Tag: Business Insurance

Business Insurance 101: Certificates of Insurance

Certificates of Insurance make the business world go round and round. General contractors demand them from subcontractors. Commercial lenders request them from borrowers. Landlords require them from tenants. Virtually every business will request or will be asked to provide a Certificate of Insurance at one time or another, which raises an important question. What’s a Certificate of Insurance?

Certificates of Insurance (COIs) are used to verify insurance coverage. They are issued by insurance companies and agents to provide proof of insurance to the person or entity needing verification—the certificate holder. COIs provide specific information about existing insurance coverage, such as:

It’s important to know what COIs are, but so is knowing what they are not. Certificates of Insurance:

  • Are NOT insurance policies.
  • Do NOT provide certificate holders with any rights under the insured’s policy.
  • Do NOT extend or modify the coverage provided by the insured’s policies.
  • Do NOT create a contract between the insurance company and the certificate holder.

COIs are provided for informational purposes only. They offer a superficial snapshot of insurance coverage that is in place at the time it is created. Nothing more. In fact, a COI issued today may be out of date tomorrow. The only way to truly evaluate insurance coverage is by reading the policy itself. Nevertheless, as long as you understand their limitations, Certificates of Insurance provide a quick, easy and efficient way to request or provide proof of insurance coverage.

Please contact us to learn how Setnor Byer Insurance & Risk can help manage your Certificates of Insurance.

Don’t Lose Sight of Security Among the Internet of Things

Did you know that there will be nearly 21 billion devices connected to the Internet by 2020?

According to Gartner, an information technology research company, 5.5 million new devices are connecting every day. This rapidly growing network of Internet-enabled physical devices capable connecting, communicating and identifying with other devices is commonly referred to as the Internet of Things. Not surprisingly, businesses are looking for ways to harness its power and potential. Unfortunately, hackers are too.

The Internet of Things adds a new security dimension that businesses must consider. A single insecure connection could expose not only sensitive information transmitted by a device, but everything else on a business’s network. Though there isn’t a one-size-fits-all approach, the Federal Trade Commission has identified various security measures that businesses can generally adopt to help minimize the risks created by the Internet of Things.

Encourage a culture of security. Designate senior executives who are responsible for security. Since most security breaches are avoidable, train staff to recognize and report vulnerabilities. Address security expectations and requirements in contracts with service providers.

Adopt a risk-based approach. Direct attention and allocate resources to protect network connections that are most vulnerable and sensitive information.

Consider (and reconsider) the need to collect or retain sensitive information. Steps must be taken to protect sensitive information that is collected and retained out of business necessity. Unnecessary sensitive information should not be collected or retained at all.

Manage passwords.Implement an effective way to manage passwords. Do not rely on default passwords.

Take advantage of readily available security tools.There’s a tool out there for a number of basic security testing tasks, such as scanning networks for open ports, reverse engineering of programming code or decompiling, checking password strength and scanning for known vulnerabilities. Many of these tools are free, and some of them work automatically.

Protect interfaces between devices and servers. Weaknesses are often found at the point where a device communicates with servers. The interface between a mobile device and the cloud, for example, could create an opening for hackers to access an entire network. There are a number of ways to test entry points for weaknesses. “Fuzzing” is a method that sends a device or system unexpected input data to detect possible defects. Businesses should use manual and automated tools to test interfaces.

Limit permissions. Access to sensitive information should be limited to only those who actually need it. Limiting access to the lowest level that will allow for normal functioning is known as the principle of least privilege. To maximize effectiveness, permission limits must strike a balance between utility and security.

Utilize encryption. Standard encryption techniques are available to protect sensitive data that is stored on devices and transmitted to networks. Not all encryption is created equal, so stronger encryption methods should be selected over weaker ones.

Emphasize authentication. Security starts by making sure people are who they say they are. The importance of proper authentication has magnified the Internet of Things. An authentication failure involving a single connected device could expose the entire network to which the device connected. Depending on the nature of a business or its sensitive information, additional authentication measures may be necessary. For example, a two-factor authentication process that requires a password and a secure token.

Finally, businesses must remember that data security is a dynamic process that requires constant attention and frequent adjustments. Since hackers are constantly adapting, so must security measures. Nevertheless, it’s impossible to protect against every cyber threat or prevent every data breach, so business should seriously consider Cyber Liability Insurance. Unlike traditional business insurance policies, Cyber Liability and Security Breach (Cyber Perils) Insurance policies protect against privacy injuries, such as identity theft, and cover the cost of complying with data breach notice laws.

Given the complexity of the risk and the absence of one-size-fits-all coverage, an experienced insurance agent should be consulted to ensure that adequate coverage is obtained. Please contact us if you would like more information about insurance specifically designed to protect against cyber threats.

Additional information is also available in our weekly Risk Management Newsletters.

Business Interrupted? Don’t Let a Property Loss Jeopardize Your Business

Did you know that nearly 40% of businesses do not reopen and another 25% fail within a year after a catastrophe or disaster? The actual loss or damage to buildings, facilities and property is often the reason for this frightening statistic, but it isn’t the only reason. Businesses are increasingly struggling to recover after a property loss because of the economic impact caused by the interruption of business operations during and after the event.

It’s common for business operations to be suspended temporarily after a property loss. Depending on the severity of the loss, a business may be forced to shut down for weeks, possibly months. Though revenue often stops, expenses continue. The inability to pay expenses (payroll, mortgage, suppliers, taxes, etc.) can turn a temporary suspension of business operations into a permanent shut down. Business interruption insurance can prevent this from happening.

Business Interruption, also known as Business Income, is a type of commercial insurance that protects against loss of income when a covered loss causes a business to reduce or suspend its operations. In the event of a covered loss, business interruption insurance will cover lost revenue and fixed expenses, like rent and utilities, during the suspension of operations. Extra expense coverage is also available to reimburse costs over and above normal operating expenses, like temporary relocation costs.

Business interruption coverage is triggered when there is direct physical damage to property that was caused by a covered peril. For example, if wind damage is covered under a commercial property insurance policy, there would be business interruption coverage if operations were suspended due to a windstorm. On the other hand, if wind damage is not covered, there would be no business interruption coverage.

To calculate a business interruption loss, insurance companies need to determine how much the business would have earned if the loss had not occurred. They may review and consider various financial documents, such as tax returns, bank statements, profit and loss statements and balance sheets, to establish the amount of a business interruption loss.

According to the Insurance Information Institute, a recent report found that the economic impact from business interruption is often much higher than the cost of physical damage. Business interruption losses now make up a much larger part of overall property losses than they did just ten years ago. The increasing interdependence among businesses locally and globally also means that business interruption losses are expected to increase in frequency and severity.

Businesses should consider adding business interruption coverage to their existing insurance program. Though many aspects of this coverage are relatively standard, there are some variations among insurers and policy forms. For example, some policies may provide Civil Authority coverage. Given the relative complexity of business interruption coverage, an experienced and reputable insurance agent should be consulted to help identify needs and evaluate options.

Please contact us to learn how business interruption insurance can protect your business.

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OSHA’s Revised Injury and Illness Record keeping and Reporting Requirements

Each year there are more than 3 million serious (requiring more than first aid) workplace injuries and illnesses. Given the Occupational Safety and Health Act’s requirement that employers provide safe and healthy workplaces, this number is unacceptably high. To address this problem, the Occupational Safety and Health Administration (OSHA) recently revised various workplace safety regulations.

The most notable revision adds an electronic submission requirement to OSHA’s current record keeping regulations, which require employers with more than ten employees to keep a record of serious work-related injuries and illnesses. Employers with ten or fewer employees and employers in certain lower-hazard industries are partially exempt from this requirement. This revision becomes effective January 1, 2017, and will be phased in over two years.

The revised regulations do not change an employer’s current obligation to complete and retain injury and illness records. Covered employers are (and have been) required to record information about recordable injuries and illnesses on three separate OSHA forms.

  • Form 300 (Log of Work-Related Injuries and Illnesses)
  • Form 300A (Summary of Work-Related Injuries and Illnesses)
  • Form 301 (Injury and Illness Incident Report)

Under the revised regulations, submission requirements depend on the number of employees working at a single physical location where business is conducted or where services and operations are performed (an Establishment).

Establishments with 250 or more employees must begin electronically submitting information from Form 300A to OSHA by July 1, 2017. Information from all three forms (300A, 300 and 301) must be submitted electronically by July 1, 2018. Beginning in 2019 and every year thereafter, the information must be submitted by March 2nd.

Establishments with 20 to 249 employees operating in certain high-risk industries must electronically submit information from Form 300A to OSHA by July 1st of 2017 and 2018. Beginning in 2019 and every year thereafter, the information must be submitted by March 2nd. Though some of the industries designated as high-risk are obvious (agriculture, utilities, construction, manufacturing), others are not (grocery and department stores, museums, boarding houses). If you’re not sure whether this new electronic submission requirement applies, contact OSHA.

Additional revisions were made to promote complete and accurate reporting of work-related injuries and illnesses. As of August 10, 2016, employers must establish a reasonable procedure for employees to promptly and accurately report work-related injuries and illnesses. A procedure is not reasonable if it would deter or discourage a reasonable employee from accurately reporting injuries or illnesses. Employees must be informed about the reporting procedure.

Employers must also inform each employee that:

  • they have the right to report work-related injuries and illnesses; and
  • employers are prohibited from discharging or in any manner discriminating against employees for reporting work-related injuries or illnesses.

OSHA will provide a secure website for electronic submissions, including web forms for direct data entry and instructions for other means of submission. OSHA also intends to provide an interface for entering data from mobile devices.

OSHA estimates that it will take a typical employer with less than 250 employees about 10 minutes to create an account and another 10 minutes to enter the required information from Form 300A. For larger employers, OSHA estimates an additional 12 minutes will be needed to enter the required information for each injury or illness recorded on their Forms 300 and 301.

The revised regulations should serve as a reminder for employers of their obligation to provide a safe and healthy workplace. In addition to protecting employees from work-related injuries, employers may benefit financially from lower workers’ compensation insurance premiums.

Please contact us if you would like more information about controlling workers’ compensation insurance costs .

Additional information is also available in our weekly Risk Management Newsletters.

 

Florida Supreme Court Ruling May Increase Workers’ Compensation Premiums

A recent decision by the Florida Supreme Court may soon have employers paying substantially more for workers’ compensation insurance. In Castellanos v. Next Door Company, the Court ruled that Florida’s mandatory workers’ compensation attorney fee schedule is unconstitutional. In response to this ruling, the National Council on Compensation Insurance (NCCI) proposed increasing Florida’s workers’ compensation rates by 17.1%.

Under Florida Statute 440.34, attorneys who successfully secure workers’ compensation benefits for injured clients may be awarded attorneys’ fees. However, any attorney fee award, which is based on the amount of workers’ compensation benefits secured, must equal:

  • 20 percent of the first $ 5,000;
  • 15 percent of the next $ 5,000;
  • 10 percent of any remaining benefits that will be provided during the first 10 years after the claim is filed; and
  • 5 percent of any benefits secured after 10 years.

In Castellanos, the Florida Supreme Court considered whether this mandatory fee schedule is constitutional.

Marvin Castellanos suffered an injury on the job. The workers’ compensation insurance company refused to authorize the medical treatment recommended by its own designated doctor and raised twelve affirmative defenses to avoid paying compensation. After a final hearing, the Judge of Compensation Claims (JCC) ruled entirely in Mr. Castellanos’ favor.

Mr. Castellanos’ attorney spent 107 hours working on the case and requested an award of attorneys’ fees calculated at $350 per hour. Despite finding this request to be reasonable and warranted, the JCC was required to follow Florida’s mandatory fee schedule. Based on the actual value of the benefits secured, Mr. Castellanos’ attorney was awarded fees in the amount of $164.54, or $1.53 per hour.

The Court noted that the mandatory fee schedule does not consider the reasonableness of a fee and does not permit the review of grossly inadequate or grossly excessive fees. “Without the ability of the attorney to present, and the JCC to determine, the reasonableness of the fee award and to deviate where necessary, the risk is too great that the fee award will be entirely arbitrary, unjust, and grossly inadequate.” Accordingly, the Court ruled that Section 440.34 is unconstitutional.

As a result, the statute’s immediate predecessor, which was construed to provide for a “reasonable” award of attorney’s fees, was essentially revived. Though the statutory fee schedule remains the starting point for calculating fees, claimants must now be allowed to present evidence to show that its application will result in an unreasonable fee.

Though the Court emphasized that its ruling does not mean that claimants’ attorneys will receive a windfall, insurance companies disagreed. On May 27, 2016, NCCI, which is a licensed rating organization authorized to submit workers’ compensation insurance rate filings on behalf of Florida insurance companies, submitted a proposed rate increase to the Office of Insurance Regulation (OIR).

According to NCCI, the first year impact of Castellanos will be a 15% increase in overall Florida workers compensation system costs. (The total proposed rate increase of 17.1% includes factors that are not related to Castellanos.) NCCI proposes applying the increased rates to new and renewal policies that are effective on or after August 1, 2016. NCCI also proposes applying the increased rates to all policies in effect on August 1, 2016 on a pro-rata basis through the remainder of the term of these policies.

If NCCI’s proposal is approved, Florida would have the highest workers’ compensation rates in the Southeast. The OIR plans to hold a public hearing regarding NCCI’s proposed rate increase in the coming months, so stay tuned.

Even if the OIR approves all or part of NCCI’s proposed rate increase, there are ways to lower workers’ compensation insurance costs, such as promoting employee safety and maintaining a safe work environment.

Please contact us if you would like more information about controlling workers’ compensation insurance costs.

Additional information is also available in our weekly Risk Management Newsletters.

Did You Remember to Insure the Business Part of Your Home-Based Business?

They say home is where the heart is or where you hang your hat. According to the U.S. Census Bureau, it’s also where many of us work and run our businesses. People work very hard to make their home-based business a success, but for some reason (the comforts of home?), many overlook the fact that their home-based business is actually a business. This is particularly true when it comes to insurance.

A survey conducted by the Independent Insurance Agents & Brokers of America found that nearly 60 percent of home-based businesses did not have business insurance coverage. Nearly 40 percent thought their business was covered by their non-business insurance. Nearly 30 percent believed their business was too small to insure. As a result, these home-based businesses were vulnerable to potentially substantial uninsured losses.

Owners of home-based businesses often assume that the insurance covering their home will also cover their business. This isn’t true. Standard homeowners’ insurance policies are not designed to cover the risks of operating a business. They typically have business-related exclusions and limitations that leave home-based businesses with little, if any, protection.

For example, standard homeowners’ policy often cover property used primarily for business purposes, but the amount of coverage is very low, typically $2,500. Take a minute to calculate how much your business property costs. Is $2,500 enough to cover everything? Probably not.

An even bigger risk is the liability exposure created by home-based businesses. What happens if a client falls in your home or if someone is injured by the product or service you provide? Standard homeowners’ policies have exclusions for business-related activities, so there would be no coverage for what could potentially be substantial liability.

Owners of home-based businesses cannot rely on non-business insurance, like their homeowners’ or personal automobile insurance, for protection. Business risks require business insurance. Though insurance needs usually depend on business operations, there a few types of coverage that most home-based businesses need, including:

Property: Protects the value of business property from loss due to various perils, like theft and fire. Limits must be sufficient to cover all business property.

General Liability: Protects against third-party claims for personal injury and property damage arising out of business operations. Products liability coverage is necessary if goods are manufactured or sold.

Commercial Auto : Protects against claims arising out of the use of a vehicle for business purposes. Depending on the operations, hired and non-owned coverage may also be necessary.

Professional Liability (Errors &Omissions): Protects professionals (attorneys, accountants, etc.) and quasi-professionals (real estate brokers, consultants, etc.) against claims that they erroneously performed or failed to perform their services .

Workers’ Compensation: Provides medical and lost wage benefits to employees injured on the job. State law typically dictates whether a business is required to carry workers’ compensation insurance.

Home-based businesses may need more specific types of insurance, like employment practices liability or cyber liability insurance. Insurance needs vary with business operations, so there isn’t a one-size-fits-all approach for insuring a home-based business. And, depending on the circumstances, coverage may be obtained by adding business-specific endorsements to a homeowners’ policy, by purchasing a Business Owners Policy (BOP) or by purchasing multiple stand-alone commercial policies.

The lack of uniformity and numerous options can make it difficult to identify and obtain the right insurance for a home-based business. An experienced insurance agent is usually needed to identify specific business risks and develop an effective yet cost efficient insurance program.

Please contact us if you have questions or would like more information about insuring your home-based business.

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Did I Just Expose Your Password?

Virtually every aspect of our personal and professional lives is password protected. Forgetting your password is like forgetting where you parked. You’re stuck. With so many passwords to remember, we try to make passwords easier to remember by taking shortcuts. Though some are clever, many are not. Either way, shortcuts can undermine the sole purpose of a password—security.

To hackers and identity thieves, accounts protected by weak passwords aren’t really password protected at all. Using a weak password may provide a sense of security, but it doesn’t provide any real security. It’s like hanging your spare key from the door knob. What’s the point of even having a lock?

If you think this is a bit extreme, judge for yourself. Look at SplashData’s Top 10 list of the most common passwords of 2015, which were identified by analyzing 2 million leaked passwords:

 

  • 123456
  • password
  • 12345678
  • qwerty
  • 12345
  • 123456789
  • football
  • 1234
  • 1234567
  • baseball

[Editor’s Note: We apologize to those who just had their passwords exposed. You know who you are. Since everyone has just seen your password, you should probably change it now.]

This list makes it easy to understand how passwords can be rendered virtually worthless by being weak. It’s absurd to think anyone is actually using these passwords. Unfortunately, it doesn’t look like people are changing their approach to passwords. The 2015 list is nearly identical to the 2014 list, though there were a few new additions, like welcome, login and starwars. Not exactly Fort Knox.

But wait, it gets even worse. People are actually using these passwords to protect information they would never want exposed. Not so much to the world, but to their spouse. That’s right, information about infidelity. After the Ashley Madison breach, millions of passwords were leaked. Here are the top 5 passwords people used to protect perhaps their most intimate secret:

  • 123456
  • 12345
  • password
  • DEFAULT
  • 123456789

Passwords are the first line of defense against unauthorized access to our personal and professional lives. The thing that makes passwords more memorable can also make them weak. Passwords must be strong to be effective. According to Microsoft, a strong password:

  • Is at least eight characters long.
  • Doesn’t contain your user name, real name or company name.
  • Doesn’t contain a complete word.
  • Is significantly different from previous passwords.
  • Contains uppercase and lowercase characters, numbers and symbols.

Cyber threats and data security remain a primary concern for individuals and businesses alike. Even the most sophisticated security measures are vulnerable to attack. Steps can be taken to reduce the risk of being victimized by hackers and identity thieves. The first one can be using strong passwords.

Please contact us if you would like to discuss ways to protect against data breaches and cyber security liability.

Additional information is also available in our weekly Risk Management Newsletters.

Does Your Business Need a USDOT or MC Number?

The Department of Transportation’s (DOT) Federal Motor Carrier Safety Administration (FMCSA) monitors and ensures compliance with motor carrier safety and commercial carrier regulations. Contrary to what many believe, 18-wheel trucks aren’t the only vehicles covered by FMCSA regulations. Depending on its operations, any business may be required to have a USDOT Number, an MC Number, or both.

USDOT Number

USDOT Numbers are unique identifiers used by the FMCSA when collecting and monitoring a company’s safety information, compliance reviews, crash investigations and inspections. A business involved in interstate commerce must have a USDOT Number if it owns a vehicle that:

  • Is used in transporting material found by the Secretary of Transportation to be hazardous and transported in a quantity requiring placarding (whether interstate or intrastate);
  • Has a gross vehicle weight rating or gross combination weight rating, or gross vehicle weight or gross combination weight, of 4,536 kg (10,001 pounds) or more, whichever is greater;
  • Is designed or used to transport more than 8 passengers (including the driver) for compensation; OR
  • Is designed or used to transport more than 15 passengers, including the driver, and is not used to transport passengers for compensation.

Interstate commerce means trade, traffic or transportation in the United States that is:

  • Between a place in a State and a place outside of such State (including a place outside of the United States);
  • Between two places in a State through another State or a place outside of the United States; OR
  • Between two places in a State as part of trade, traffic, or transportation originating or terminating outside the State or the United States.

In addition to FMCSA regulations, some states also require a USDOT Number to operate or register commercial motor vehicles, including Florida, Georgia, New Jersey and North Carolina.

MC Number (Operating Authority)

The FMCSA also issues various kinds of Operating Authority that dictate the type of operations a business may run and the cargo it may carry. This is known as an MC Number. Unlike USDOT numbers, which identify carriers operating in interstate commerce, MC Numbers identify carriers transporting regulated commodities for hire in interstate commerce.

An MC Number is generally required for businesses that:

  • Operate as for-hire carriers transporting goods or passengers for compensation;
  • Transport passengers in interstate commerce; or
  • Transport federally-regulated commodities or arranging for their transport, in interstate commerce.

Since there are different kinds of Operating Authority, a business may need more than one MC Number. And, different Operating Authorities may have different insurance requirements. For example, Motor Carriers of Passengers are required to have bodily injury and property damage insurance. The minimum required coverage is $5,000,000 if a company has any vehicles with a seating capacity of 16 or more passengers (including the driver); otherwise, the minimum required coverage is $1,500,000.

The FMCSA may impose penalties and assess fines for failing to have a required USDOT or MC Number. Businesses may face additional penalties in those states that have their own registration requirements. In Florida, for example, the failure to obtain a USDOT Number can result in a $500 fine.

Please contact us if you would like more information about complying with the various operating and insurance requirements governing your fleet or operations.

Additional information is also available in our weekly Risk Management Newsletters.

Using the Benefits of Representations and Warranties Insurance When Buying or Selling a Business

Deals to buy or sell a business typically include statements of fact by the seller about the business. These representations and warranties are then combined with indemnification provisions to allocate risks and liabilities between the parties. Negotiating representations and warranties can be challenging, and deals often fall apart because the parties cannot reach an agreement. Representations and Warranties Insurance (RWI) can simplify negotiations and possibly save the deal.

RWI protects against unintentional and unknown breaches of a seller’s contractual representations and warranties. Though RWI is not a new insurance product, it’s increasingly being used by both buyers and sellers to shift liability to insurers for a fixed cost.

These policies cover many of a seller’s standard representations and warranties, such as statements about:

  • Capitalization and debt;
  • Accuracy of financial statements;
  • Title to real, personal and intellectual property;
  • Tax matters;
  • Accounts receivable/payable and inventory;
  • Employee benefits and compensation; and
  • Compliance with laws and regulations.

 

In the past, RWI was typically reserved for buyers, but today RWI is used by both buyers and sellers. A ‘buy-side’ policy covers a buyer’s losses, including defense costs, due to the seller’s breach of a representation or warranty. A ‘sell-side’ policy covers the seller for defense costs and losses resulting from claims made by the buyer that the seller breached a representation or warranty.

Sellers can use RWI to:

  • Reduce potential liability for future representation and warranty claims;
  • Lock in their return on investment;
  • Cleanly exit a business or industry;
  • Eliminate the need for purchase price escrows or holdbacks;
  • Retain, use or distribute all or most of the sale proceeds;
  • Protect passive sellers; or
  • Expedite a sale.

 

Buyers can use RWI to:

  • Ensure a source of recovery for the seller’s breach of representations and warranties;
  • Ease concerns created by a sellers’ poor financial condition or other practical considerations that can make it difficult to collect from the seller in the event of a breach, such as sellers that are numerous, geographically dispersed or difficult to locate;
  • Distinguish its bid and appear more attractive to a seller;
  • Provide additional time to detect and report problems by extending the duration of a seller’s representations and warranties; or
  • Protect relationships with sellers who may continue working with buyer after the sale as a key employee or business partner.

 

Unlike standard general liability and property insurance policies, RWI coverages and exclusions can be relatively complex and can also vary depending on the specific policy form and insurance company. You should consult a reputable insurance agent with experience handling RWI applications and policies.

Please contact us if you would like more information about obtaining Representations and Warranties Insurance coverage.

Additional information is also available in our weekly Risk Management Newsletters.

Business Insurance 101

Insurance is an essential part of running a successful business. Though you don’t have to be an insurance expert, a general understanding of the following business policies and coverages can help identify and fill potential coverage gaps. It can also make you a more informed and better equipped consumer when the time comes to renew your insurance.

Property Insurance

Standard commercial property insurance covers loss or damage to buildings and structures caused by covered perils, such as theft, vandalism and fire. It also covers business property (contents), such as office furnishings, inventory, materials and computers. This coverage can help pay the costs of repairing or replacing property that is damaged or lost due to a covered event.

Since a property loss is likely to force a temporary suspension of operations, businesses should consider adding business interruption (business income) coverage. In the event of a covered loss, business interruption insurance will cover lost revenue and fixed expenses, like rent and utilities, during the suspension of operations. Extra expense coverage is also available to reimburse costs over and above normal operating expenses, like temporary relocation costs.

General Liability Insurance

Every business is vulnerable to claims of harm or damage brought by third parties. Standard commercial general liability insurance protects against liability claims for bodily injury and property damage occurring on the premises or arising out of business operations. Standard policies also cover personal and advertising injury, such as libel, slander and false arrest, and provide limited medical payments coverage for injuries sustained by non-employees.

Professional Liability Insurance

Businesses providing professional services requiring extensive technical knowledge or training must meet minimum standards of professional conduct. However, professional services, like those performed by doctors, lawyers, accountants, architects and engineers, are generally not covered under a standard general liability policy. Professional liability (errors and omissions) insurance is needed to protect against claims that a professional erroneously performed or failed to perform its professional services.

Commercial Automobile Insurance

Many assume that commercial automobile insurance is only necessary if a business owns one or more vehicles. However, if cars, trucks, vans or other vehicles are used or rented for business purposes, or if employees run business errands in their personal cars, commercial automobile insurance, including coverage for hired and non-owned vehicles, is needed to cover bodily injury or property damage resulting from an accident.

Workers Compensation Insurance

Whether a business is required to carry workers’ compensation insurance is typically determined by state law. In Florida, for example, a business in the non-construction industry that employs four or more part-time or full-time employees must obtain workers’ compensation coverage to provide medical and lost wage benefits to employees injured on the job. Even though some states, like Florida, set the premium for workers’ compensation insurance, a business can reduce its rates by maintaining a safe workplace or implementing a qualifying drug-free workplace program.

Flood Insurance

The average commercial flood claim is nearly $90,000, which may explain why approximately 25% of businesses never reopen after a flood. Damage caused by rising flood waters isn’t covered under standard property policies. A separate flood insurance policy is needed to cover direct physical loss to buildings and contents caused by an excess of water on land that normally is dry.

Employment Practices Liability Insurance

In 2014, the Equal Employment Opportunity Commission received 88,778 charges of unlawful discrimination. Unfortunately, employment-related lawsuits are becoming significantly more expensive to defend and resolve. Employment practices liability insurance is needed to protect against claims of discrimination, wrongful termination, harassment and other employment-related issues, like breach of contract.

Umbrella Insurance

An umbrella policy is designed to protect against an unusually high loss by providing coverage over and above other liability insurance policies. In addition to providing excess coverage limits, an umbrella policy can step in after the aggregate limit of an underlying policy is exhausted by the payment of claims. Umbrellas may also cover claims that are not covered by underlying policies.

If you have any questions or would like to learn more about insuring a business, please contact us.

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