, social, or sports events
- Result from “acts of God,” unless a person’s job exposes him or her to a greater than ordinary risk of injury from such acts
- Are inflicted by someone else for personal reasons unrelated to employment
When an employer decides to cancel its workers' compensation coverage, state law requires the employer to file written notice of the termination with the TDI Division of Workers' Compensation. This notice must be sent by certified mail or electronically no later than the 10th day after the date on which the employer notifies the insurance company to terminate coverage. The insurance company must make the cancellation effective no earlier than 30 days after the date of the employer's notice to DWC. Form DWC-005 is used to provide the notice; it can be downloaded or filed electronically from the DWC web site. The employer must also notify its employees within 15 days of notifying the insurance company that coverage has been terminated.
In addition to providing notices at the time of termination, an employer without coverage must: (1) file Notice of No Coverage with DWC annually between Feb. 1 and April 30 of each calendar year; (2) post notice of no coverage in the workplace; (3) notify each newly-hired employee at the time of hire; and (4) report work-related injuries involving absence from work for more than one day (applicable only to employers with five or more employees).
Errors & Omissions (Professional Liability)
Some businesses involve services such as giving advice, making recommendations, designing things, providing physical care or representing the needs of others, which can lead to being sued by customers, clients or patients claiming that the business’s failure to perform a job properly has injured them. Errors and omissions or professional liability insurance covers these situations. The policy will pay any judgment for which the insured is legally liable, up to the policy limit. It also provides legal defense costs, even when there has been no wrongdoing.
Directors & Officers Liability
Directors and officers liability insurance protects directors and officers of corporations or not-for-profit organizations if there is a lawsuit claiming they managed the business or organization without proper regard for the rights of others. The policy will pay any judgment for which the insured is legally liable, up to the policy limit. It also provides for legal defense costs, even where there has been no wrongdoing.
Data Breach
Offered as an optional coverage, data breach coverage provides you with access to professionals who can help you comply with regulatory requirements, provide guidance on how to help prevent a data breach and handle a breach crisis if one occurs. Response expense coverage can help to quickly restore confidence in your business or practice through notification to impacted individuals and can help pay for good faith advertising expenses, for example. In most states, coverage is also available for defense and liability expenses in the event you're sued because of a breach.
> Information on Cyber Insurance
> More on Cyber Insurance