Frequently Asked Questions About Commercial Insurance
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At Rogue Risk, we help you “Win” the insurance game by focusing not just on the cost of insurance premiums, but your Total Cost of Risk.
Our proprietary process allows your business to cut costs and free up cash flow while maintaining the insurance coverages you need to sustain your business.
In most states, your business needs certain coverages, like workers’ compensation insurance and unemployment insurance, to operate. Liability insurance is also important because without it, you’d have to pay out of pocket for any legal claims filed against you.
Below are the most frequently asked questions we receive about commercial insurance.
There are many types of commercial insurance, including coverage for property damage, legal liability and employee-related risks. Below are a few of the most common types of commercial insurance. Get a full list of Business Insurance by Coverage.
- General Liability Insurance – can help protect you, your employees and customers in the case of an accident.
- Commercial Property Insurance – can help protect your company’s physical assets, such as your building, furniture, equipment and inventory. You can get commercial property coverage even if you work from home.
- Business Owners Policy, or BOP – is a combined package of different coverages, such as property, liability, crime coverage and more. A BOP can help you get a customized policy tailored to your specific needs.
- Commercial Auto Insurance – can protect your business and employees from a variety of damages and accidents related to the operation of vehicles.
- Business Income Insurance – can help pay bills and cover costs if your business has to close temporarily.
- Commercial Umbrella Insurance – can provide your business with extra protection beyond your standard liability policy.
- Cyber Liability Insurance – can help protect your business from damages related to electronic data, computer systems, data breaches and even computer attacks.
- Equipment Breakdown Insurance – can protect your business from damages and costs related to computers, electrical and mechanical equipment breakdowns.
- Business Interruption Insurance – can pay for lost income and help keep your business afloat if external forces cause you to close for a short time.
- Workers’ Compensation Insurance – can protect your employees in the instance of a work related accident.
Business insurance can help pay the costs of property damage, lawsuits, lost business income, and other covered losses. To help protect against specific risks unique to their situation, businesses often buy multiple coverages and combine several in one policy.
Among the most popular business policies is a Business Owner’s Policy (BOP). A BOP generally includes business property, general liability and business income coverages in one policy. Combining these coverages can help save you money and it’s convenient. Insurance helps protect from the cost of bodily injury or property damage claims against your business.
For example, a customer may make a claim against your business if he is injured in your store. General liability can help cover you against the costs of the claim and potential defense costs. It also helps protect your business from the costs of errors in your advertising.
Commercial property insurance is a key coverage for business owners, especially if you run a home-based business. Also known as business property insurance, this coverage provides more coverage than your homeowners insurance. It helps protect your business’ physical location and property, including your:
You can get this insurance through our Business Owner’s Policy (BOP) or as a standalone policy. If a covered loss damages your business’ physical assets, commercial property insurance can help cover your repair or replacement costs. This coverage can help your business if:
- A fire leaves your computers damaged or destroyed
- Lightning strikes the building you lease
- A fire causes damages that restrict you from opening
It also helps protect other business assets, such as your:
- Accounts receivables
- Lost income if you can’t operate because of a covered loss
You can add more protection to your policy for things like valuable papers and records. This can help cover your costs to:
- Reproduce important documents
- Provide temporary storage
- Move records to avoid a loss
You’ve invested in your small business. You’ve put energy and effort into getting it started and opening the doors. Protecting your investment is an important element in helping ensure you have a successful business.
Business insurance can help protect small business owners from property damage and liability claims. Running a business involves risks that are both expected and unexpected. There are different types of insurance that can help businesses.
Each type of business insurance helps protect you and your business in different ways. Whether it’s property damage, giving your employees benefits if they get sick or hurt from their job, or covering the costs to help your business recover from a data breach, The Hartford’s business insurance helps businesses prevail through the unexpected.
Your employee is driving a business car to make a delivery to a customer. On the way there, he ends up rear ending another car and causing significant damage. In addition to the physical damage, the other driver sustained injuries and has to be transported to the hospital.
A commercial auto insurance policy can help cover the property damage and medical costs from this accident. If you didn’t have coverage, your business would be responsible for covering the costs.If you or your employees use your own cars or company vehicles for business purposes, consider getting a commercial auto insurance policy.
It can help pay for the financial costs that result from an auto accident if you or an employee is found at fault – even in the event of a fatal accident. A commercial auto insurance policy can help protect small business owners and their employees in many ways. These include:
- Driving between different work locations
- Visiting existing or potential customers
- Driving employees around town
- Performing deliveries on behalf of the business
For business insurance, count on spending as much as 20 to 30 percent of gross sales as a general rule of thumb, for comprehensive coverage that includes primary business coverages and employee health and life insurance benefits.
But costs can vary widely depending on the types of coverage selected and a variety of risk factors specific to the particular business being insured. Business insurance can help pay the costs of damages claims against your business in the event of an accident.
Without the right type and amount of business insurance, you may need to pay those costs out of your own pocket. In most states, there are certain requirements for the types of business insurance a company must have.
For example, most states require businesses with employees to have Workers’ Compensation insurance. Most states require businesses with employees to purchase Workers’ Compensation insurance. If you or your employees will be driving for work purposes, you’ll probably need commercial auto insurance as well.
A general liability insurance policy may also be necessary as it helps cover the costs of property damage and injury claims caused by your business.
Commercial Insurance 101
Yes, every industry has its own package of coverages that have been developed by insurance carriers to address the unique needs of businesses in that industry. Many new business owners opt for what's known as a Business Owners Policy (BOP). However, a BOP is not available for every business class. In these cases, you will need a Package Policy put together by an independent insurance agent.
Additionally, there are sub-classes within each industry that have their own even more specific insurance coverages. An example of this would be landscaping businesses which have a sub-class of landscapers that also do tree removal. Landscapers with tree removal need different and additional coverages from standard landscaper operations.
A BOP or Business Owner's Policy is a package of coverages built specifically to cover the wide range of risks most businesses experience. However, there are typically three major coverages included in every BOP:
- Property damage. Similar to a homeowner's insurance policy, this covers damage to your building (owned or leased), equipment, furnishings, fixtures, displays and inventory.
- Business interruption. If a covered loss strikes your store or warehouse, forcing you to stop operating for a period of time, your revenue stream is protected from lost business income. You can also choose optional protection that covers you in case a major supplier is affected.
- Liability insurance for your business. Covers damages paid in judgments or settlements, and legal defense costs, if you are sued or held liable for accidental bodily injury or property damage arising from a covered cause of loss.
Businesses often need to carry more than one type of insurance, and your business' insurance needs may be highly individualized. A knowledgeable agent can help you find the right solutions. For some states, carrying insurance is a requirement. Requirements may also vary by the type of business you own and the number of employees; however, worker's compensation is required by law in most states, and highly recommended if not.
In addition to the BOP, you may need other types of small business insurance coverage based on the kind of work you do, the size of your company and your location. These could include:
- Insurance for home-based businesses. Even if you work from home, you'll still need to insure your business. Generally, homeowner's insurance offers the appropriate coverage level for home based business-related property and equipment.
- Professional liability insurance. This may be required as a separate policy, in addition to the BOP, to cover losses related to liability claims arising from mistakes or lapses of professional duties. Businesses offering professional services to their customers will often purchase this type of policy.
- Commercial auto insurance. Company-owned vehicles will need to be insured through a commercial auto policy.
- Health insurance. As a self-employed person, you may need to provide health insurance for yourself, your family and your employees.
- Cyber insurance. Internet-based businesses or businesses that store their records online may need additional cyber protection against the risk of data breaches and malicious computer intrusions.
- Commercial umbrella insurance. Provides liability coverage beyond the basic business insurance policy limits in the case of a catastrophic auto or business related event.
Commercial Insurance 201
If your business has employees then you are exposed for a loss related to employee practices. This isn’t just sexual harassment, it also includes unfair hiring/ firing practices, discrimination as well as unsafe work environment. Losses from a 3rd Party are also included. Did you know that If someone enters your business and harms your employee you can be sued by your employee? This is not covered under your general liability insurance.
Hired and non-owned auto liability insurance is a coverage found most often on business auto policies or the business owner policies (BOP). The coverage provides protection for the business in the event an employee gets into an at-fault auto accident while driving their own personal vehicle or any other vehicle not owned as well as a rented vehicle over the course of their work day.
Example: You send your assistant out for stamps at the post office. She runs a red light which in turn causes bodily injury. If the business is sued, hired and non-owned auto insurance coverage responds.
General Liability: This coverage protects against financial loss as the result of bodily injury, property damage, medical expenses, libel, slander, defending lawsuits, and settlement bonds or judgments.
Example: A woman walks into your brick and mortar and slips on a rug, breaks her hip and sues your business for medical damage.
Professional Liability: Protecting your business against bad advice or guidance. Any time you give professional opinion, advice or guidance you are opening yourself up to a professional liability claim.
For most small businesses, loss ratio has the most obvious effect on workers compensation insurance premiums. However, over time a business’ loss ratio for liability and property insurance claims can impact premiums as well.
The higher your loss ratio, the higher your insurance premiums are going to be. Understanding concepts such as these will help you lower business insurance premiums for your organization. Always consult your agent before you submit a claim.
Almost every business based in the US that has employees is required to have WC insurance. WC rates are based on employee classification (with regards to the type of work they perform). The premium rate itself is expressed in dollars and cents for every $100 of payroll to each class code.
There are 3 factors that will impact your WC rate:
- Size of employer’s payroll
- Employee Job Classification
- Company’s Claim Experience
- Experience Mod Factor
- Credits / Discounts
Insurance Service Questions
In a word, yes. Developing a strong professional relationship with an insurance agent will help you over the long term as your business grows. Choose to work with someone who understands the unique challenges of running a small business and takes time to understand your specific insurance needs. Your agent will help tailor your insurance policies to your company's needs and help make sure you're covered.
There are several things you can do to keep insurance expenses in check. Performing an annual risk assessment and identifying actions you can take to lower your insurance costs is the first step. Also, your agent can be a great resource to review your existing policies and deductibles, to make sure your coverage and limits are right-sized for your business. Lastly, if you purchase more than one insurance policy from the same agent, don't forget to ask if you qualify for a multi-policy discount.Example: You send your assistant out for stamps at the post office. She runs a red light which in turn causes bodily injury. If the business is sued, hired and non-owned auto insurance coverage responds.
Risk exists everywhere, and for many churches and not for profits, it may seem unavoidable. It’s often assumed that the cost of risk only involves the insurance premiums paid, retained losses and administrative costs. However, total cost of risk encompasses much more than that.
One way to discover all the risks facing your organization — including ones that might not be seen, considered or addressed — is to examine the total cost of risk (TCOR). TCOR is the total cost of the items that organizations are responsible for, such as insurance premiums, retained losses in the form of deductibles and uninsured losses, indirect cost of claims and administrative costs. Other factors include:
- Transaction costs
- Loss of reputation
- Additional training
- Claims reporting and investigation
Over time, an organization’s TCOR can provide a form of measurement for assessing how risk-related costs are changing relative to the overall growth rate of the church or not for profit.
If your business is the victim of theft or a fire, or if a pipe breaks in your store or office, you'll want to make sure to report the loss right away. This will help get your business back on track as quickly as possible. If your are a client of Rogue Risk and either have a claim related question or need to file a claim, click here.
The demands and opportunities your business faces are constantly shifting. The good news is that there are coverages available to adapt to your needs. As your business grows, offers new products or services, buys new equipment or develops new revenue streams, you may also take on new risks. It's a good idea to review whenever something significant changes, and at least once per year, to identify overlapping coverage or new areas of risk.
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