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What to Know About Business Insurance

Bookmark and Share Most business owners would agree that it’s important to maintain insurance to protect business assets. When they think about insurance, business owners generally consider protection against hazards such as fire, flood or theft at their company sites. This is obviously an important protection to have. However, there are other types of hazards that may not be quite as high on the list, but protection could be every bit as important to offset significant financial losses. Here are five examples that underscore the need for comprehensive business insurance protection:

Company vehicle contents: If you operate a business with employees on the road making service calls to customers, chances are there is valuable equipment contained in the company vehicles. But a typical auto insurance policy would probably not cover the contents of a company vehicle if that valuable equipment is lost or stolen.

Tenant property improvement insurance: Do you rent space to conduct your business? Have you built out the interior of your space or made improvements to accommodate your business needs? If so, you probably made a considerable investment in the improvements. But many property insurance policies don’t include the value of the improvements made by a tenant to the existing structure. If you’ve invested in improvements, it’s worth taking a look at securing coverage to protect it.

Home-based business equipment: More and more people are working at home at least part of the time, even if they maintain an office or site elsewhere. Most don’t have insurance on the business equipment they keep at home; many assume their homeowner’s insurance would cover it. However, homeowner’s insurance generally does not cover business equipment. If you have expensive business equipment at home, you may want to consider purchasing additional protection.

Business interruption insurance: Remember the series of hurricanes that hit Florida? The wild fires that damaged cities and towns in California? The flooding that disrupted life in the Midwest? In addition to the effect that disasters have on individuals, they can bring businesses to a standstill for weeks or even months. Business interruption insurance can provide a way to get back on your feet.

Key person insurance: In many companies, the knowledge and skills of a single person or a top few are absolutely essential to the enterprise’s success. Key person insurance can help a company recover if an essential employee dies or becomes disabled for a lengthy time. The coverage can provide needed funds that allow the company to continue operating during a search for a successor or until the key employee returns.

As you can see, there are many hazards businesses face that aren’t covered under a typical insurance policy. However, you can get extra protection with the types of coverage outlined here. Since you invest so much time, money and effort into your business, it pays to make sure you have the protection you need.

Environmental Liability and the Start-up Company

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Why should every start-up company consider environmental liability coverage?

The harmless products and processes of the past have emerged as dangerous long-term pathogens of the present many times - lead-based paint, asbestos, even cigarettes.

Start-ups begin with a new idea, product or service which cannot, by the nature of business, be thoroughly time-tested. As an entrepreneur, you must decide, with sparse data, to go forward.

Unfortunately, injured parties have the advantage of hindsight and long-term studies.

The period of uncertainty after new launches creates a long-term liability for environmental liability as well as products liability. Think about:

1. What are the byproducts?
2. What is our waste stream?
3. Can our components be recycled?
4. What will be the result of employee exposures?
5. Are there any known potential issues.

Review the history of products liability. Caveat emptor morphed into warning labels which soon became punch lines. "Do not use your lawn mower as a hedge trimmer" or "Do not dive into two feet of water" seem like unnecessary warnings, but the legal cases were lost and money changed hands.

Environmental liability is likely to evolve along this same pathway.

The late seventies brought government interventions like EPA and an environmental Cabinet Post. Since then, public consciousness has risen dramatically and sensitivity towards environmental issues has grown.

Unfortunately for business owners, even the most green-minded, environmental impacts are still not well defined and responsibility not settled.

Unable to reduce or modify the environmental risk, the best solution is transferring the risk by insuring it.

No matter how benign you believe your company's product, process or service to be, you cannot adequately predict the environmental issues twenty years in the future. Certainly asbestos, a natural mineral, was considered safe by its promoters.

Look into environmental liability insurance for your start-up, or your mature company.

Start-up Company


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The holidays are almost upon us and alcohol will be flowing at company parties throughout the land. Beware! If an employee or guest gets inebriated at a social function sponsored by your business and then injures another person, you could be held liable.

Consider this scenario: After polishing off four eggnogs in an hour at the company’s Christmas party, one of your workers toddles off to his car. The employee almost makes it home when he runs a red light and T-bones a car. The car is damaged and injures the driver. The driver then sues your business for negligence in allowing the employee to drive home although he was clearly “under the influence” at the company party.

What’s more, under state and local “social host” laws, your business might face a fine or even imprisonment for continuing to serve alcohol to an adult who is legally drunk.

Under your comprehensive general liability policy is a clause for host liquor liability. The insurance company will pick up the tab for property damage and bodily injuries, up to “each occurrence” or “general aggregate” limits for the CGL. This coverage will also pay for court costs, legal fees, and other expenses – and these payments will not apply to the limits.

Be sure not to confuse host liquor liability insurance with Liquor Liability coverage, which protects businesses that manufacture, serve, or sell alcoholic beverages (such as liquor stores, bars, and taverns) against claims for injuries caused by intoxicated customers. If you’re in one of these businesses, you’ll need both types of policy.

To learn more, feel free to get in touch with our agency at any time.


What Does "Aggregate" Mean?

Bookmark and Share A key question in buying an insurance policy is "How much will it pay when I need it?" For most coverages, such as Property, the answer is fairly clear -- the amount listed on the front page of the policy (known as the "declarations page") for the specified property is the most you can collect for a loss to it. For damage to an auto, the policy usually sets a maximum payment equal to the current "book" value of a similar vehicle in similar condition.

Some policies have another limit -- called an "aggregate" -- on coverages. For example, your Liability insurance will set an aggregate limit: Basically the maximum amount the policy will pay in a given year for all damages under the policy, no matter the size or number of the claims. Depending on the nature of your business, the amount you'll consider adequate for your aggregate can differ greatly from what's enough to cover any single claim. Many policies automatically provide an aggregate equal to double your amount per claim (or "per occurrence"). Is this enough to meet your needs?

Let's sit down and discuss the aggregate limits under your current policies. If they're satisfactory, great! For those that don't meet your needs, due to changes in valuations or business procedures, we'll work with you to make the needed updates now, before you find yourself falling short tomorrow. Give us a call at your convenience.