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.
Coverages most businesses need:
Business Owners Insurance Package – BOP
The business owner package policy—or BOP—provides many, though not all, of the insurance coverages needed by many small- or medium-sized businesses. They vary by insurer, but standard features of the BOP or “package” policies include property coverage for buildings, equipment and contents; liability for premises and operations; and
business income protection. By combining all these coverages in separate policies in one policy, you can save money and might avoid coverage gaps. Notable coverages not included in BOPs are workers’ compensation, professional liability and business auto coverages.
Business Income Insurance
Often the greatest loss to a business damaged by fire or another 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. 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. Call our office for an analysis of your particular business income needs.
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. In addition, you will probably 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 might be able to add this important coverage to your general liability policy 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 policies address these principal sources of claims:
- 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)
Liability policies usually include a small sublimit, which covers medical payments paid to injured third parties where goodwill, not fault, is the determining factor.
The cost 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 to 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 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.
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. These policies provide
additional limits, layering $1-5 million or more on top of your primary liability, or “underlying” policies. In addition, umbrella policies often provide additional coverages not found in the underlying polices, such as libel and slander and other coverages.
Workers’ Compensation Insurance
State workers’ compensation laws require most employers to compensate employees for injuries, illnesses and injuries incurred on the job. Workers’ compensation insurance compensates injured workers or their families for lost wages and survivor benefits, pays medical expenses and
funds rehabilitation programs. Many workers’ compensation policies have a second part, 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.
Coverages your business may need:
Whether you are an artisan contractor, such as a carpenter, plumber or electrician, or a general contractor, you have a wide variety of insurance needs. Some of the coverages you may need include:
- Builder’s risk or course of construction
- Commercial auto
- Contractor license and permit bonds
- Design professional liability
- Equipment floaters
- General liability, including broad form coverages
- Performance and other surety bonds
- Umbrella liability
- Worker’s compensation
- XCU (Explosion, collapse, underground) coverage
All contractors need general liability insurance. As a contractor, one of the things you’ll want to do is have the “care custody or control” and the “injury to work performed” exclusions removed from your general policy. Contractors are one of our specialties. Let us design a program that fits your needs.
Difference in Conditions Insurance – DIC
This is a property policy usually written “over” or to supplement a named perils commercial property policy, so it excludes coverage for fire, windstorm, etc. Most importantly, it provides “all risk coverage,” often including earthquake and flood.
DICs are written for a blank limit, without a coinsurance clause and usually for large property risks.
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.
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.
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.
Flood Insurance - Commercial
Kidnap and Ransom
If your firm has foreign locations or employees who travel on business internationally, you, your employees and their families have an exposure to ransom and extortion. These policies can pay the ransom and extortion amounts and related expenses, such as independent negotiators and travel and accommodation. Coverage may also apply to legal liability the firm may incur because it was negligent in hostage retrieval.
Click here for a kidnap & ransom insurance quote
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.
Like other professional liability coverages, this covers negligence or wrongdoing, in this case by a medical professional, including failure to exercise the care, knowledge or skill appropriate for the circumstances. Most policies are claims-made, covering professionals only during the term of the policy. Insureds can often buy “tail” and “nose” coverage to make retroactive the effective date of coverage and to extend the deadline for claim-filing beyond the policy expiration date, respectively.
Professional Liability 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
- Beauticians and cosmetologists
- Computer programmers
- Directors and officers
- Police or law enforcement
Special Event Insurance
When putting on a big special event, such as a concert, festival or golf tournament, a lot can go wrong…the artist doesn’t show up, the hall burns down the night before or it rains. For many events, you can buy insurance that will reimburse the losses you may incur when something goes wrong.
Click here for a special event insurance quote
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