FREQUENTLY ASKED COMMERCIAL INSURANCE QUESTIONS
	What is a business owners' policy or a "BOP"? A BOP is a customized policy for small businesses that combines property insurance and liability insurance in one policy, and generally includes additional coverages at little or no additional premium. So it allows you to have broad coverage at affordable premiums. Most insurance carriers have customized BOPs for particular industries and services. What is property insurance? Property insurance protects your buildings and equipment, stock, furniture and fixtures. Some policies include equipment breakdown and business income coverage. Basic property insurance will generally cover your business for losses in the event of a fire or lightning strike and will pay the cost of removing property to protect it from further loss. Additionally, a standard small business insurance policy will usually cover losses from windstorm, hail, explosion, riot and civil commotion and damage caused by aircraft, automobiles or vandalism. How much property insurance does my small business need? Property insurance can be purchased on the basis of the property's actual value (the replacement cost minus depreciation); its replacement value (the cost of replacing the item without deducting for depreciation); or an agreed-upon amount. How does liability insurance coverage protect my small business? There are many different types of third-party liabilities to be covered for a business. Business liability insurance may protect you from claims arising from someone's bodily or personal injuries. Other items that could be covered are damage to the property of others, products-completed operations, advertising, premises operations, fire, legal liability and related legal defense costs. For instance, liability insurance will not only pay the cost of covered damages but also the attorney fees and other costs associated with your defense.. What does "personal and advertising injury" mean in general liability insurance coverage? Personal and advertising injury means being responsible for libel, slander or any defamatory or disparaging material, or a publication or utterance in violation of an individual's right of privacy; wrongful entry or eviction, or other invasion of the right of private occupancy; false arrest, wrongful detention, false imprisonment, or malicious prosecution; which occurs during the policy period. What does workers' compensation insurance do? Workers' compensation pays for the rehabilitation, recovery and medical bills of employee's work-related injuries, as well as lost time when they are unable to work because of a work-related injury. Workers' compensation is not a substitute for health or medical insurance, since employees are only covered for on-the-job injuries. When do I need to buy workers' compensation insurance? In most states, workers' compensation is required when you have one or more employees. There are a few states that do not require employers to carry workers' compensation coverage. How much does workers' compensation insurance cost? Workers' compensation pricing is based upon your employee payroll, the number and job classification of the employees, classification of your business and past loss experience. The employer pays for the cost of the workers' compensation. Why should I purchase commercial auto insurance? Many personal auto insurance policies exclude coverage if a vehicle is used mainly for business. A commercial auto policy provides coverage for autos owned by a business if these vehicles are in an accident. The insurance pays to repair or replace the vehicle and the vehicle of the third party damaged by the employee. It also pays for the medical expenses of those injured in an accident. Will my employees' personal cars be covered under a commercial auto policy if they are using their cars for business? Most commercial auto insurance policies cover the liability for a business if employees use their own cars for business, provided that the business owner has purchased coverage for non-owned liability. Separate non-owned physical damage coverage is available to cover actual damage to the auto. However, the employees' personal auto policy would be the primary coverage for damage to their automobiles. What is Hired Auto coverage? Coverage is for a vehicle whose use has been granted to another individual in return for a specified monetary remuneration. What is Non Owned Auto coverage? In commercial auto policies, refers to a vehicle the insured neither rents, borrows, owns or leases. Generally refers to cars your employees own that are used for company business. What is errors & omissions insurance? Errors & omissions insurance provides coverage for people who give advice, make educated recommendations, design solutions or represent the needs of others. "E&O" is also referred to as professional liability or malpractice insurance. This type of liability insurance would cover you and your employees in the event someone claims you incorrectly performed or failed to perform your professional duties. What is inland marine insurance? Why do I need it for my business? Despite its misleading name, inland marine is a broad type of insurance which covers articles that may be transported from place to place as well as via bridges and tunnels. Specifically, this type of insurance protects a wide range of high risk, mobile items, including: specialized contractor's tools and equipment, electronic data processing systems, from mainframe computers to laptops, fine art objects and jewelry. What is Business Interruption Insurance? Covers fixed expenses and the loss of profit in the event physical property is damaged by a named peril; requires that the business be shut down in whole or in part as a direct result of the named peril. Polices vary in length of time business needs to be shut down before coverage applies. What is a Hold Harmless Agreement? A contract that says one party can't be held responsible for the acts of another. What is a Certificate of Insurance? Evidence that an insurance policy has been issued, showing the amount and type of insurance provided. It may be used as evidence of reinsurance between companies, and it is the document containing specific details of property covered by Master or Open Policies. Marine insurance copies marked "original" and "duplicate" are issued as negotiable documents. In other words a printed certificate that states the essential provisions of your coverage, often required by customers who want proof you have insurance. What exactly does the term "bodily injury" in a liability insurance policy mean? This refers to the injury, sickness, disease, or even death, of any person that occurs during the policy period. What is Fire Legal Liability? This is Liability coverage for the insured's legal liability in cases where the tenant causes fire damage to the rented property. What is Umbrella Insurance? Insurance that extends your coverage beyond the limits of your basic insurance policy. So basically this insurance extends your coverage beyond the limits of your basic insurance policy. Insurance that kicks in once you've reached the limit of your basic policy. For example, if you suffered a $1 million dollar loss, and your property insurance covers $500,000, an umbrella policy could cover the remaining $500,000.
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