|
 I'm
just getting my business started. Do I need insurance
right away?
Yes, because the chance that you
could suffer a loss begins with the first day of
business. You can't get help after the fact. If you
suffer a loss and have no insurance or have improper or
insufficient coverage, your insurance agent can only do
so much to help you. You must be prepared for the risks
that are inherent in any business and the losses,
sometimes it my even lead to catastrophic. Also, many
states and local jurisdictions require that businesses
be insured to begin operating. And if you rent space for
your business, your landlord probably requires that you
be adequately insured as well.
I
don't have any major business assets. Why do I need
insurance?
Every business has some property.
And, when you think about it, your business is your
property. Just like your home and your car, your
business needs to be protected from loss, damage and
liability. In addition, your business is your source of
income, so you need protection from the potential loss
of that income. Generally, there are two types of
insurance - property and liability. Property insurance
covers damage to or loss of the policyholder's property.
And if somebody sued for damages caused by you or your
possessions (other than a vehicle covered by your
insurance policy), the cost of the suit - both defending
it and settling it if necessary - would be covered by
your liability insurance.
Is
insurance coverage different for different businesses?
It can be. Many small
businesses are now insured under package policies that
cover the major property and liability exposures as well
as loss of income. A common package policy used by many
small businesses is called the Business owners Policy
(BOP). Generally, these package policies provide the
small-business owner more complete coverage at a lower
price than separate policies for each type of insurance
needed. Your agent can help you decide which policy or
policies are right for your business. Additional
coverage for property, liability or perils or conditions
otherwise excluded (e.g., flood protection) can be
purchased as endorsements to a standard policy or as a
separate, second policy called a
difference-in-conditions (DIC) policy. Because
businesses vary, it is impossible to have a standard
policy to cover all contingencies. Also, some
businesses, regardless of their size, do not fit the
profile of a standard business owners policy. For
example, restaurants, wholesalers and garages have
special liability needs that are not met in the standard
business owners policy. Your insurance agent can advise
you of the best policy (or policies) to protect you and
your business.
Back to
Top
What
types of property do I need to insure?
Your business may not possess all the
following types of property, but you can use this list
to make sure that you have considered all the property
categories and any insurance coverage that may be
warranted:
- Buildings and other structures (owned or leased)
- Furniture, equipment and supplies
- Inventory
- Money and securities
- Records of accounts receivable
- Improvements and betterments you made to the premises
- Machinery
- Boilers
- Data processing equipment and media (including
computers)
- Valuable papers, books and documents
- Mobile property such as automobiles, trucks and
construction equipment.
- Satellite dishes
- Signs, fences, and other outdoor property not attached
to a building
- Intangible property (good will, trademarks, etc.)
- Leased equipment
To establish the amount of insurance you need on each,
your insurance agent can help you review the types of
property you own and their uses. Some of these items are
covered in the basic policies. For others, coverage can
be added by an endorsement, or rider. And some, like
money and securities, may not be covered by a standard
commercial policy and may require a second, separate
policy.
What
is Boiler and Machinery Insurance?
Even if you do not own a boiler, you
may need this coverage. The term "boiler and machinery
insurance" is gradually being replaced with terms such
as "equipment breakdown" or "mechanical breakdown"
coverage. This insurance provides coverage against the
sudden and accidental breakdown of boilers, machinery or
equipment, including computer systems and
telephones/communication systems. Coverage usually
includes reimbursement for property damage, expediting
expenses (e.g., express transportation charges), and
business interruption losses.
What
is Builders Risk Coverage?
Covers buildings in
the course of construction. Depending on the policy,
this coverage can be for either the building's value at
the time of loss or its full value at the time of
completion.
Back
to Top
Insurance for Loss of Lease Income
or Value?
Covers the loss of
income when rental property is damaged or destroyed and
the loss of value when the owner of the rental property
also used some of its space for business. If the tenant
of the destroyed or damaged building is forced to rent
space elsewhere at a higher cost, this is called loss of
lease value.
What is Inland
Marine Insurance?
Primarily covers property in transit
such as from warehouse to warehouse or warehouse to
retail store, as well as other people's property left on
your business premises, such as clothes left at a dry
cleaning business or an employee's personal effects left
in the company locker room.
What is Actual Cash Value?
The replacement cost of the item subtracting the
depreciation cost. For example, a new desk may cost
$500. If your
7-year-old desk gets damaged in a fire, it might have
depreciated 50 percent. For this cause, your share, you
would have to pay $250 for it.
What is Replacement Coverage?
The cost of replacing an item without
deducting the depreciation. So today's cost for a desk
of a size and construction similar to the 7-year-old one
damaged by fire would determine the amount of
compensation. If it costs $500 today, that would be the
replacement coverage.
What kinds of events does business
insurance cover?
Basic property insurance policies
generally cover losses caused by fire or lightning and
the cost of removing property to protect it from further
damage (e.g., removing inventory or equipment from a
damaged building so it won't be stolen). "Extended
perils," including windstorm, hail, explosion, riot and
civil commotion, and damage caused by aircraft,
automobiles or vandalism, are usually covered in a
standard policy. Other important perils, often not
covered and considered "optional" in almost all standard
policies, include earthquake and flood damage, building
collapse, and glass breakage. Property insurance can be
written as either "named peril" policies or so-called
"all risk" policies. A named peril policy provides
coverage for those perils specifically named in the
policy. An all risk policy covers loss by any perils not
specifically excluded in the policy. The term "all risk"
does not mean that all perils will be covered and, to
avoid confusion, is often replaced with the term
"special form" or "special causes of loss" coverage.
Check with your agent on the perils covered by your
policy. If you wish, additional coverage can be added.
Back to
Top
Everybody seems to be suing everyone
these days. What if someone sues my business?
No business can afford to be
unprepared for a lawsuit. Liability insurance protects
your business assets when the business is sued for
something the business did (or failed to do) that
contributed to injury or property damage to someone
else. Liability coverage extends not only to paying
damages but also to the attorneys' fees and other costs
involved in defending against the lawsuit - whether
valid or not.
The standard business owners policy provides liability
coverage, as does a separate policy known as a
commercial general liability (CGL) insurance policy.
Generally, commercial liability insurance, whether
purchased in a separate policy or as part of a standard
business owners policy, will cover bodily injury,
property damage, personal injury or advertising injury.
The medical expenses of a person or persons (other than
employees) injured at the business or as a direct result
of the operations of the business are also covered.
Usually excluded from both types of liability insurance
policies are suits by customers against a business for
nonperformance of a contract and by employees charging
wrongful termination or racial or gender discrimination
or harassment.
Check with your agent about the best liability
protection covering all types of situations that may
arise in your business.
Will I need to protect my employees in
the event they are injured on the job?
Yes, and in most states there are
legal requirements that one must have and for which you
may be responsible. State laws vary, but most states
require that you carry some form of workers compensation
insurance. This protects the employee and also offers
you the business owner a degree of immunity from lawsuit
by an injured employee.
Note:
All the above information are subject to change without
notices.
Note: If
you have any questions or
comments or would like any additional information with
respect to our services, we will do our best to respond
promptly and professionally. |
