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 is property insurance?

Property insurance protects your building(s), 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, damage caused by aircraft, automobiles and/or vandalism.

How does an umbrella insurance policy work?

A policy designed to provide protection against catastrophic losses, the umbrella insurance policy is generally written over various primary liability policies, such as a general liability insurance policy, business auto policy and employers' liability coverage. Once the underlying limits of these primary policies are exhausted, the umbrella liability policy would provide further coverage beyond the limits of those policies.

What does workers' compensation insurance do?

Workers' compensation pays for the rehabilitation, recovery and medical bills of an 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.

Where do I buy workers' compensation?

Almost all states are "open market", which means the coverage is underwritten by private insurers; and some states are "closed" or "monopolistic" - the coverage is underwritten by a state-sponsored fund (ND, OH, WA, WV, WY). In states that are open, rates can vary between insurance carriers depending on the type of business the carrier is attempting to attract. In an open market, the rates for workers' compensation are competitive.

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 for the repair or replacement of 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 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.

Even if you have a BOP, most small business owners should consider adding coverage for conditions that might not otherwise be covered. Additional coverages tailored to your industry are often available, such as temperature changes, equipment breakdown, or computer equipment failure.

Your independent agent can advise you on what coverages your small business needs.

What is business income insurance?

This insurance may reimburse you for the net income that would have been earned if, for example, a fire or other covered causes of loss had not occurred. Losses due to down time or extra expenses needed to restore operations (such as additional property rental) also may be covered.

What is employment practices liability insurance?

Employment practices liability insurance (EPLI) is designed to protect employers against claims of employee sexual harassment, discrimination, wrongful termination and other employment-related litigation. Many insurance companies offer employment practices liability insurance as part of their business owners' policy or as a stand-alone policy.

Please Note: Refer to the policy for complete details, including features, costs, eligibility, renewability, limitations and exclusions.