What is Commercial Insurance
Commercial insurance protects businesses against potential losses through unforeseen circumstances. This includes losses arising from things like damage to property or injury to employees. In addition, it can insure you against claims made by employees, customers and members of the public.
Types of Commercial Insurance
Running a business can be tough, the potential of lawsuits, losses, and even lack of compliance are among the many risks that can befall a business. Depending on your business, there are a variety of insurance packages that are appropriate to your commercial enterprise than others. Understanding which policies are most important to your business will help you get comprehensive protection.
Commercial insurance needs can vary significantly in business-to-business which means that your commercial insurance policy should reflect the individual needs of your organization. This article will highlight and explain some types of commercial insurance to help you evaluate your risk and address it accordingly.
Commercial General Liability Insurance
Commercial general liability insurance provides coverage to a business if you’re found legally liable against liability claims for bodily injury (BI) and property damage (PD) to a third party caused by the product you sell or the service you provide. This also offers protection in situations where you or your staff are conducting business offsite.
Coverage A: Bodily Injury and Property Damage Liability
Bodily Injury. Mitigate your loss when your business is found liable for an injury to a third party either on or off your business property. Your policy will pay for their medical expenses. This includes cuts, bruises, broken bones and the like. This includes bodily harm, sickness, or disease, including death.
For example, if a customer trips on loose carpeting to your office and falls and breaks his wrist. General Liability Insurance can help cover the costs of bodily injury claims against your business for this accident.
Property Damage. General liability insurance pays for property damage to a third party either on or off your premises if you are found liable.
For example, you operate a landscaping business and work you do leads to structural damage of a homeowner’s property. If the homeowner makes a claim against your landscaping business for property damage. Depending on policy limits, CGL can pay for some or all expenses associated with property liability claims.
Coverage B: Personal and Advertising Injury
Protects the policyholder against claims if your business’ advertising causes any damage to a person’s character, position in the community, and reputation. It protects the insured against:
- False arrest
- Malicious prosecution
- Infringing on other’s copyright
- Use of other’s advertising idea
- Wrongful eviction, entry or invasion of privacy
Coverage C: Medical Payments
Medical Payments coverage pays medical expenses (subject to the CGL policy’s terms and conditions) for bodily injury to people other than the insured or its employees resulting from an accident on the insured’s premises or work site. Here are some medical payments coverage that can help cover a range of expenses (depending on your policy):
- Medical expenses
- Surgical expenses
- Ambulance expenses
- Hospital expenses
- Professional nursing expenses
- Funeral expenses
Professional Liability Insurance
PLI or Professional liability insurance, also known as errors and omissions (E&O) insurance covers a business in the event that a client sues your business for professional advice or services that you provided which caused them financial harm due to mistakes or failure to perform on your part. Professional Liability claims may include negligence, misrepresentation, violation of good faith and fair dealing, and inaccurate advice.
Commercial Property Insurance
If your business relies on your property, tools, equipment and technology to help keep your business running, then you’ll want to consider Commercial Property insurance. It’s like homeowner’s insurance for your business, and it would cover losses from covered perils like fire, storm, vandalism or theft. In addition, the policy would cover things like business interruption, document replacement, and lost revenue. This policy protects structures and inventory such as an office, warehouse, furniture, machinery, products, or documents. Keep in mind, earthquakes and floods typically aren’t covered by commercial property insurance, unless those perils are added to the policy.
Worker’s Compensation Insurance
This coverage type is an absolute must-have because it is required under California law for all business owners that have employees. Worker’s compensation provides medical care, death, disability, and rehabilitation benefits to employees that have been injured performing a work-related task during working hours. In addition, it also protects companies from civil suits from their workers for workplace conditions that can cause an injury or illness.
Workers’ compensation provides coverage for:
- Medical expenses
- Vocational rehabilitation
- Death and funeral services
- Compensation for fatal injuries
- Missed wages during recovery
- Lawsuits related to work injuries
Business Owner’s Policy (BOP)
A business owner’s policy (BOP) bundles different types of business protection into one plan. BOP Insurance helps cover businesses from claims resulting from things like fire, theft or other covered disasters. In addition, it also helps cover claims that could arise from your business’s operation. Business owner’s policy cost is usually lower than it would be if a business-owner bought the coverages separately.
Business Owner’s Policy include:
- Liability protection
- Business interruption insurance
- Property insurance for buildings and contents owned by the company
Auto insurance, professional liability insurance, and workers’ compensation are not included in the typical business owner’s policy. You’ll need a separate insurance policy to cover professional services, vehicles and your employees.
Commercial Auto Insurance
If you use any vehicles for work, those vehicles must be fully insured to protect businesses against liability if an accident should occur. Commercial Auto Insurance offers bodily injury and property damage liability if you or an employee should suffer an accident during business hours when operating a company-owned vehicle. Work vehicles include company owned delivery vans, utility trucks, or any other vehicles owned or used by the business.
Whether covering one vehicle or a fleet, it’s important to understand what is and what isn’t included in your policy to ensure you’re not leaving yourself vulnerable to risk and potentially a loss.
What are the coverages in a commercial vehicle policy?
- Liability Coverage. Bodily injury liability (BIL) and property damage liability (PDL)protects your business if you or one of your employees causes injury or damage to another party while driving.
- Medical Payments or Personal Injury Coverage. Pays medical expenses for the driver and passengers of your vehicles if they’re in an accident, regardless of fault.
- Comprehensive Physical Damage Coverage. pays for the loss of your vehicle if it is stolen, or damage from perils such as theft, vandalism, falling objects, fire, glass breakage, and flooding.
- Collision coverage. Pays for damage to your vehicle if you hit another vehicle, another vehicle hits you or your vehicle rolls over
- Uninsured/Underinsured motorist coverage – pays for your injuries and, in some circumstances, certain property damage caused by an uninsured or a hit-and-run driver.
Commercial Umbrella Insurance
Commercial umbrella insurance provides an extra layer of liability protection by covering costs once the limits on a primary policy have been reached. In other words, commercial umbrella insurance complements your other liability coverages by covering the remainder of the claim, up to the umbrella policy limits.
If a customer had an injury on a business’s premises and sues the business for $2 million, but the company only has $1.5 million in liability coverage, a commercial umbrella policy could make up for the $500,000 shortfall, subject to the policy’s coverage limits.
Looking for extra coverage? Let us help you add an extra layer of protection for your business, get a quote today. We have been assisting business owners in getting the right coverage for over 40 years.