Business insurance policies have been developed to cover virtually any risk that a business could possibly face. While most businesses won’t need every type of policy, each business will need several different tailor made policies to cover their unique business liability exposures. Unfortunately the brutal truth is that there is not one single insurance policy to cover everything.
Types of Business Insurance
Commercial General Liability Insurance
- Bodily Injury
- Provides insurance coverage in the case that your company is held legally liable for someone else’s sickness, injury, or disease.
- Personal Injury / Advertising Injury
- Extends insurance coverage to your company for lawsuits like
- Libel / Slander
- Privacy rights violation
- Wrongful eviction
- False arrest
- Copyright infringement
- Extends insurance coverage to your company for lawsuits like
- Property Damage
- Provides insurance coverage in the case that your company is held legally liable for damage to someone else’s property. This can also include loss of use of the property.
- Products & Completed Operations Liability Insurance
- If your company makes, sells, or distributes a product, your company can be held liable for product safety. Product liability insurance covers claims that arise from defective products that cause injury or harm. Coverage should vary with the type of product that is made. For example, a hi-tech pharmaceutical company is exposed to much higher product liability risks vs a t-shirt manufacturer.
- Damage to Rented Premises / Fire Damage
- Covers damage you may cause to other people’s property as a result of fire, lightning, or explosion, whether you own your business property or rent it. This coverage even applies to other areas in your building that may be damaged as a result of negligence on your part.
- Medical Payments
- If someone gets injured either directly by you or at your place of business, medical payments coverage would pay for funeral and medical expenses incurred.
Professional Liability Insurance / Errors & Omissions Insurance (E&O)
This type of liability policy is also commonly referred to as errors and omissions insurance. This is most often purchased by businesses that provide professional services. Common examples include doctors, lawyers, insurance agents and real estate agents. It covers the professional business owner from malpractice, errors, or negligence in the services provided to their customers. Some states require certain professions, such as doctors, to carry this type of policy.
Commercial Property Insurance
Commercial property insurance policies are available for businesses that operate out of standard commercial buildings. These policies cover loss and damage to company property because of theft, fire, smoke, wind, hail, vandalism, and other covered perils. Company property is usually defined as buildings, equipment, documents, business interruptions, lost income, and money. If you run a home-based business, you can purchase similar coverage in addition to your homeowner’s policy. Depending on which insurance company you’re currently with, riders can be added to a traditional homeowner’s policy to cover certain losses, but it is generally not as extensive as separate coverage.
Workers Compensation Insurance
Any business domiciled in Nevada that hires employees is required to have Workers Compensation insurance coverage. If an employee is injured on the job, this policy covers their medical expenses and loss of income. In the case of permanent disability, a workman’s compensation policy can provide benefits until the employee reaches retirement age. Most business owners aren’t required to cover themselves personally, it’s just the employees that are required. However depending on your business structure, you most likely need to opt-out of coverage by signing an exclusion form. Rates are based on hours worked and the average injury rate for a specific industry. For example, residential construction workers who work on roofs are rated higher than those who install interior trim because of the increased chance of falls from high work areas. A Workers Compensation policy also provides coverage for Employers liability as well.
Commercial Automobile Insurance
Certain business usage and vehicle types may be excluded from personal auto insurance policies. Since personal auto insurance policies were not meant for businesses, they are written and rated differently. Your business should obtain commercial auto insurance if your business
- Owns, leases or rents vehicles such as cars and trucks.
- Has employees who drive their own vehicles to conduct business.
- Has employees who operate company vehicles that are leased, rented or owned.
Commercial Auto Insurance provides a lot of similar coverages that a personal auto insurance provides. However there are also differences between a commercial auto insurance policy and your personal auto policy that may include eligibility, definitions, coverages, exclusions, and limits. The coverages commonly provided by a Commercial Auto insurance policy include
- Bodily injury liability coverage– pays for bodily injury or death resulting from an accident for which you are at fault. Also in most cases this coverage provides you with a legal defense.
- Property damage liability coverage– provides you with protection if your vehicle accidently damages another person’s property. Also in most cases this coverage provides you with a legal defense.
- Combined single limit (CSL)– Liability policies typically offer separate limits that apply to bodily injury claims and property damage. A combined single limits policy has the same dollar amount of coverage per covered occurrence whether bodily injury or property damage, one person or several.
- Medical payments, no-fault or personal injury coverage– usually pays for the medical expenses of the driver and passengers in your vehicle incurred as a result of a covered accident. This coverage is provided regardless of who is at fault.
- Uninsured motorist coverage– pays for your injuries and, in some circumstances, certain property damage caused by an uninsured or a hit-and-run driver. Underinsured motorist coverage is also included. This is for cases in which the at-fault driver doesn’t have enough insurance to pay for your damages.
- Comprehensive physical damage coverage– pays for damage to your vehicle from theft, vandalism, flood, fire, and other covered perils.
- Collision coverage– pays for damage to your vehicle when it hits or is hit by another object.
Commercial Umbrella Insurance / Excess Liability Insurance
Also commonly referred to as excess liability insurance, a commercial umbrella policy is a fail-safe for anything that slips through or exceeds the limits of any other policy. These policies are relatively inexpensive, but often require business owners to purchase the maximum limits on all other policies. Sometimes a business owner may be required to carry an umbrella policy. This is usually found in contract negotiations i.e. contractor bids, commercial real estate purchasing etc.
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