Commercial Lines of Insurance

Business Income Insurance  |  General Liability Insurance  |  Professional Liability Insurance  |  Workers’ Compensation  |  Automobile  |  Bonds

The Basics of Property Insurance

The more successful your business becomes the more assets you accumulate Commercial Property Coverage provides the protection that you need to make sure those assets are safe. Occurrences such as a fire, burst pipe, hurricane or flood could damage or destroy your business’s building, machinery, or other assets. And, while you recover from such a disaster you may have trouble paying your employees because all of the business funds are going to repairing damage.

Commercial Property insurance coverage comes in many forms to suit your specific needs. Before purchasing coverage, take a complete inventory of all your business property to determine what you need to insure and the cost of replacement.

Types of Property you may need to Insure

• Buildings and other structures (leased or owned)
• Furniture, equipment and supplies
• Inventory
• Money and securities
• Records of accounts receivable
• Leasehold Improvements and betterments you made to the rented premise
• Machinery/Boiler
• Electronic data processing equipment (computers, etc.)
• Valuable documents, books and papers
• Mobile property (construction equipment, etc.)
• Property in transit
• Cargo
• Satellite dishes
• Signs, fences and other outdoor property not directly attached to the building

Types of Property Insurance Policies

Basic Property Insurance covers losses due to fire or lightning, including the cost to remove property as a way to protect it from further damage. Should you want to purchase more than basic coverage, you can buy a standard policy that provides coverage for extended perils, such as theft, flood, windstorm, hail, earthquake, acts of terrorism, explosion, riot, smoke, civil commotion, and damage by aircraft or vehicles. Coverage for vandalism and malicious mischief can also be included.

Are You Buying Enough?

One of the most important aspects of purchasing Property Insurance is making sure that you buy enough coverage to provide for the replacement of your damaged property. A typical policy will provide the replacement cost value for your building and business property. Replacement cost value is the amount that is necessary to replace or rebuild your building or repair damages with similar materials, without considering depreciation. Actual cost value, on the other hand, is the value of your property when it is damaged or destroyed. This amount is typically determined by subtracting the depreciation from the replacement cost value.

Most property insurance policies include a coinsurance clause, which requires you to provide the insurance company the cost to replace your property, within a given percentage (the coinsurance percentage). The proper valuation allows for you to receive enough to replace your damaged property.

While you will never collect more than the value you provide, under-insuring your property (whether on purpose or not) will not only result in receiving less than required to replace the damaged property, but you may incur a penalty. Your claim payment will be diminished by the same percentage the property was undervalued- which can add to thousands of dollars!

Business Income Insurance

Are You Covered in Case of a Business Interruption?

If a fire caused your business to temporarily close, what would you do? Ideally, you would move to a temporary location while your permanent place of business was being repaired. While the fire damage to your property would be repaired by your Property Insurance policy, Property Insurance does not automatically cover the loss of income or extra expenses you might incur as a result of the fire. Business Interruption Insurance, also known as Business Income coverage, will provide coverage for these exposures.

What is included in a Business Interruption Insurance Policy?

• Compensation for lost income for up to a year (or more) if you have to close or vacate your premises as a result of damage covered by your Property Insurance policy.
• Reimbursement of the net profit that you would have been earned had the disaster not occurred.
• Payment of continuing operating expenses, such as a mortgage, that must be paid even though your business is temporarily closed.

Considerations for Business Interruption Insurance

• Business Interruption Insurance can only be purchased as part of a Property Insurance or Business Owner’s policy.
• Policy limits should be sufficient to cover a reasonable time to rebuild your permanent business space.
• Generally there is a 72-hour waiting period before coverage applies but some carriers that we have contracts with offer no time constraints on their waiting periods.
• The price of coverage depends on the risk of disaster to the premises. This may depend on the business location, nature of the business and how easily the business could function at an alternate location on a temporary basis.

What is Extra Expense Insurance?

Extra Expense Insurance is another valuable addition to a Property Insurance policy. This additional coverage provides funds to cover additional (or extra) amounts incurred to run your business as a result of a covered loss. Depending on your loss, Extra Expense Insurance may be sufficient to provide financial relief without having to utilize Business Interruption Insurance.

Insurance experts agree that Business Interruption Insurance is the most valuable additional Property Insurance coverage available. Yet, it is often overlooked by business owners. Since Property Insurance only covers the cost of physical loss or damage to buildings and contents in the event of a disaster, Business Interruption coverage provides coverage vital to maintain cash flow while your permanent business location is being repaired.

General Liability Insurance

General Liability Insurance: Your Defense Against Liabilities

The only way to effectively protect the assets of your business from the claims of third parties is to carry adequate Commercial General Liability (CGL) Insurance coverage. General Liability protects your business from bodily injury or property damage for which your business is determined legally liable.

What Does General Liability Cover?

A typical General Liability policy provides coverage for claims of bodily injury or other physical injury, personal injury (libel or slander), advertising injury and/or property damage as a result of your products, premises, or operations, and can be offered as a package policy with other coverages such as, Property, Crime, Automobile, etc.

As a safeguard against liability, General Liability enables you to continue your normal operations while the insurance company defends you against real or fraudulent claims of negligence or wrongdoing. General Liability policies also provide coverage for the cost to defend and settle claims. Additional General Liability coverages include:

• Defense Costs – coverage for legal expenses to defend claims brought against your business, regardless of who is at fault.
• Additional Insured – Coverage is provided for third parties whom you are required to indemnify through written contracts, agreements and permits.
• Coverage limits – are typically quoted per occurrence and aggregate (total coverage limit per policy term)
• Medical Expenses – Provides no-fault coverage for medical expenses if someone is injured on your premises or by your products.
• Products Liability – Provides coverage for bodily injury and property damage sustained by others as a result of your products.

How Much Coverage Does Your Business Need?

The amount of coverage your business should purchase depends on three factors: perceived risk, where you operate your business and the type business you operate.

• Perceived Risk – Consider the amount of risk associated with your business operations and functions. For instance, if you manufacture heavy machinery, you would generally need more coverage as compared to another organization that manufactures tissues. How much damage could your product or operation cause to a third party?
• Location of Your Business – If you operate in a jurisdiction that traditionally awards high damage amounts, you should consider higher limits of liability.
• Type of Business Operation – the more dangerous the product or business operation, the higher the limits of liability needed.

Professional Liability Insurance

Errors & Omissions Insurance: A Cost-Effective Approach to Protecting Your Business

It’s a good news, bad news situation. The bad news: Lawsuits- once a measure of last resort- are now commonplace in settling disputes. The good news? You can protect yourself, and your business and reputation, by investing in professional liability coverage, also known as Errors and Omissions (E&O) insurance.

General Liability insurance only provides indemnification for claims of bodily injury and/or property damage alleged by a third party to have been caused by your business. It provides no coverage for claims alleging other losses (such as monetary loss) where there is no bodily injury or property damage.

E&O insurance is supplementary liability insurance that provides this important coverage in the event of a lawsuit due to a negligent act, error or omission. In addition to claims of error, omission, or negligence, it can also protect against slander, libel and breach of contract.

Who needs E&O coverage?

It is a very important coverage for anyone who gives advice, makes educated recommendations, designs solutions, or represents the needs of others. Service professionals, such as accountants, computer consultants, software developers, planners, architects, engineers, contractors, etc., are prime candidates for E&O insurance. Specialized forms of E&O coverage are also available to professions such as appraisers, real estate agents, insurance agents, home inspectors, notaries, and Lawyers.

E&O policy overview

E&O policies generally have both a limit per claim and an annual policy limit. The claim limit is the maximum amount paid for any single event, and the annual limit is the maximum paid in any one policy year. Typical limits range from $250,000/$500,000 (per occurrence/aggregate) to $2,000,000/$4,000,000 and differ depending on the type of business.

To be eligible for this specialized insurance, candidates normally have to have to provide proof of licensure in their “covered class of business” and a summary of their experiences in their particular field or line of work.

Count on the experts

There are many different forms of professional liability insurance and multiple factors to consider when purchasing E&O coverage for your business. Because there isn’t a standard policy, an experienced agent who understands your company and can knowledgeably design a policy to meet your needs is very important.

Workers Compensation

Workers’ Compensation Insurance: An Overview

Workers’ Compensation provides benefits to workers injured on the job, including the cost of medical care, up to two-thirds of lost wages, and possibly a permanent disability. It also provides funds for funeral expenses and death benefits to dependants for employees killed from a work-related accident.

Workers’ compensation insurance is heavily regulated by the states. Individual state statutes and court decisions have shaped the handling of claims, evaluation of impairments, settlement of disputes, provision of benefits and control of costs.

Background of Workers’ Compensation Insurance

During the 19th century, the size of the country’s workforce grew exponentially. Unfortunately, workplace safety did not keep pace, and workplace accidents grew as well. At that time, the only way injured workers could obtain compensation for their injuries was to sue their employer. Many legislative proposals emerged early in the 20th century, focusing on compensating injured workers for their medical care and lost wages.

By 1949, all states had a system in place to provide compensation for injured employees. Under these systems, injuries were deemed “no fault”, and the employer was made responsible for providing compensation for the cost of medical care and lost wages. In exchange, the employee gave up his/her right to sue the employer for injuries. Currently, Texas is the only state where workers’ compensation is not mandated for all employers. Workers’ compensation insurance was initiated to indemnify the employer for these new, uncertain liabilities.

As part of the insurance package, the injured workers’ medical, rehabilitation, and lost wages are paid by the insurance carrier on behalf of the employer for as long as the worker’s injuries persist.

Unfortunately, not all injuries are completely cured. If a work-related injury results in an employee’s disability (even partially) , the disability will fall into one the following categories: temporary total, temporary partial, permanent partial or permanent total disability. The insurance carrier will pay a “permanency award” based on a series of factors proscribed by state law, including the age of the employee, the nature of the injury, and the percentage of permanence.

Workers’ compensation insurance can be purchased through by private insurers, state funds or the National Council on Compensation Insurance (NCCI).

The Employer’s Responsibilities

Employers are required to do the following to comply with Workers’ Compensation Insurance laws:

• Employers are required to provide coverage for their employees and are held liable for all injuries suffered by employees while they are on the job (with the exception of employers residing in the state of Texas).
• Pay premiums and provide the carrier with actual payroll numbers at policy expiration.
• Provide a safe work environment.
• Notify the carrier as soon as possible after an injury.
• Investigate injuries.

What you can do to manage your Workers’ Compensation Costs

There are many things that companies can do to lower their workers’ compensation costs-

• Review your insurance policy to make sure that all job classifications and payrolls are correct.
• Invest in workplace safety to avoid accidents, and improve loss experience. Actions such as providing a safe work environment, including personal protective equipment (PPE), training employees in safe work habits, and making your safety program a requirement of employment will reduce injuries.
• Utilize a managed care organization that has a relationship with your insurance company. This will help you save on medical treatment costs and will assure non-work injuries do not become work injuries.
• Create a modified duty program to allow injured employees return to work sooner. Under these programs, employees are assigned duties they can physically complete while they recover. The most successful return-to-work programs incorporate timely, quality medical care and assistance to reduce emotional stress after an accident.

These are just a few of many actions you can take to reduce workers’ compensation costs.  When it comes to Workers Compensation it is very important to work with an agency that has the experience and knowledge that can help reduce these costs.

Automobile Insurance

All You Need to Know About Automobile Insurance

Automobile Insurance comes in two parts- liability insurance which serves as a safeguard against financial hardship by indemnifying you in the event of an at-fault auto accident where you cause bodily injury or property damage. The second feature of an automobile insurance policy provides payment for damages to your vehicle. All states except New Hampshire and Wisconsin, require vehicle owners to carry liability insurance.

Types of Coverages

A basic Automobile Insurance policy contains these coverages:

Bodily Injury Liability and Property Damage Liability

• Bodily Injury Insurance covers the costs of personal injury you cause others, such as medical bills, lost wages, and pain and suffering. It also covers legal fees in the event you are sued.
• Property Damage Insurance compensates others to replace or repair property that you damage or destroy (other vehicles, fences, buildings, etc.).
• There is usually no deductible included on Automobile Liability Insurance.

Collision Coverage

• Pays to repair your own vehicle after an accident.
• Coverage applies after deductible is met. Example, Damage to your vehicle is $5,000 and your collision deductible is $500 the total amount paid by the insurance company will be $4,500.

Comprehensive Coverage

• Pays for damages to your car that were not caused by an accident, such as fire, theft, vandalism, natural disasters, hitting an animal, etc.
• Glass coverage is also covered under this portion of the policy.
• Coverage applies after deductible is met.

Medical Payments

• Medical Payments (MedPay) coverage compensates for medical expenses for the driver and his/her passengers as a result of an accident, regardless of who was at fault.

Personal Injury Protection and No-Fault Coverage

• Personal Injury Protection (PIP) coverage pays for medical expenses and lost wages for the driver and his/her passengers who are injured in an accident. PIP also covers funeral expenses, and is required in 16 states.
• No-fault coverage pays for losses, regardless of who was at-fault in the accident.

Uninsured/Underinsured Motorists Coverage

• Uninsured Motorist (UM) coverage pays for medical bills and damage to your vehicle if you vehicle is hit by a driver who does not have automobile insurance or if you are involved in a hit and run accident. This coverage is required in most states.
• Underinsured Motorist (UIM) coverage takes effect when you are hit by a driver who does not have enough automobile insurance to cover all of your medical bills and/or property damage. In this circumstance, the at-fault driver’s insurance would pay to its maximum, and then your UIM coverage pays the remainder up to your policy maximum so you will not be left “high and dry,” so to speak.

Optional Additional Coverages

There are several important endorsements available to enhance your automobile coverage and ensure that your business vehicles are properly covered. Here are just a few:

• Rental Reimbursement coverage pays for a rental car if your vehicle is lost or stolen.
• Loss of earnings coverage reimburses you for lost income when your vehicle is unusable and a substitute is not available.
• Towing and Labor coverage pays for fees as a result of breakdowns.
• Gap coverage for new vehicles pays the difference between the actual cash value of the vehicle and the remainder left on a vehicle lease or loan if the vehicle is totaled.

Umbrella Liability Policy

Excess Liability (Umbrella) Insurance

Excess Liability Insurance (ELI), more commonly known as Umbrella Insurance, is one of the most important types of insurance your company can secure. It adds additional limits of coverage as well as protects your business from potential coverage gaps or reduced limits in your primary liability policies. Just as you carry an umbrella to protect you from a potential downpour, Umbrella Coverage protects your company from catastrophic claims that could close your business.

Umbrella Basics

Businesses choose Umbrella Coverage to increase the amount of insurance contained in their primary liability policies- commercial general liability, business automobile, workers’ compensation employer’s liability, and professional liability. Umbrella Coverage adds additional liability protection to not only cover exceptionally large single occurrences, but to increase the total amount of annual coverage available in the policy year. Without Umbrella Coverage, large events are financially devastating to most companies. And, Umbrella Policy costs are well less than those of increased primary policy limits.

Who should consider Umbrella Coverage?

All companies benefit from Umbrella Policies because it extends coverage so dramatically at a relatively small additional cost. The amount of coverage needed depends on the total value of your assets- because that’s what you’re exposed to in a lawsuit. Here’s how it works:

Following an at-fault automobile accident, a jury orders your business to pay $3 million in damages, but your general liability policy has a $1 million limit. Your company is responsible for the additional $2 million out of your pocket! However, a $2 million Umbrella policy will step up to cover the difference.

Bonds

The Value of Surety Bonds

The fashion in which public and private project owners evaluate and manage risk on construction projects can result in fiscally responsible decisions to ensure timely project completion. Since owners cannot afford to gamble on a contractor who is usually the low-bidder but whose ability may be uncertain, or who could end up bankrupt prior to completing the job, a surety bond is a great safety net for their investment.

What is Suretyship?

Suretyship is a very specialized line of insurance that is created when one party (an insurance company) guarantees performance of an obligation of another party.

What is a Surety Bond?

A surety bond is a written agreement whereby one party, the surety, obligates itself to a second party, the obligee, to answer for the default of a third party, the principal.

Types of Bonds

Contract (or Corporate) Surety Bond

The Contract (or Corporate) surety bond provides financial security and assurance for building and construction projects by assuring the project owner (obligee), that the contractor (principal), will perform the work, complete the project, and pay subcontractors, laborers, and material suppliers, as outlined via contract.

Contract surety bonds include:

1. Bid bonds provide financial assurance that the bid received has been submitted in good faith and that the contractor intends to enter into the contract at the price bid and provide the required performance and payment bonds.
2. Performance bonds protect the owner from financial loss should the contractor fail to perform the contract in accordance with its terms and conditions.
3. Payment bonds guarantee that the contractor will pay certain subcontractors, laborers, and material suppliers associated with the project.
4. Maintenance bonds guarantee against defective workmanship or materials for a specified period.
5. Subdivision bonds make guarantees to municipalities such as cities, counties, or states that the principal will finance and construct certain improvements such as streets, sidewalks, curbs, gutters, sewers and drainage systems.

Commercial Surety Bond

Commercial surety bonds guarantee performance by the principal of the obligation or undertaking described in the bond.

Commercial surety bonds include:

1. License and permit bonds are required by state or local regulations in order to obtain a license or permit to engage in a particular business (i.e. contractors, motor vehicle dealers, securities dealers, employment agencies, health spas, grain warehouses, businesses which collect liquor and/or sales tax).
2. Judicial and probate bonds, also referred to as fiduciary bonds, secure the performance on a fiduciaries’ duties and compliance with court orders (administrators, executors, guardians, trustees of a will, liquidators, receivers and masters). Judicial proceedings court bonds include injunction, appeal, indemnity to sheriff, mechanic’s lien, attachment, replevin, and admiralty.
3. Public official bonds guarantee the performance of duty by a public official, (treasurers, tax collectors, sheriffs, judges, court clerks and notaries).
4. Federal (non-contract) bonds are required by the federal government for such businesses as Medicare and Medicaid providers, or those who collect customs, immigration, excise, or alcoholic beverage taxes.
5. Miscellaneous bonds include coverage for lost securities, leases; and can guarantee payment of utility bills, or employer contributions to union fringe benefit plans, or self-insured workers’ compensation programs.

Janitorial service surety bonds are sometimes referred to as custodian bonds and are really just a specialized business service bond for the home and business cleaning industry. The janitorial bond protects your customers from losses incurred by dishonest acts of your employees.

Why do you need a janitorial service surety bond?

Can you trust all of your employees? If you are providing custodial services in homes or business you know just how vulnerable you and your business are to dishonest acts by your employees. Even if you have never had a claim and you have the utmost trust in your staff, the reality is you, your business and your employees are easy targets for blame if something goes missing in a client’s home or business.

Likewise, a janitorial surety bond allows you to rest easier knowing you are covered. They’re also a good way to instill confidence in your customers.

How do you get a janitorial bond?

Getting a janitorial service bond is very easy. All we will need from you is to fill out a short application and in most cases we can get your bond back to you the same day. We will need to know how much coverage you want and how many employees and owners you have and want covered.

Coverage amounts vary from $5,000 to $100,000 and your bond can be issued for 1 or 3 years depending on your preference.

How much does this bond cost?

Janitorial surety bonds are considered very inexpensive for the amount of protection they provide and how much consumer confidence they can instill. A $5,000 bond for five or fewer employees can be issued for as little as $100 a year while a $100,000 bond for up to 20 employees can carry a premium less than $650 a year.

How is Suretyship Different from More Common Forms of Insurance?

1. In traditional insurance, the risk of loss is transferred to an insurance company. However, in a suretyship, the ultimate risk remains with the principal and the protection of the bond is designated for the obligee.
2. In traditional insurance, the insurance company assumes that part of the premium for the policy will be paid out in losses. Yet, in true suretyship, the premiums paid are “service fees” charged for the use of the surety company’s financial backing and guarantee.
3. In underwriting traditional insurance products the insurer’s goal is to “spread the risk” among many businesses, while in a suretyship, coverage is seen as a form of credit extended to an individual business. Therefore, the emphasis is on a pre-qualification and selection process centered on the financial condition of the principal.