Understanding Business Insurance

What is business insurance?

Insurance coverage that protects businesses from losses due to events that may occur during the normal course of business operations.

A typical business insurance policy will include coverage for your property, legal liability, employee and customer related risks.

Business Property

  • Building
  • Business Income
  • Contents
  • Equipment
  • Outdoor Storage

Business Liability

  • Bodily Injury
  • Property Damage
  • Personal Injury
  • Advertising Injury
  • Products/ Completed Operations Liability

Professional Liability

Typical coverage provide:

  • Errors and Omissions
  • Legal Defense
  • Claims Expense

Specific Coverages based on Industry

It helps protect and defend professional services businesses like accountants, attorneys, barbers, builders. , consultants, contractors, doctors and more, against claims of negligence or malpractice made against them

 

Directors and Officers Liability

Typical Coverage provides:

Payable to the directors and officers of a company, or to the organization(s) itself, as indemnification (reimbursement) of defense costs in the event of a legal action brought for alleged wrongful acts in their capacity as directors and officers. Such coverage can extend to defense costs arising out of criminal and regulatory investigations/trials as well; in fact, often civil and criminal actions are brought against directors/officers simultaneously.

 

Workers Compensation

Work related injury coverages include

  • Loss Wages
  • Medical /Hospital Care
  • Vocational Rehabilitation
  • Disability
  • Death/Funeral

Workers’ compensation (WC) is a form of insurance providing wage replacement and medical benefits to employees injured in the course of employment. While plans differ among jurisdictions, provisions can be made for weekly payments in place of wages (functioning in this case as a form of disability insurance), compensation for economic loss (past and future), reimbursement or payment of medical and like expenses (functioning in this case as a form of health insurance), and benefits payable to the dependents of workers killed during employment (functioning in this case as a form of life insurance).     http://www.wcc.state.md.us/

 

Note: Worker’s Compensation does not eliminate the need for you to have your own disability, health and life insurance. Remember, it only provides these benefits if you are injured “on the job or in the course of doing a work related job”.

 

Business Auto

What types of vehicles need to be covered?

  • Owned
  • Hired
  • Non-Owned
  • Owned covers vehicles which are owned by the company

Hired Auto covers you for accidents you cause while driving rented vehicles for your business.

Non-Owned Auto covers your business for accidents caused by your employees while driving their own vehicle for your business.

Some of the main coverages are:

Liability coverage covers you for the injuries to the other party as well as damage to their vehicle from an accident where you were at fault.

Physical Damage collision coverage covers damage to your vehicle from an accident. Comprehensive coverage covers damage from things like floods and hitting animals.

Medical Payments Some states provide for a small amount of coverage for you or your employees’ medical bills in the event of a vehicle accident.

Uninsured Motorist pays for your injuries and damage to your vehicle if you are in an accident caused by an uninsured driver.

Maryland Personal Injury Protection (PIP) will pay for lost wages and medical expenses and can be used even if you caused the accident.

 

Umbrella Liability

A Commercial Umbrella Policy provides an additional layer of protection.

An umbrella can increase the limits of your

  • Business Liability
  • Employers Liability
  • Owned, Hired and Non Owned Auto
  • and additional policy coverages and endorsements

Note: An umbrella policy does not provide additional protection for a professional liability policy.

 

As an example, a covered claim against you is rewarded $1.4 million dollars. You only have $1 million dollars in general liability coverage so your umbrella policy kicks in an additional $400,000 to settle the claim.

 

Bonds

Two of the most commonly used bonds in business are:

Fidelity Bond

Sometimes known as a “Dishonesty Bond,” a Fidelity Bond covers employers from losses stemming from dishonest and/or negligent actions of their employees. Fidelity Bonds reimburse employers for losses, up to the amount of the bond, from employee fraud, theft, forgery, and embezzlement of the company’s cash and other valuable assets.

Surety Bond is a contract between three parties: a professional surety agent, a pre-qualified contractor (principal), and a project owner (oblige), which binds the contractor to fulfill the terms and conditions of the contract. If the project isn’t completed successfully, the surety assumes the contractor’s obligations and ensures that the project is completed. As you could guess, this bond is commonly used in the construction industry.   Note: Bonds, if used, have to be repaid.

Still have questions?   Contact us at http://www.insurance-financial.net/business-insurance/