The Basics of Business Insurance
Choosing the right commercial insurance plan for your business can be a challenge. We have developed many different options and programs to meet the needs of our commercial insurance clients, no matter the business. Helping you find the right solution for your business requires a personal touch, not a generic one-size-fits-all strategy.
General Liability Insurance
It only takes one claim to financially cripple your business, so it's important that you have adequate coverage from a highly rated carrier.
At its core, General Liability Insurance (a.k.a. Commercial General Liability or CGL) is the most basic form of commercial liability coverage. If you own a business, having General Liability coverage is not optional—it's mandatory.
What Does General Liability Insurance Cover?
Business is inherently risky, but General Liability Insurance protects against many known and unknown risks.
Simply put, CGL guards you, your business, and your employees from claims involving bodily injury or property damage born out of your business operations. These policies cover the expenses of out-of-court settlements, litigation, and judgments awarded by courts. Oftentimes, CGL is paired with Business Personal Property (BPP) coverage in a Business Owners Policy (BOP).
Here are a few things you can expect General Liability Insurance to cover:
- Lawsuits, investigations, and settlements.
- Injury damages.
- Advertising/copyright claims.
What's Involved in Getting CGL Insurance?
With any type of insurance, there are certain underwriting and eligibility questions that must be answered for the insurance company to determine what the final rating will be.
Many times, companies will require you to show them a certificate of insurance before you can do work for them. This proves to them that you have active insurance coverage, which is a requirement for running a business in most states.
Depending on the type of business you own, you may need specialized insurance for your industry. Breweries, auto mechanics, and building contractors all require specialized coverage.
Commercial Package Policy vs. Business Owners Policy (BOP)
Think of a Commercial Package Policy as a stereo system for which you buy each component individually. You can buy the receiver, speakers, remote, and every other part and accessory separately, but they all fit together to produce that great sound you've been looking for.
In contrast, a BOP is much like a stereo-in-a-box. All the pieces you need come prepackaged to help protect against the risks that most commonly affect mom-and-pop shops across the country.
A BOP can be broken down into two main sections: property and liability. If this sounds familiar, then yeah, it is exactly like the policy on your house. There are a few differences, so let's get down to it.
The property coverage of a BOP covers your business stuff, whether that be the building you own, the office equipment you use, the computers you process payments or design rad new fonts with (that's a thing, right?), or even the chair you're sitting in as you read this—if it's your work chair. If your business owns it, the BOP covers it. EXCEPT for cars, planes, boats, anything you can get in and drive around in. A BOP doesn't really do those, leaving them to other policies for coverage. Also, a BOP doesn't cover what is IN your computers (i.e., the data).
Another major difference is the special business protection under a BOP's property section, which can be broken into two parts. One of these is Business Income Coverage, which helps you make up for any income lost when your business is closed due to a covered loss. The other is Extra Expense Coverage, which can cover extra expenses to help you stay open after a covered loss.
Both are aimed at helping your business stay afloat after a property loss that would otherwise put you out of commission, whether that be a fire in your building or someone stealing a laptop that contains your entire design company within its shiny body. While the work required to recover from this loss wouldn't be covered, the income that would have kept you in business would be taken care of by your BOP.
Business Insurance is just another piece to the puzzle of running a business. Like other insurance, it is an expense that isn’t fun to pay but is necessary to ensure you are protected in case something unexpected happens.