Commercial Insurance Introduction
If you are starting a new business, thinking of starting a business or are already a business owner one of the most important things that you absolutely must do is purchase commercial insurance for that business.
Starting or maintaining a business is challenging and running a successful company comes with risks, it is vital therefore that you alleviate some of those risks by making sure that your new venture or established company is properly insured with an insurance policy that covers you for all types of possible risks
Obtaining commercial insurance quotes is relatively easy as long as you know which type of insurance you need and being insured means you are protecting not only your business but your livelihood too.
Commercial Insurance Quotes
Quotes for commercial insurance are not difficult to get and as long as your business is not considered to be high risk obtaining an adequate policy should be an uncomplicated matter. You need to find a licensed commercial insurance agent, either locally or online who can give you a quote for your company.
Business insurance is a competitive field, but getting a few quotes you should be able to evaluate the expected cost of insurance for your specific type of business, you can then use this information to either accept the quote that appeals most to you or go directly to an agent with the information you have gathered and see what type of cover they are willing to offer you. In most cases they will give you a proposal offering several different coverage options.
Commercial Insurers
In most cases the agent you choose to draw up your commercial insurance policy is not the commercial insurer. There are many insurers and a wide range of agents that work independently, as the insured party you will deal with your agent who will obtain your policy on your behalf from a commercial insurer. You will have little or no contact with your insurer which is why it is vital that you choose a legitimate licensed insurance agent.
Commercial Insurance Policies
There are several types of commercial insurance available and depending on the specifics of your business you will more than likely need more than one type of business insurance, below we have outlined some of the most common types of commercial insurance, it is advisable that you make yourself familiar with the following before you obtain an insurance quote.
Commercial Liability Insurance
The term commercial liability insurance in fact covers many different sub categories of liability insurance, while there are many specific types that you may or may not need, the general purpose of liability insurance is to cover a business against third party damages and legal action as a result of injuries to third parties. Below are some of the specific sub categories of business liabilities.
Commercial General Liability
This is the general liability that is most common and covers you against claims made against you for third party injuries that occurred on your property or were caused on your property. It will cover the legal fees associated with the claim as well as the cost involved in resolving the claim and any subsequent payouts.
Business Automobile Liability Insurance
This covers liability from company owned vehicles and damages caused to third parties as a result of accidents and incidents. It may also include uninsured protection and personal injury protection. Similar to personal automobile insurance but for vehicles that are used for business purposes.
Workers Compensation Insurance
This covers liability arising from allegations made against an employer or employers for occurrences such as negligence and damages suffered as a result of negligence on the employers behalf.
Professional Liability Insurance
Professional liability insurance is used to cover legal costs associated with claims made against an employer such as unfair dismissal, unequal hiring practices, hostile working environments and workplace bullying as well as sexual harassment clams and discrimination claims.
Errors and Omissions Liability Insurance
E&O insurance covers inadvertent failures or mistakes that cause injury to third parties such as payroll errors or other administrative errors. It does not cover errors caused by poor judgment and forgetfulness.
Commercial Umbrella Insurance
Most commercial liability insurance policies have an upper limit per occurrence and any amount over that limit is not covered which is where commercial umbrella insurance comes into play. Umbrella and excess liability will provide for claims over and above the standard limit of other types of insurance, it is an extra insurance and is in place to protect against unforeseen and extremely costly risks that occur. The limit for umbrella insurance can be decided by you, you can choose how high you want the policy to cover with the average limit being five million dollars or under. Umbrella insurance simply gives you added extra security above and beyond the typical limit although not all policies can be placed under umbrella insurance and it is important to find out which policies fall under the umbrella.
Commercial Property Insurance
Business property insurance is probably the least complicated type of insurance to understand. Basically commercial property insurance is what covers your businesses property, this can be your business premises, your equipment, stock, fixtures and fittings. Commercial property insurance can also be subdivided into various more specific types of insurance but basic business property cover will cover your business against significant financial losses due to damages,theft and unforeseen hazards that could disrupt or otherwise damage your business. Property insurance is also used to cover the property of others while it is on your premises. Below are some of the more specific types of property insurance that may or may not be covered in your policy, it is up to you to ensure that the insurance policy you choose includes all the cover necessary for your business
Inland Marine Insurance
Although this type of insurance does not at first appear essential to first time business owners, anyone who has previously had commercial insurance will be well aware that it is an important type of cover for any business owner who uses any form of transportation on land to transport their property. It covers damages that occur whilst your property is in transit and also covers damages that may occur to property that is in your care even if it is not your property.
Boiler and Machinery Insurance
As it sounds this type of insurance covers machinery and boiler breakdown as well as inspection and maintenance costs. Boiler and machinery malfunctions are a danger to a business if they are not maintained and pose a potential risk of fire and other damages and should be properly insured.
Business Interruption Insurance
This is an important type of commercial property insurance for any business, in the event of a fire or other disaster your normal business operations may be halted, either short or long term. Business interruption insurance covers you in the cases where you may have to cease business for an amount of time while either relocating or rebuilding and can help to cover what could otherwise be significant financial losses.
Glass Insurance
Simply covers breakages to any glass in or on your property as a result of vandalism
Ordinance and Law Insurance
O&A insurance covers the loss of property due to damages, it can cover the demolition costs, rebuild or reconstruction costs to the structure of your building after a fire or flood or other such occurrence.
Crime Insurance
Crime insurance covers against theft of property and assets either real estate, money or merchandise as well as fixtures and fittings and equipment. It not only covers theft but vandalism, forgery and larceny. For most businesses crime is a big factor and this type of cover is essential to protect your investment.
Commercial Insurance – Business Owners Policies
Business Owners Policies or BOP is a type of commercial insurance tailored to small to medium businesses, not all businesses are eligible and the restrictions are usually based on the size of the company and its premises, however if you have a small to medium business it could be an ideal option for you. Basically business owners policies (BOP) is an insurance package that includes many, but not all, of the important property and liability insurances listed above. Instead of taking out several different policies, BOP incorporates several of the common policies into one standard single insurance policy. It also usually includes loss of income insurance or business disruption insurance for when normal business operation must be halted due to damages, although it is a suitable policy for smaller businesses it does not cover every aspect and you should not assume that you are fully covered if you take this option, you will need to read through your policy as there may still be specific insurance policies that you will need to add alongside your BOP.
Applying For Commercial Insurance
When applying for commercial insurance for your business you will need to provide the following information. You will need to provide applicant information such as your name, address and contact details and you will usual be asked whether you are applying as an individual or as a partnership, whether your business is a corporation or joint venture, a limited corporation or non profit organization.
You will have to provide details on your business such as the start date and nature of business as well as a description of operations. You will also have to provide information on your business location, the year the property was built and if you are owner or tenant.
Additionally you will have to supply information of any known risks that have not been rectified, any risks that are associated with the nature of your business such as chemical uses, flammable or explosive stock and so on. You will also have to declare any losses of previous claims, rejected applications, past losses, any convictions or bankruptcies and any history of business losses.
While this guide goes quite in-depth into commercial insurance, it does not cover every type of business insurance policy available and you should always ensure that the quote you get or the policy you take out covers you for all eventualities. You should keep in mind your planned business expansion and review your policy on a yearly basis as your company moves forward.
