Business Insurance

The business owner package policy—or BOP—provides many, though not all, of the insurance coverages needed by many small- or medium-sized businesses. They vary by insurer, but standard features of the BOP or “package” policies include property coverage for buildings, equipment and contents; liability for premises and operations; and more.

Often the greatest loss to a business damaged by fire or another peril is the loss of income due to inability to continue operations. Several forms of business income insurance exist to protect against these losses. For example, a BOP policy typically includes earnings insurance, which compensates the business for the net loss resulting from interrupted operations.

If you have company-owned vehicles, you need a commercial automobile policy. A commercial auto policy provides the same kind of coverages as a personal auto policy, protecting the business against liability for injury or property damaged caused by vehicles you own or have responsibility for and for any physical damage they may cause.

Your organization can become liable to third parties for injury or property damage in a variety of ways. Commercial liability policies address the principal sources of claims.

Commercial property policies cover loss or loss of use to any type of property, particularly buildings, equipment and contents. Commercial property policies typically include coverage for business income or loss of use. You can cover special types of property, such as valuable papers, computers and electronic media, money and securities, agricultural equipment, livestock, works of art and more, under the same commercial property policy that covers your building and contents, or in separate policies.

Lawsuits today can mean big money, more than the limits found in a typical insurance policy. Most package policies or even primary liability policies provide liability limits of $1 or $2 million or less. That’s why businesses also need umbrella insurance.

State workers’ compensation laws require most employers to compensate employees for injuries, illnesses and injuries incurred on the job. Workers’ compensation insurance compensates injured workers or their families for lost wages and survivor benefits, pays medical expenses and more.

Whether you are an artisan contractor, such as a carpenter, plumber or electrician, or a general contractor, you have a wide variety of insurance needs.

This is a property policy usually written “over” or to supplement a named perils commercial property policy, so it excludes coverage for fire, windstorm, etc. Most importantly, it provides “all risk coverage,” often including earthquake and flood. DICs are written for a blank limit, without a coinsurance clause and usually for large property risks.

Think of it as professional liability insurance for directors and officers of a corporation. Like anyone, directors and officers can make mistakes of judgment, but when they make mistakes based on negligence, recklessness or bad faith, they may be held liable for their acts or omissions. Directors & officers policies typically have two parts. Part A provides direct reimbursement for third-party claims brought against directors and officers.

Like flood insurance, earthquake coverage can be expensive if you need it. Commercial insurers tend to price it more dearly just after an earthquake.

If you have employees who handle money or securities or are in a position to compromise the value of your assets through a dishonest act, you need this insurance.

Often issued as a separate policy, but also found as an endorsement to a liability or D&O policy, this liability insurance protects employers against charges of discrimination, wrongful discharge, sexual harassment, hostile work environment and similar work-related acts.

Equipment breakdown insurance can cover an extensive list of equipment, including piping, turbines, engines, pumps, compressors, electrical panels, generators and more. This insurance covers failure of many kinds of equipment, including boilers, machinery and electrical equipment.

Because the risk of flood is so great in the areas where flood insurance is actually needed, insurers are reluctant to provide it. Most flood insurance in the U.S. is provided by the National Flood Insurance Program, and the insurance companies that provide it do so through this program. For large risks, a DIC may be negotiated to cover flood.

If your firm has foreign locations or employees who travel on business internationally, you, your employees and their families have an exposure to ransom and extortion. These policies can pay the ransom and extortion amounts and related expenses, such as independent negotiators and travel and accommodation. Coverage may also apply to legal liability the firm may incur because it was negligent in hostage retrieval.

General liability policies include liquor liability coverage when the insured is not in the business of selling or providing alcoholic beverages and cover host or incidental liability, such as office parties or events the firm may sponsor.
A bar, tavern, restaurant, store or other entity engaged in trade relating to alcoholic beverages needs to specially include coverage in its general liability program.

Like other professional liability coverages, this covers negligence or wrongdoing, in this case by a medical professional, including failure to exercise the care, knowledge or skill appropriate for the circumstances. Most policies are claims-made, covering professionals only during the term of the policy. Insureds can often buy “tail” and “nose” coverage to make retroactive the effective date of coverage and to extend the deadline for claim-filing beyond the policy expiration date, respectively.

Like host liquor and advertising liability, this coverage is found in most liability policies, including packages such as the BOP, for businesses with no specific exposure. However, a manufacturer or even a seller of products probably has a much greater than average exposure and may need a specific product liability policy to protect it from loss or injury arising from defects or the malfunction of its product.

Also known as errors and omissions insurance, this insurance is available for a variety of occupations. It covers negligence or wrongdoing of the professional, including failure to exercise the care, knowledge or skill appropriate for the circumstances.

When putting on a big special event, such as a concert, festival or golf tournament, a lot can go wrong…the artist doesn’t show up, the hall burns down the night before or it rains. For many events, you can buy insurance that will reimburse the losses you may incur when something goes wrong.

Fidelity bonds are, like surety bonds, contracts between three parties (in this instance: the insurer, the employee and the employer) and they provide protection against employee dishonesty; we describe that coverage above. A surety bond is a promise by the insurer (or indemnitor) to pay an indemnitee should the principal (or insured) default on the obligation.