Business Coverage 101
You know you need insurance, but what kind of policies and how many? As a general rule, companies need to protect both physical and financial assets against property damage and liability. The policies discussed here are among those most relied upon by companies of all sizes. Which ones are right for your needs? Your Payne Financial Group advisor can help you determine that.
Business owner package policy
Applies the "homeowners" approach to packaging insurance for eligible risks. With a basic business owner policy, you select an amount of insurance on a building and/or contents and it automatically includes a broad range of additional coverages, such as business income insurance and business liability insurance.
Typically with these policies, building coverage, personal property coverage and business income coverage are written without being subject to a coinsurance clause. Property coverage is on a replacement cost basis as long as at least 80% of the value of the structure is maintained at the time of loss.
Business owner packages are designed to be foundation policies for small and medium-size operations and offer the convenience of comprehensive protection for an indivisible premium determined by the amount of property coverage provided.
Additional coverage
Once you’ve got the basics covered. You may find that you need to add other coverage in areas of high risk or unique/additional exposure. Here are a few examples.
- Automobile Liability
Insures against loss through legal liability for bodily injury or property damage, caused by accident, and arising out of the ownership, maintenance or use of motor vehicles. Medical payments coverage is an optional inclusion.
- Automobile Physical Package
Insures operator's motor vehicles from physical damage from fire, theft and other causes of loss, including glass breakage and collision.
- Workers’ Compensation
Insures against claims for work-related injuries or diseases, suffered by employees, that are compensable by statute and/or are imposed by law as damages.
- Directors & Officers Liability
Insures corporate directors and officers against claims, usually by stockholders, alleging loss arising from mismanagement.
- Professional Liability
Professionals have increasingly been subject to third-party claims alleging bodily injury or property damage arising from the rendering of professional service. Such claims are based on malpractice, error or mistake in the performance of professional duties. The several forms of protection against these claims are variously called professional liability insurance, errors and omissions insurance or malpractice insurance.
- Employee Benefits Liability
Covers the cost to employees that result from incorrect information provided regarding their employee benefits. This DOES NOT INCLUDE fiduciary responsibilities or any discrimination or harassment situations. A simple example is not providing the employee with the appropriate COBRA information following termination that results in the ex-employee losing benefits. Coverage is provided either with a separate coverage part or as an endorsement to the General Liability policy.
- Employment Practices Liability
Employment-related Practices Liability policies provide liability coverage to employers for certain employment practices that lead to allegations of wrongful termination, discrimination or sexual harassment. Such coverage is excluded in standard CGL policies, and in excess liability, employers’ liability, and directors and officers liability insurance. Interest in the coverage has increased because of the enactment of federal civil rights laws and the passage of the Americans with Disabilities Act, and increases in litigation by employees.
- Umbrella Liability
A form of liability insurance protecting policyholders for claims in excess of the limits of their primary automobile, general liability and workers’ compensation policies, and for some (few) claims excluded by their primary policies that are subject to a deductible.
