Businesses expose themselves to liability by virtue of opening their doors to customers and vendors. Commercial insurance, also known as business insurance, protects businesses from financial losses associated with running their business. The most common types of losses include property damage from natural disasters or liability insurance if the business is sued.
Different Types of Business Insurance
Depending on what type of business you have, you may have varied commercial insurance needs. The following types of insurance provide coverage for your business in the following ways.
- Business Income: Also known as business interruption insurance, this insurance covers loss of income that a business may suffer after an insured disaster.
- Commercial Auto: Covers auto-related incidents involving your business’ vehicles and drivers, such as break-ins or fender-benders.
- General Liability: Protects a business from injuries by non-employees sustained on the property.
- Crime: This covers the loss of merchandise and other assets of your business due to burglary, robbery, larceny, forgery and embezzlement.
- Worker’s Compensation: This type of insurance is required by all fifty states. It covers an employee in the event that the employee is injured while performing her work duties while on the job.
- Property: Known as “Commercial Property Insurance,” this insurance covers most real property and other items associated with normal business operations. They typically cover lighting systems or heating/ventilation systems, machinery used for your business, office furniture, computers, printers, laptops, as well as inventory and supplies.
- Commercial Umbrella: This covers any excess liability in case the liability insurance you already possess does not fully cover the damages. For example, if someone slips and falls in your store and you are found liable for $150,000 worth of damages, but you only have liability insurance for up to $100,000, the additional $50,000 may be covered by your umbrella policy.
What Doesn’t Commercial Insurance Cover?
Commercial insurance does not cover liability resulting from your negligence, or in states where strict liability is assessed.
How Can I Obtain Commercial Insurance?
To get business insurance, contact a licensed insurance broker or agent. They can help you assess how much coverage is sufficient for your business.
How Much Coverage Do I Need?
Asses the nature of your business to determine what type and how much coverage is necessary for your business. For instance, when considering how much liability insurance you need, evaluate your professional duties, the use of the premises, and the number of persons accessing the property. For property insurance, take into account your contractual obligations and the value of the property to be insured. You must also factor in any insurance requirements mandated by state law.
Common Commercial Property Insurance Disputes
The following are common property insurance disputes:
- Pricing: Disputes as to how much the insurance company will cover for damages is one of the most common disputes with an insurance company. For example, an insurance company who must pay the replacement costs for goods in your store may argue that the fair market value is far less than what you believe it to be.
- Fixtures: Fixtures are typically covered in business insurance, but what is and isn’t considered a “fixture” may be debatable.
- Non-Covered Items or Events: It is the insurance company’s job to cover you against covered losses, but they may argue that the event or the items are not covered by your policy. For instance, many insurance plans don’t cover floods.
What to Do If Your Claim is Denied
If your business insurance claim is denied, first check your policy to ensure that your claim is covered. If it is, file an immediate appeal. If your insurance company still refuses to cover your claim, consider taking legal action against your insurance carrier.
Should I Hire a Lawyer?
Business insurance policies tend to be voluminous and complex. State laws require business insurance to state exactly what it covers, but it may be difficult for a layperson to determine what is and isn’t covered. Hiring a business lawyer to go over your policy can help your company understand your plan and coverage. If your business is sued, an attorney can represent you and gives you the best chance of prevailing in your lawsuit.