BUSINESS INSURANCE

A businessowners policy (BOP) is a packaged policy composed of various insurance coverages like commercial property insurance, general liability, and business income. It is a policy designed to fit small businesses and usually provides a packaged endorsement coverages that are crucial for protection.
Typically, a BOP is typically composed of three key coverages – commercial property insurance, general liability insurance, and business income.

• Commercial property insurance: protects your company’s physical assets from unfortunate events. Your property can be the building, its contents, exterior features, furniture, documents, and anything that is used in your everyday business operation.
• General liability insurance: Helps cover medical expenses due to bodily injury, damage to other’s property, and lawsuits you and your employees are responsible for.
• Business income: Provides coverage for loss of income caused by covered accident.

Besides above three coverages, many policies offer packaged coverage including equipment breakdown, personal and advertising injury, accounts receivable, employee theft, and many more.

Because each BOP is unique to its business industry as well as its insurance carrier, it is important to take close attention to coverage details and make sure all your needs are satisfied.

A workers compensation policy provides medical expenses, lost wages, rehabilitation, and death benefits to employee who is injured or become ill during the course of work. Most states require the employers to provide workers compensation coverage to their employees, and the rules vary from state to state. In order for the employee to receive benefits, the injury or illness has to be related to their job duties or employment.

Examples:

• An employee injures his back while lifting a box of paper and requires a doctor’s immediate care.
• A roofer fractures his leg while climbing up the ladder to get to the roof.
• A barista spills boiling cup of coffee on herself and gets serious burn on the arm.

The premium of workers compensation insurance is determined based on the employee payroll. Each $100 of the payroll is calculated by the rate designated to the job class code. Therefore, it is possible for one policy to have multiple class codes based on their duties.

Commercial auto insurance is needed to protect the cars, trucks, and vans used in your business. Commercial auto insurance is distinct from personal auto insurance as certain types and usage of vehicles are specifically excluded on the personal auto insurance. Also, those two policies differ in rate as the exposures are unique.

Coverages

• Liability: This coverage pays for costs associated with bodily injuries and property damage suffered by others in an accident for which you are responsible.
• Uninsured Motorist Property Damage: Pays for damage to your vehicle caused by a driver who doesn’t have car insurance.
• Uninsured/Underinsured Bodily Injury: Pays for you medical expenses, lost wages, and other damages when you’re hurt in an accident caused by a driver who has insufficient or no insurance.
• Collision: Covers cost to repair damage to your car when you hit, or are hit by, another vehicle or object, regardless of who’s at fault.
• Comprehensive: Pays to repair damage to your car that’s caused by something other than a collision. Examples include fire, theft, vandalism, hail or flooding.
• Medical Payment: Covers cost of medical care you or your passengers get as the result of an accident, regardless of who’s at fault.

A standard commercial auto insurance does not cover employees who use their personal vehicles for business purposes.
In this case, you need to add special coverage called non-owned auto coverage. Another important coverage to note is hired auto coverage which covers liability loss caused by vehicle you rent.

Commercial general liability insurance protects your business and employees from bodily injury and property damage in which you are responsible for. It also protect you from advertising lawsuits and personal injury caused by slander and libel.

Claims Examples

• Slip and fall injury: A beauty supply store is sued when a customer slips on a wet floor. The customer is seriously injured and is in need of medical treatment. She sues $100,000 of medical costs and other expenses.
• Product liability lawsuit: A group of consumers sues ABC Company, a mobile phone manufacture, when their phone exploded while in usage due to manufacturing defect. They sustained bodily injury due to the explosion and claims $3,000,000 of medical and other expenses.
• Reputation Damage: During an interview for a local magazine, the owner of a famous local restaurant makes negative comments about its competitor. The false rumor is widely spread, and the competitor ultimately loses customers. The competitor sues the restaurant for ruining the reputation.

The cost of general liability insurance vary depending on different aspects of business. First, the type or business determines the basic rate – higher the risk, higher the premium. Other factors include location, years of experience, insurance claim history, and many more.

Even though most states do not require business to carry commercial general liability, it is one of the most effective of way protecting you business and assets.

Whether you ow or lease a building for your business, commercial property insurance is something very important for the protection of your asset. As a part of businessowners policy, the property insurance protects the building and its contents including exterior fixtures like a fence or outdoor sign.

Commercial insurance property protects your physical assets from fire, explosions, burst pipes, theft, vandalism, and other covered peril. Depending on the policy, it will also provide coverage for property of others in which you are in care, custody, and control of.

The cost of property insurance depends on the limit of coverage and value of property. Also, the location, construction, and occupancy play a big role in determining the premium. Location is important because some place is more prone to natural disaster than other. For example, the frequency of storm is more often in Florida than in Texas. Also, the construction of building determines how resistant the building can be to the causes of loss. Occupancy matter because some business is more risky when it comes to theft claims.
Each policy offer different insuring agreement. Also, Policy A may offer $5,000 in money and securities coverage while Policy B offers $10,000 of the same type of coverage. Depending on the type of business you operate, it is important to take close attention to sub-limit of different categories of property coverage.

Commercial Umbrella: Commercial umbrella policy is designed to provide additional coverage to the existing insurance policies. For example, when the cost of lawsuit exceeds the limit of underlying liability insurance policy, the umbrella policy kicks in. There may be multiple underlying policies under one umbrella policy and a single premium, and because of this simplicity, commercial umbrella policies are particularly attractive to many business owners.
In addition, it may also cover additional liability claims not covered by other policies. For example, a commercial umbrella policy can cover claims involving non-owned watercraft and aircraft or advertising liability that are specifically excluded in many liability policies.

Employment Practices Liability Insurance (EPLI): Helps protect from lawsuits arising from wrongful acts during the employment process.
Generally, it covers claims related to wrongful termination, discrimination, sexual harassment, and retaliation. Unless specially customized, EPLI claims are specifically excluded from commercial general liability policies.
On the other hand, common exclusions of EPLI are bodily injury and property damage. Even though EPLI is a stand-alone coverage, it is often sold as part of packaged policies along with other liability coverages.

Cyber Insurance: This type of insurance helps protect businesses from computer, network, and Internet-based risks. Depending on the optional coverages chosen, it can cover both first and third party loss.
Every business that uses the Internet and accepts credit cards are in risk of cyber-related claims. Though it varies on each policy, cyber insurance covers a broad range of incidents including social engineering, funds transfer fraud, ransomware, network interruption, data breach, network security, and media liability.

Hired and Non-Owned Auto Coverage: If you use an automobile in the course of your business operation, you will need coverage from loss exposures that arise when operating a vehicle in the course of your business.
The type of coverage you need depends on vehicle ownership and how the vehicle is primarily used. Hired and Non-Owned Auto coverage is recommended to businesses that may use a vehicle that is not owned by the business. For instance, a business owner may have a need to rent a vehicle for business purpose.
A business may also have a situation where their employees use their own personal vehicle for the business operation.
These types of situations open up liability exposures to the business from 3rd party’s bodily injury and property damage. Physical damage to the vehicle is covered under its own physical damage coverage.
However, liability to 3rd party may not be covered without hired and non-owned auto coverage. Although, a business may have a commercial auto policy in place, you will need to add hired and non-owned auto coverage when you rent a vehicle or allow employees to use personal vehicle for your business purpose. In the event you have a businessowners policy, but have not purchased a commercial auto policy, you may choose to endorse you businessowners policy with the hired and non-owned auto coverage.