Commercial Property Coverages
Property Insurance provides coverage for loss or damage to real property (land and buildings) or personal property (everything else) at the described premises. A deductible will usually apply to each loss.
Buildings and Business Personal Property
Building coverage includes the actual building and structures, completed additions, outdoor fixtures, permanently installed fixtures, machinery, and equipment. Materials used to maintain and service the insured premises are also covered. Business Personal Property coverage includes property owned by the insured that is used in the insured’s business, including furniture and fixtures, inventory and stock, property of others in your care, custody or control, and other similar items that are not explicitly excluded.
Employee Dishonesty Coverage
Employee dishonesty coverage protects an employer from financial (money and securities) or other property loss due to the fraudulent activities of one or more employees.
Inland Marine Insurance
Inland marine insurance provides coverage for property in transit as well as property of others left in your care custody or control, employees property on-premises, contractors equipment and other unusual classes of property that are not generally found at a fixed location
Commercial General Liability Coverages
General Liability insurance provides coverage for bodily injury or property damage for which the insured is legally responsible due to negligence or as required by contract. The policy also includes coverage for liability arising from personal injury and advertising injury, medical expenses, accidents occurring on the premises or away from the premises and products, or completed operations. In addition to these limits, the policy pays defense costs
Pays medical expenses resulting from bodily injury caused by accident on the premise owned or rented by the insured or when prompted by the insured’s operations. Payment is made without regard to the insured’s liability.
Fire Damage Limit
Fire damage coverage provides coverage for fire damage to rented premises caused by the insured’s negligence.
An Umbrella/Excess Liability Policy provides an additional layer of protection over the limits of your primary, underlying policies (general liability, automobile liability, and sometimes even employers liability or professional liability). Also, this protects against catastrophic liability claims. Umbrella limits are typically available in $1,000,000 increments and can exceed up to $100,000,000. Most policies pay the ultimate net loss (total amount above the underlying, primary limit) for which the insured is legally obligated to pay subject to the self-insured retention (amount the insured must pay before the umbrella policy responds), similar to a deductible.
A typical commercial umbrella liability policy offers features such as worldwide coverage; personal injury coverage; blanket contractual liability protection (for both written and oral agreements); care, custody, and control coverage; non-owned aircraft liability; watercraft liability; advertisers liability; liquor law liability; excess liability; and an extension of protection to additional insureds.
Umbrella liability insurance indemnifies the insured for loss above the total applicable limits of liability stated in the schedule of underlying primary insurance policies. The umbrella liability policy is typically a “following form,” meaning that it tracks with the provisions of the underlying insurance. For losses that are not covered by underlying insurance, the umbrella policy generally does not apply.
Concerning any occurrence not covered by underlying insurance, or damage that is not covered by underlying insurance but that results from an occurrence covered by underlying insurance, the umbrella policy indemnifies the insured for its ultimate net loss. The loss must exceed the insured’s self-insured retention limit ($10,000 or $25,000, for example). It must involve damages that the insured is legally obligated to pay because of liability imposed by law or assumed by the insured under contract. Further, the loss must include personal injury, property damage, or advertising injury (all as defined in the Definitions section of the policy) caused by an eligible occurrence.
When a loss that is eligible for umbrella coverage is either not covered or only partially covered by underlying insurance (including incidents where no other insurance exists), the umbrella insurer has the right and duty to defend any suit against the insured. It is also permitted to investigate any loss and settle any claim or suit as it chooses. In case an insurer is prevented from defending an insured, the insurer will reimburse any defense costs and expenses. However, the expenses must be incurred with the insurer’s written consent. This last provision allows the insurer to exercise some control over its loss exposures.
Besides the named insured, other parties that gain insured status under an umbrella liability policy are any person or organization that a named insured agrees to protect under a written contract. The policy also protects an insured business’ executive officers, regular employees, directors, and stockholders, at least for losses occurring while these individuals are acting within the scope of their duties. Note that protection for additional insureds does not apply when a loss involves motorized vehicles, watercraft, or aircraft.
Like many other policies, a commercial umbrella policy defines several terms to express how coverage applies clearly. Some defined terms are advertising injury; completed operations; hired aircraft, hired automobile, and hired watercraft; immediate underlying insurance; named insured’s products; non-owned aircraft, automobile, and watercraft; occurrence and personal injury.
Maintain Underlying Insurance
The umbrella liability policy has a critical requirement. It holds the insured accountable for maintaining the policies listed in the schedule of underlying insurance. They must be kept in force, without alteration of terms and conditions, during the term of the umbrella liability policy. The one notable exception is for the reduction or exhaustion of any underlying aggregate liability limits that are caused by response to an eligible loss.
Directors & Officers Insurance protects your Company and the directors of your Company against claims from stockholders, employees, and clients. Since a director can be held personally responsible for acts of the Company, most directors and officers will demand to be protected rather than put their assets at stake. Also, Investors and members of your board of directors will not be willing to risk their own assets to serve as a corporate director or officer, no matter how heartfelt their belief in your Company. Finally, employment practices suits constitute the single most significant area of claim activity under D&O policies. More than 50% of D&O claims are employment practices related.
COVERAGE ENHANCEMENTS – ENDORSEMENTS AVAILABLE
Equipment Breakdown – Boiler and Machinery Insurance
This optional coverage extends farther than protecting just a boiler. You may need this critical coverage, which is often excluded from a regular commercial property policy, to cover all of your electronics systems, including telephone systems and computers. This insurance provides coverage for direct damage caused by the sudden and accidental events resulting in damage to property, expediting expenses (extra costs incurred to expedite recovery after a loss) and business interruption.
Business Income and Extra Expense
Business Income coverage protects a business at the time of claim. The coverage provides the business with the lost income during the interruption of the business being able to conduct the regular operation of its work (such as a fire that damages part of the building). During the time, the business is unable to operate at 100% and may have a loss of business income due to this occurrence. This coverage helps business owners recoup some of that lost income.
In addition to this coverage, most times, it is paired with Extra Expense coverage that offers additional protection to continue your normal operations. The coverage extends to compensate you for certain unforeseen expenses not directly caused by the damage. For example, the cost of moving equipment that wasn’t damaged in the event or additional commercial space to rent temporarily until your regular location is repaired.
Law and Ordinance
Provides protection when a substantial of a building is destroyed, and local ordinances require that the undamaged portion be demolished and rebuilt to meet current building codes. Coverages may include the cost of demolition, debris removal, and increased cost of construction per building code. Also included are expenses related to complying with the Americans with Disabilities Act.
Water Back up of Sewer and Drains
Water backup coverage is an optional add-on to your commercial insurance policy. This coverage pays for water damage resulting from a backed-up drain or sump pump.
Blanket Insurance provides blanket coverage for multiple properties with a single agreed limit for all properties that are scheduled locations
Flood and Earthquake
Flood and earthquake coverage are customarily excluded from most standard commercial insurance policies. However, this coverage is available as a buyback coverage and is priced according to limits requested.
Hired and Non-owned Auto Liability
Unless company employees use public transportation for all business needs, hired and non-owned insurance is an essential coverage that should be part of your business auto insurance program. Ordinarily, this coverage only provides liability protection for rental situations and errands, but sometimes physical damage insurance is available. A company does not have to own any vehicles to obtain hired and non-owned coverage. In this case, coverage can be added to the general liability policy. Examples of situations involving the use of non-owned vehicles for business purposes include asking an employee to pick up breakfast for a meeting, sending a sales representative to visit a client, or having a friend mail a package on her way to the post office.