COMMERCIAL INSURANCE SERVICES



Businesses need a wide variety of insurance coverages. Almost every business requires property insurance to protect its assets, including buildings, equipment, and inventory from fire and other perils. Liability insurance protects your business from the liability costs of accidents that occur on your premises or as a result of your operations or products. Every business that hires workers needs workers’ compensation insurance. You may also need auto insurance, business income, and other coverages. Our firm provides a wide selection of commercial insurance coverages, tailored to the specific needs of your business.

  • Commercial auto insurance
If you have company-owned vehicles, you need a commercial automobile policy. A commercial auto policy provides the same kind of coverages as a personal auto policy, protecting the business against liability for injury or property damaged caused by vehicles you own or have responsibility for and for any physical damage they may cause.

Like a personal auto policy, commercial auto policies also include uninsured and underinsurance motorists coverage and medical payments coverage. You will probably also want to purchase physical damage coverage to protect your vehicles from damage or theft.

If you own a significant number of vehicles, you may qualify for reduced “fleet” rates. Sometimes small businesses rely on their personal auto insurance policies to cover the business use of their cars. While this can be an option, it’s something you need to arrange through your insurance company, since many personal policies exclude business use.Business owners should also be aware that they might become liable when employees use their own cars for business purposes. You can cover this under your commercial auto policy. If you don’t have a commercial auto policy, you should be able to add this important coverage to your general liability or business owners policy (BOP) with a non-owned and hired-auto endorsement.

  • Commercial liability insurance

Your organization can become liable to third parties for injury or property damage in a variety of ways. Commercial liability coverage is often included in a package policy along with property insurance, such as a Business Owners Policy or BOP. It may also be issued as a stand-alone policy called a Commercial General Liability (CGL) policy. Commercial general liability coverage addresses these principal sources of claims:

  • Premises
  • Products and completed operations
  • Personal injury (such as libel, slander, false arrest, invasion of privacy) and advertising liability (such as advertising that libels, slanders, etc. and violations of privacy, misappropriation of ideas, copyright infringement, etc.)
  • Fire damage liability (for damage to leased or rented premises)

Many commercial liability policies offer a number of additional features, such as:

  • Automatic additional insured, which provides automatic coverage when required by a contract, agreement or permit.
  • Medical payments, paid to injured third parties where goodwill, not fault, is the determining factor, usually with a low sub-limit such as $5000.
  • Employment practices liability, for claims, including legal defense costs, brought by employees or job applicants, usually with a low sub-limit.The cost basis of general liability insurance, whether payroll, sales, square footage, or other measure, depends on the type of business involved. Policies can be claims-made (which provide coverage only while the policy is in effect, unless modified) or occurrence (where the policy in effect, when the accident occurred, is intended to provide coverage).
  • Commercial property insurance
Commercial property policies cover loss or loss of use of any type of property, particularly buildings, equipment, and contents. Commercial property policies typically include coverage for business income or loss of use. You can cover special types of property, such as valuable papers, computers and electronic media, money and securities, agricultural equipment, livestock, works of art and more, under the same commercial property policy that covers your building and contents, or in separate policies, depending on the situation.

Fire is usually the most costly peril to insure, though windstorm damage rates can be in high in certain geographical areas. Policies may cover named perils only (including fire and windstorm and theft) or “all risks.” “All risk” policies cover all perils except those specifically excluded, such as earthquake and flood. You can cover these perils separately, or, for large commercial risks and property schedules, in a Difference in Conditions (DIC) policy.If you have a large portfolio of properties, coverage may be written on a blanket basis, providing a single limit for all properties. This has the advantage of minimizing any coinsurance problems, as well as simplifying administration and sometimes lowering costs, depending on the probable maximum loss you and the insurer agree upon for the blanket limit.
  • Business owner's package
The business owner package policy—or BOP—provides many, though not all, of the insurance coverages needed by many small or medium-sized businesses. Sometimes referred to as a homeowners policy for a business, BOPs vary by insurer, but standard features of the BOP or “package” policies include:

  • property coverage for buildings, equipment and contents
  • liability for third-party claims brought against the business which occur on the premises or from products or operations
  • crime insurance for loss of money from burglaries, robberies and destruction; and coverage to protect from employee dishonesty, such as embezzlement and theft
  • vehicle coverage for rented or borrowed vehicles
  • business income protection, which provides reimbursement for up to one year of lost income if due to damage from a covered peril, as well as extra expense coverage to pay for necessities required to expedite restoring the business.By combining all these coverages from separate policies into one policy, you can save money and might avoid coverage gaps. Other advantages of the BOP are its flexibility; expanding to meet the needs of a growing, changing business; and the simplicity of having one policy instead of several. Notable coverages not included in BOPs are workers’ compensation, professional liability, equipment breakdown, and business auto coverages.
  • Business income coverage
Often the greatest loss to a business damaged by fire or another insured peril is the loss of income due to inability to continue operations. Several forms of business income insurance exist to protect against these losses. For example, a BOP policy typically includes earnings insurance, which compensates the business for the net loss resulting from interrupted operations.
BOPs often include another type of coverage, extra expense, which provides funding for the business to make the necessary arrangements to continue operations with little or no interruption, including the costs of temporarily relocating and related advertising expenses.

Some examples where a business could use extra expense coverage include: renting another location while the damaged premises are repaired, expediting delivery of new merchandise via air freight to replace damaged contents, or recreating documents essential to processing orders.

Some business income coverages can also cover lost income while a business regains its market share or cover income lost due to the shutdown of a suppler or even the loss of an anchor tenant in a shopping center. Additional coverage are available for shutdown due to the disruption of a public utility and by order of a civil authority. Call our office for an analysis of your particular business income needs.

  • Workers' compensation
State workers’ compensation laws require most employers to compensate employees for illnesses and injuries incurred on the job. Workers’ compensation insurance provides injured workers or their families with compensation for lost wages and pays survivor benefits and medical expenses, and funds rehabilitation programs.Unlike other insurance policies, the main coverage section of a workers’ compensation policy, Part One, doesn’t have a dollar limit. That’s because the insurance company writing your coverage agrees to pay whatever the workers’ compensation regulations of your state stipulate your liability is, in regards to injuries to your employees.

Most workers’ compensation policies, however, have a Part Two, called employer’s liability that protects employers from lawsuits that employees may be entitled to bring against their employers under special, though mostly rare, circumstances. This coverage is usually limited to $1 million, but most umbrella policies can raise this limit.If you operate in more than one state, your employees will be subject to the workers’ compensation laws of the state they work in and you will need to purchase coverage accordingly. Even if you do not have operations in other states, but your employees occasionally travel outside your state, you will need an endorsement to your policy, sometimes called an “all states endorsement,” to cover those situations where an employee is injured and may claim benefits under the jurisdiction of a different state.

  • Directors & Officers Liability Insurance
Think of it as professional liability insurance for directors and officers of a corporation. Like anyone, directors and officers can make mistakes of judgment, but when they make mistakes based on negligence, recklessness, or bad faith, they may be held liable for their acts or omissions.

Directors & officers policies typically have two parts. Part A provides direct reimbursement for third-party claims brought against directors and officers. Part B reimburses the corporation if it is required to indemnify directors or officers according to state law, its corporate charter, or by-laws. These policies are claims-made, meaning they only provide coverage while they are in effect, unless otherwise modified, as when they include a retroactive date for claims occurring before the inception date.
  • Earthquake Insurance
Like flood insurance, earthquake coverage can be expensive if you need it. Commercial insurers tend to price it more dearly just after an earthquake. In California, which is thought to have the highest probable risk of earthquake loss, the state-run California Earthquake Authority can provide insurance to homeowners, but does not underwrite earthquake insurance for businesses. Earthquake policies have high deductibles. Difference in Conditions policies can be written to include earthquake coverage.
  • Flood insurance
Because the risk of flood is so great in the areas where flood insurance is actually needed, insurers are reluctant to provide it. Most flood insurance in the U.S. is provided by the National Flood Insurance Program, and the insurance companies that provide it do so through this program. For large risks, a DIC may be negotiated to cover flood.
  • Employee Dishonesty Insurance
If you have employees who handle money or securities or are in a position to compromise the value of your assets through a dishonest act, you need this insurance. Most package policies exclude or include only nominal coverage for employee dishonesty, so you may want to buy a separate fidelity or crime policy.

  • Employment Practices Liability Insurance
Often issued as a separate policy, but also found as an endorsement to a liability or D&O policy, this liability insurance protects employers against charges of discrimination, wrongful discharge, sexual harassment, hostile work environment, and similar work-related acts.

The policy covers the employer, its employees acting in an official capacity, and its directors and officers.

  • Equipment Breakdown Insurance
Equipment breakdown insurance can cover an extensive list of equipment, including piping, turbines, engines, pumps, compressors, electrical panels, generators, and more. This insurance covers failure of many kinds of equipment, including boilers, machinery and electrical equipment.

When you buy equipment breakdown insurance, you buy more than coverage—you buy the insurer’s loss prevention expertise. Your insurer’s technicians will inspect your boilers or other equipment to help you prevent accidents from occurring in the first place. The insurance will cover the relevant equipment as well as damage to your other property and damage or injury to third parties. Policies also include extra expense coverage to expedite repairs, minimizing down time. You can also buy spoilage coverage to protect you from loss due to refrigeration system breakdown.
  • Liquor Liability Insurance
General liability policies include liquor liability coverage when the insured is not in the business of selling or providing alcoholic beverages and cover host or incidental liability, such as office parties or events the firm may sponsor. A bar, tavern, restaurant, store or other entity engaged in trade relating to alcoholic beverages needs to specially include coverage in its general liability program.
  • Professional Liability & malpractice Insurance
Also known as errors and omissions insurance, this insurance is available for a variety of occupations. It covers negligence or wrongdoing of the professional, including failure to exercise the care, knowledge, or skill appropriate for the circumstances. Most professional liability policies are claims-made, meaning the policy must…

be in force to afford coverage (as opposed to occurrence policies that trigger depending on when the service was rendered), though amendments may be purchased to extend dates when claims can be brought. Some of the professional liability formats available include:
  • Architects and engineers
  • Accountants
  • Adjusters
  • Beauticians and cosmetologists
  • Bookkeepers
  • Broadcasters
  • Computer programmers
  • Directors and Officers
  • Educators
  • Surveyors
  • Police or Law Enforcement
  • Publishers
  • Surety and Fidelity Bonds
Fidelity bonds are, like surety bonds, contracts between three parties (in this instance: the insurer, the employee, and the employer) and they provide protection against employee dishonesty (we describe that coverage above).
A surety bond is a promise by the insurer (or indemnitor) to pay an indemnitee should the principal (or insured) default on the obligation. Some of the bonds we provide are:

  • Contract payment and performance bonds
  • License and permit bonds
  • ERISA bonds
  • Fidelity or dishonesty bonds on employees
  • Court bonds, including fiduciary and judicial bonds
  • Public official bonds, including notary, clerks, and judges
  • Tax bonds
  • Commercial umbrella insurance 
Lawsuits today can mean big money—more than the limits found in a typical insurance policy. Most package policies or even primary liability policies provide liability limits of $1 or $2 million or less. That’s why businesses also need umbrella insurance, which is also called excess liability. These policies provide additional limits, layering $1-5 million or more on top of your primary liability, or “underlying” policies, such as package, commercial automobile liability, workers compensation, and most other primary liability policies.

But they also provide coverage for gaps in liability protection not necessarily covered in primary liability policies.
The additional coverages provided by umbrella policies may include advertising liability such as wrongful use of a trademark name, liability from watercraft used for business, and injuries to employees in tort not covered by workers’ compensation. A self-insured retention or SIR, which is like a deductible but applicable to defense costs as well as damages, applies to claims from these kinds of additional coverages.

Umbrella policies are relatively inexpensive compared to the underlying policies they supplement and they provide excellent “sleep” insurance. Remember that an umbrella policy can never be a substitute for underlying liability policies and in fact will not be valid in the absence of the underlying policies.

   


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