Commercial Insurance Terms
Property insurance pays for losses and damages to real or personal property. For example, a property insurance policy would cover fire damage to your office space.
In today's litigious society, even small mishaps can result in large lawsuits. That's why general liability insurance, along with property and worker's compensation insurance, are essential for most companies. Liability insurance protects the assets of a business if it becomes involved in a lawsuit. Other coverage for premises and operational liability, medical payments and contractual liability are also included. General liability insurance can be purchased separately or as part of a business owner's policy.
BOILER AND MACHINERY
Boiler and machinery insurance, sometimes referred to as "equipment breakdown" or "mechanical breakdown coverage," provides coverage for the accidental breakdown of boilers, machinery, and equipment. This type of coverage usually will reimburse you for property damage and business interruption losses. For example, this coverage would cover fire damage to computers.
Debris removal insurance covers the cost of removing debris after a fire, flood, windstorm, etc. For example, if a fire burns your building to the ground, the remains of the old building have to be removed before you can start rebuilding. Your property insurance will cover the costs of rebuilding, but not of removing the debris.
Builder's risk insurance covers buildings while they are being constructed. For example, a Builder's risk policy would cover losses if a windstorm takes down your partially constructed condominium complex.
Business interruption insurance covers lost income and expenses resulting from property damage or loss. For example, if a fire forces you to close your doors for two months, this insurance would reimburse you for salaries, taxes, rents, and net profits that would have been earned during the two-month period.
ORDINANCE OR LAW INSURANCE
Ordinance or law insurance covers the costs associated with having to demolish and rebuild to code when your building has been partially destroyed (usually 50 percent). For example, your three-story building is 100 years old. A flood destroys the basement and first two stories. Because more than 50 percent of your building has to be rebuilt, a local ordinance requires that the building be completely demolished and rebuilt according to current building codes. Property insurance covers only the replacement value, not the upgrade.
Commercial leases often require tenants to carry a certain amount of insurance. A renter's commercial policy covers damages to improvements you make to your rental space and damages to the building caused by the negligence of your employees.
ERRORS AND OMMISSIONS
Errors and Omissions (E&O) insurance covers inadvertent mistakes or failures that cause injury to a third party. The act must actually be an inadvertent error, and not merely poor judgment or intentional acts. For example, an E&O policy would cover damages arising from an accountant failing to file the appropriate tax documents, or a notary filling out notarizations improperly.
Malpractice insurance, or professional liability insurance, pays for losses resulting from injuries to third parties when a professional's conduct falls below the profession's standard of care. For example, if a doctor makes a mistake that other doctors of his specialty would not have made, his patient might sue him. A malpractice policy will pay his defense costs and any judgment or settlement. Malpractice insurance is available for doctors, dentists, accountants, real estate agents, architects, and other professionals.
A Commercial Umbrella policy protects you against a loss due to catastrophic lawsuits by providing business liability coverage above and beyond your basic standard liability policy. Your business can be covered for $1,000,000 up to $10,000,000 or even more in special cases.
EMPLOYMENT PRACTICES LIABILITY
Employment Practices Liability provides protection against the risks related to discrimination claims, workplace harassment, wrongful termination or other employment practices.
DIRECTORS AND OFFICERS LIABILITY
This type of insurance is generally purchased by corporations and nonprofit organizations to cover the costs of lawsuits against directors and officers.
Commercial automobile policies cover the cars, vans, trucks and trailers used in your business. The coverage will reimburse you if your vehicles are damaged or stolen or if the driver injures a person or property. If your business owns a car or truck, or a fleet of vehicles, you need Commercial Automobile Insurance.
Workers Compensation Insurance pays for medical care and physical rehabilitation of injured workers and helps to replace lost wages while they are unable to work. It may also provide benefits for dependents of those workers who are killed because of work-related accidents or illnesses.
An employee benefits plan can be customized to fit the needs of your business and your budget. We can develop a comprehensive program that offers the coverage you need to stay competitive and attract the best employees.