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Commercial Insurance BasicsProperty Insurance
Building coverage – covers your building(s) or the building(s) you lease. The optimal coverage for this is “Special Form”; That is your building is covered for damage by “all risks” with limited exclusions such as EARTHQUAKE, FLOOD, NUCLEAR HAZARDS, and more (please refer to each policy for specifics) – There are generally three ways to value your property: Replacement Cost, Actual Cash Value (ACV), and Stated Amount. Replacement Cost will provide you the broadest coverage – It provides for repair or replacement up to the replacement cost OR policy limits whichever is LOWER; ACV is the actual DEPRECIATED value; and stated amount is an amount you and the insurance company agree on regardless of how much it costs to replace. Some policies will allow for replacement cost + a percentage to allow for costs higher than the declarations state.
Contents – This covers your business property that is NOT a vehicle or building – generally, furniture, fixtures, inventory, company owned tools etc. There are many coverage options here, but, REPLACEMENT COST is generally best – NOTE – there are always exclusions, many time limits on types of property and restrictions on WHERE it’s covered
Ordinance or Law - often overlooked – but critical to rebuild if you have a loss. It provides coverage for loss caused by enforcement of ordinances or laws regulating construction and repair of damaged buildings – ie building codes have changed since your building was built. Older structures that are damaged may need upgraded electrical; heating, ventilating, and air-conditioning (HVAC); and plumbing units based on city codes – Americans with Disabilities Act improvements etc. Many cities have a building ordinance(s) requiring that a building that has been damaged to a specified extent (typically 50 percent) must be demolished and rebuilt in accordance with current building codes rather than simply repaired. Un-endorsed, standard commercial property insurance forms do not cover the loss of the undamaged portion of the building, the cost of demolishing that undamaged portion of the building, or the increased cost of rebuilding the entire structure in accordance with current building codes. However, coverage is available by endorsement – and we always recommend it.
Business Income / Extra Expense - If you have a covered property loss and your business is forced to close temporarily, business income coverage can help you: replace lost net income, pay for continuing expenses, such as mortgage / lease, advertising, taxes and payroll, pay for relocation expenses and advertising fees if you set up operations at a temporary site. Business income insurance works with your property policy it provides coverage for events beyond your control such as fire, wind, hail, vandalism or damage from vehicles or aircraft that may interrupt your business. Flood, earthquake or glass breakage are typically excluded.
Options and endorsements - In addition to basic coverage, which is essentially earnings insurance or reimbursement insurance, there are different options and endorsements to provide additional coverage.
Extended Business Income– Critical – this coverage starts AFTER you reopen – since you may have lost customers and cash flow after the loss – this covers the difference between what you ARE earning and what you would have earned without the loss for up to one year after you re-open
Extra expense coverage - Extra expense insurance covers expenses above and beyond normal operating costs if your company is temporarily shut down. Depending on your type of business, extra expense insurance by itself can sometimes provide sufficient coverage.
Dependent property - Dependent property coverage provides coverage if: your suppliers are unable to produce goods or services on which your business depends Your customers are unable to receive your company’s goods or services. Companies that manufacture products for direct delivery to your customers can no longer fulfill orders A company in your immediate vicinity which is responsible for attracting customers to you (known as a leader location) goes out of business or can no longer attract business. OPTIONAL – Recommended.
Utility services - Utility provides coverage if there is disruption of utilities, such as electric, gas or water provided by public or private utility companies that prevents your business from operating, resulting in a loss of income. - OPTIONAL – Recommended.
Civil authority - Coverage provides income if your business is forced to close – or access to your business is prevented – due to an act of civil authority, such as an evacuation or disaster. – OPTIONAL – Recommended
Commercial Property Notes: Beware of Co-insurance penalties, limits on goods off premises, deductibles being per coverage and not per occurrence – contact us if you have questions
Liability Insurance – Covers you for what you legally owe and legal expenses for bodily injury and property damage caused by you, your employees and your products. With the day-to-day uncertainties of business, liability insurance is something you cannot do without. Accidents happen – on site, off site, with employees and with customers – no matter how well you plan. It is a critical part of any insurance portfolio, regardless of your industry. Liability insurance can help cover medical expenses, attorney fees and damages you are legally responsible for. We understand that you need complete business protection, not one-size-fits-all coverage.
You can customize a basic policy with additional commercial liability endorsements, that meet the specific needs of your business.
Hired and Non-owned Auto Liability Insurance - Provides auto liability coverage for short-term auto rental or for employees using their personal auto during the course of business.
Umbrella Policies - Extends coverage over and above your other liability coverage. Designed to protect against unusually high losses when the policy limits of one of the underlying policies have been used up.
Product and Completed Operations Liability Insurance - Protection for bodily injury and property damage that occurs away from your premises that are caused by your products or work.
Employment-Related Practices Liability Insurance - Covers wrongful termination, wrongful refusal to employ, invasion of privacy or defamation claims made by your employee against you.
Directors and Officers Liability Insurance - Coverage where a poor decision was made by a company’s board of directors or officers resulting in a claim for damage. Coverage can be provided for condominium associations, golf courses and churches.
Liquor Liability Insurance - Protects you against loss for injuries or damage caused by reason of you selling, serving or providing any alcoholic beverage during the course of your business.
Fire Legal Liability - Coverage for fire damage to premises you rent or occupy with the landlord’s permission. You must have been negligent in causing the fire for this coverage to respond.
Crime coverages include: Theft of Money & Securities – both inside and outside your location, Employee Dishonesty – embezzlement of funds or property, Fraud and Counterfeit, Computer theft. These generally are additional coverages that need to be endorsed onto a policy
Commercial Auto Insurance
Commercial Auto – Similar to a personal auto policy – but has some key differences.
Liability – covers damage you cause to a person, place, thing or even mental anguish – limits should be high – can be set to cover specific vehicles (symbol 7), all vehicles you own (Symbol 2), or ANY vehicle (Symbol 1)
Uninsured Motorist – Often minimized to cut costs – very risky – covers you, your employees and anyone in your vehicle (family member, customer etc.) if you are hit by someone with NO INSURANCE or not enough insurance to cover the claim – always make this match your liability limits if possible.
Comprehensive - Damage to your vehicle other than collision: Fire, Theft, Vandalism, Wind. Hail Etc
Collision – Damage to your vehicle from colliding with another vehicle or object, or a roll-over
Towing, Rental Reimbursement, Hired & Non Owned, Glass coverage, and in some cases, Loss of Use can be added as well