Armour Trust Financial
Business
What is Business Insurance?
Business insurance protects your investment by minimizing financial risks associated with unexpected events such as a death of a partner, an injured employee, a lawsuit, or a natural disaster.Â
Business Insurance is a broad name for different coverages available to the business owner to protect against losses and to insure the continuing operation of the business.Â
Major Types of Business Insurance
General Liability InsuranceÂ
- A standard insurance policy issued to business organizations to protect them against liability claims for bodily injury and property damage arising out of premises, operations, products, and completed operations; and advertising and personal injury liability.
Commercial Auto Insurance
- Covers cars, trucks, motorcycles, and other road vehicles owned by or operated within a business. Its primary use is to provide financial protection against physical damage and/or bodily injury resulting from traffic collisions and against liability that could also arise therefrom. Commercial auto insurance may also offer financial protection against theft of the vehicle and possibly damage to the vehicle, sustained from events other than traffic collisions.
Commercial Property Insurance
- Covers risk of loss to an organization's buildings or personal property. Usually includes buildings, personal property of the insured business or business owner, personal property of others on site and in the insured's possession. Coverage can be provided on an all risk or specific perils basis.
Commercial Umbrella Insurance
- Commercial Umbrella insurance is liability coverage that is in excess of specified other commercial insurance policies and also potentially primary insurance for losses not covered by the other policies. When an insured business is liable to someone, the insured's primary insurance policies pay up to their limits and any additional amount is paid by the umbrella policy (up to the coverage limit of the umbrella policy).
Professional Liability Insurance
- Professional liability insurance (PLI), also called professional indemnity insurance (PII) but more commonly known as errors & omissions (E&O) in the US, is a form of liability insurance that helps protect professional advice and service-providing companies from bearing the full cost of defending against a negligence claim made by a client, and damages awarded in such a civil lawsuit. Professional liability coverage sometimes also provides for the defense costs, including when legal action turns out to be groundless.Â
Business Owner's Package
- A Business Owner's Package (often called a BOP) is an insurance policy that combines protection from all major property and liability risks in one package. It typically combines all the basic coverages required by a business owner into one bundle. It is usually sold at a premium that is less than the total cost of the individual coverages. Business Owners Policies usually target small and medium-sized businesses and typically contain business interruption insurance, which provides reimbursement for up to a year of lost revenue resulting from an insured property loss.
Workers Compensation
- Workers' compensation is a form of insurance providing wage replacement and medical benefits to employees injured in the course of employment in exchange for mandatory relinquishment of the employee's right to sue his or her employer for the tort of negligence.
Group Health Insurance
- Group health insurance coverage is a policy that is purchased by an employer and is offered to eligible employees of the company (and often to the employees' family members) as a benefit of working for that company. A group health insurance plan is a major part of many employee benefits packages that employers provide for their employees.Â
Group Life Insurance
- Group life insurance (also known as wholesale life insurance or institutional life insurance) is term insurance covering a group of people, usually employees of a company, members of a union or association, or members of a pension or superannuation fund. Individual proof of insurability is not normally a consideration in the underwriting. Rather, the underwriter considers the size, turnover, and financial strength of the group.
Group Disability Insurance
- Group Disability Insurance is a type of group insurance that provides regular income replacement payments to an insured member of the group in the event of an eligible disability resulting from illness or injury. Coverage is generally offered in two types: short-term disability (STD) or long-term disability (LTD).
Supplemental Insurance
- Supplemental insurance is extra or additional insurance that you can purchase to help you pay for services and out-of-pocket expenses that your regular insurance does not cover.
To learn more about the right business insurance for you.
What is a Business Owner's Package Insurance Policy?
A business owner policy packages all required coverage a business owner would need. Often, BOPs will include business interruption insurance, property insurance, vehicle coverage, liability insurance, and crime insurance . Based on your company's specific needs, you can alter what is included in a BOP.Â
Typically, a business owner will save money by choosing a BOP because the bundle of services often costs less than the total cost of all the individual coverage's.
What's Covered with a Typical BOP Policy?
BOPs typically include:Â
- Property insurance for buildings and contents owned by the company -- there are two different forms, standard and special, which provides more comprehensive coverage.
- Business interruption insurance, which covers the loss of income resulting from a fire or other catastrophe that disrupts the operation of the business. It can also include the extra expense of operating out of a temporary location.
- Liability protection, which covers your company's legal responsibility for the harm it may cause to others. This harm is a result of things that you and your employees do or fail to do in your business operations that may cause bodily injury or property damage due to defective products, faulty installations and errors in services provided.
In most cases, BOPs do NOT cover professional liability, auto insurance, worker's compensation or health and disability insurance. You'll need separate insurance policies to cover professional services, vehicles and your employees.
To learn more about the right Business Owners' Package Policy for your business.
What is Business Auto Insurance?
Commercial Vehicle Insurance is a policy of physical damage and liability coverages for amounts, situations, and usage not covered by a personal auto policy. Seems obvious, doesn't it? But, seriously, knowing the difference between a personal auto insurance policy and a commercial auto policy (and when you need which) is important business—for your business. This type of business insurance covers a variety of vehicles. You may also have heard of this coverage referred to as commercial auto insurance, commercial car insurance, truck insurance, or fleet insurance.
To learn more about the right Business Auto Insurance for your business.
General Liability (GL) insurance, sometimes called small business liability insurance or commercial liability insurance, provides insurance coverage for your business against claims made by others including bodily injury, damage to property, or personal injury.
If someone comes to your place of business and is injured, a general liability policy could cover their medical costs. If someone else’s property is damaged and you are found to be responsible, the repair or replacement cost could be covered. And if someone’s reputation is damaged by something you or an employee said or wrote about them, the associated costs could be covered.
Why do I need General Liability Insurance?
As a small business owner, you may be legally responsible if another person gets hurt or if their property is damaged while at your business or because of something you did. Make sure your business is properly protected against risks.
You should consider general liability insurance coverage if you or your employees:
Interact with clients face to face
If you visit a client’s place of work, or clients visit yours, there is always the possibility someone could get hurt and require medical treatment.
Have access to customer’s property
If a customer’s property is damaged at your location or at a job site, general liability insurance could cover the cost to repair or replace it.
Use advertising to market your company
If you promote your company and accidentally use wording that is under copyright or trademark, general liability insurance could cover you if a claim occurs.
Use third-party locations for business related activities
If someone (other than you or an employee) is injured on a job site where you are responsible, general liability insurance could cover their medical costs.
Require coverage in order to be considered for a project
If you propose or bid on certain contracts, liability insurance could be a condition of the contract award.
To Learn More about General Liability Insurance
What Is Commercial Property Insurance?
Commercial property insurance is used to cover any commercial property. Commercial property insurance protects commercial property from such perils as fire, theft, and natural disaster. A variety of businesses, including manufacturers, retailers, service-oriented businesses, and not-for-profit organizations carry commercial property insurance. It is generally bundled together with other forms of insurance, such as commercial general liability insurance.
KEY TAKEAWAYS
- Commercial property insurance is insurance used to cover property and equipment from the risk of disasters.
- Different types of properties and equipment are considered for commercial property insurance.
- Several factors, such as location and occupancy, are considered while determining the cost of commercial property insurance.
Understanding Commercial Property Insurance
Commercial property insurance can be a major expense for businesses that use equipment worth millions or billions of dollars, such as railroads and manufacturers. This insurance essentially provides the same kind of protection as property insurance for consumers. However, businesses can usually deduct the cost of commercial property insurance premiums as expenses. Commercial property insurance generally does not cover losses arising from tenants using the building.
When determining how much a company should pay for commercial property insurance, the value of a business' assets, including the building, is the primary factor. Before meeting with an agent to discuss coverage, a company should take an inventory of their physical assets located at their property. This information will help determine what exactly would be the replacement value and the level of coverage the business should get.
With an increase in the number of natural disasters, weather conditions in the area where the building is located have also become an important factor in determining the cost of commercial property insurance. Commercial insurance rates are generally higher for properties located in the vicinity or inside geographies with significant risk of weather-related catastrophes. For example, rates are higher for properties located near regions prone to wildfires in California.
Factors Considered in a Commercial Property Insurance
- Location: Buildings in cities or towns with excellent fire protection typically cost less to insure than buildings outside a city or in areas with limited fire protection.
- Construction: Buildings made of potentially combustible materials will have higher premiums, while those made of fire-resistant materials could earn a discount. Additions to an existing structure might affect a fire rating, so it's a good idea to talk to an agent or insurance company before remodeling. Internal structural elements can also change a fire rating. Using wood partitions, floors, and stairways in an otherwise fire-resistant building will likely nullify any rate reduction. Fire-resistant interior walls, floors, and doors can help maintain a good fire rating.
- Occupancy: A building's use also affects its fire rating. An office building will likely rate better than a restaurant or auto repair shop. In a building with multiple tenants, one hazardous occupant will negatively affect the fire rating of the entire building. If a business is in a building with a more hazardous tenant, premiums will be higher.
- Fire and theft protection: How far are the nearest fire hydrant and fire station? Does the business have a fire alarm and sprinkler system? How about a security system?
Property to Consider for Commercial Property Insurance
Some particular places on your property to consider insuring include:
- The building that houses your business, including if it is owned or rented
- All office equipment, including computers, phone systems, and furniture, whether they're owned or leased
- Accounting records and essential company documents
- Manufacturing or processing equipment
- Inventory kept in stock
- Fence and landscaping
- Signs and satellite dishes
To Learn More about Commercial Property Insurance
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