Different Business Insurance Types
Different Business Insurance Types
What Type of Business Insurance coverage Do I Need to Purchase for My Business?
Depending on the individual risk characteristics associated with your business, the broker-agent will show you with various coverage options for purchasing business insurance. A broker-agent's proposal is just that, a proposal. When all is said and done it is your responsibility to make an informed decision and choose the insurance that best fits your business plan. The relationship that you develop with a broker-agent is extremely valuable in this critical decision making process. An experienced broker-agent has dealt with hundreds of businesses similar to your own. Since business insurance can be complex, you need to feel free to discuss any terms, conditions, or concepts that are cloudy to you with your broker-agent. It is a broker-agent's service to answer your questions and to help you understand the insurance coverage you are purchasing. While your business may not need all business insurance lines, it is a wise decision to possess a simple understanding of the kinds of business insurance coverage available. While your business changes and expands you
should have the necessary knowledge to purchase business insurance coverage as new exposures arise. The following are some lines of business insurance cover broad areas of exposure common to most business operations:
Commercial Automobile Business Insurance:
Commercial automobile business insurance coverage is similar to the protection you might keep on your personal auto; however, commercial automobile exposures are usually more complex demanding specialty coverages to be considered based on the individual needs of your business. Essentially, commercial automobile business insurance coverage can safeguard your business from any liability stemming from automobiles used in your company or any damage to the covered automobile. A Business Auto Policy (BAP) has got the versatility to deliver coverage for business, personal, non-owned, or hired autos based on the coverage purchased and applied to each scheduled auto. In other words, automobiles may be separately scheduled together with related coverages. Coverage may vary by vehicle and a symbol or multiple symbols will specify the coverage assigned to a scheduled auto. These symbols are referred to as covered auto symbols and employ a simple numerical system (1-13). The automobiles are classified by weight (light, medium, heavy, extra heavy) and by kind of use (private passenger, service, commercial). Contrary to personal auto policies that separate bodily injury and property damage limits (split limits), BAPs commonly utilize a Combined Single Limit (CSL) for the limit of insurance. This produces higher limits for both coverages, including per occurrence limits. Common commercial automobile CSLs are $500,000 or $1,000,000.
Commercial General Liability - Business Insurance:
One of the key principles of liability coverage is this : it is comprehensive in nature. What this means is that the actual policy (insuring agreement) handles all hazards within the scope of the insuring agreement that aren't otherwise excluded. It is furthermore comprehensive for the reason that it offers automatic coverage for new locations and activities of your business, that can come about after policy inception and throughout the policy term. Commercial General Liability (CGL) is the standard commercial liability policy utilized to insure businesses.
There is three primary coverage sections that comprise a CGL policy: premises liability, products liability and completed operations. Premises liability handles liability for unintentional injury or property damage that results from either a condition on your premises or your operations in progress, regardless if on or away from your premises. A products liability hazard exists for all business that manufactures, sells, handles, or distributes goods or products. The hazard being the possible liability for bodily injury or property damage that arises out of your goods or products. Completed operations covers your potential liability for bodily injury or property damage which arises out of your completed work.
The major exclusions under a CGL policy include: deliberate injury; insured contracts; liquor liability; workers compensation and employers liability; pollution; aircraft; automobile; watercraft; mobile equipment; war; care, custody, and control; damage to your work; impaired property; sistership liability; and failure to perform. It will always be important to read and understand all coverage exclusions; however, it's especially important in a liability policy. Should you not fully grasp the policy exclusions or limitations with the CGL policy,
then simply contact your broker-agent and discuss completely until a working understanding is achieved.
Classification
The actual company you operate decides how a CGL policy is classified. Generally speaking, a particular code or codes (in some situations) are designated according to exposures that are common to your kind of company operation. Just how a business risk is classified is the first step to determine premium and a significant part to the
rating formula. Commercial rating and premium calculation will be discussed later in this article.
Limits of Insurance
The CGL policy offers separate limits of insurance for general liability, fire legal liability, products and completed operations liability, advertising and personal liability, and medical payments. An aggregate limit of liability is in force for the general liability, fire legal liability, advertising and personal liability, and medical payments claims. When total claims for all these parts exceed a expressed annual aggregate limit of liability, the policy limits are depleted and no additional claims can be paid from the policy for the term of the policy period. Additionally there is a individual aggregate limit of liability in force for products and completed operations liability claims.
This concludes Part Three - Different types of Business Insurance, Part four will be published in the next few days. In the mean time, you can read different commercial insurance quotes coverage options @
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