TruGlossary 2018-04-26T15:52:15+00:00

TruGlossary

Property

Property insurance provides coverage for your business in the event of a “covered cause of loss” such as a fire, damage from a windstorm, falling objects, or non-business vehicles.

Generally, a property policy will cover:

Building

This covers your buildings and structures listed on the policy as well as any permanently installed fixtures, machinery, or equipment.

Business Personal Property (BPP)

This covers your stock/inventory, furniture, fixtures, and equipment.

Business Income and Extra Expense

When there is a covered loss that is serious enough that your business is unable to operate, this pays you for any loss of income your business sustains, continuing expenses, payroll that you want to keep on, and possibly any additional expenses you may incur as a result of the loss.

There are many different property policy forms out there that can be customized so that you’re getting the coverages that are important to you – and not paying for ones that you don’t need!

NOTE: Not every policy is the same. The previous description is intended for general education purposes only. In order to confirm what your policy does or doesn’t cover, review your policy or give us a call at 480-398-8297 for a free policy consultation.

Inland Marine

Inland Marine policies (sometimes referred to as Equipment Floaters) will protect your property when it’s located somewhere other than a location scheduled on your property policy.

Coverage is generally broader than a regular property policy. Examples of what should be covered on an Inland Marine policy:

  • Rental equipment
  • Contractors equipment
  • Any other equipment that is easily moved or intended to be in motion

There are many different Inland Marine policy forms out there that can be customized so that you’re getting the coverages that are important to you – and not paying for ones that you don’t need!

NOTE: Not every policy is the same. The previous description is intended for general education purposes only. In order to confirm what your policy does or doesn’t cover, review your policy or give us a call at 480-398-8297 for a free policy consultation.

Crime

Crime policies protect your business from the theft of money and securities and various other criminal acts. Various parts of a Crime policy could include:

  • Employee dishonesty (covers theft of anything by an employee)
  • Forgery Theft of Money & Securities inside or outside the premises
  • Funds Transfer Fraud

There are many different Crime policy forms out there that can be customized so that you’re getting the coverages that are important to you – and not paying for ones that you don’t need!

NOTE: Not every policy is the same. The previous description is intended for general education purposes only. In order to confirm what your policy does or doesn’t cover, review your policy or give us a call at 480-398-8297 for a free policy consultation.

General Liability

General Liability policies will protect your business when you get sued for negligence that resulted in bodily injury or property damage.

In most cases, damages and defense costs are paid by the insurance carrier when a loss occurs.

There are many different property policy forms out there that can be customized so that you’re getting the coverages that are important to you – and not paying for ones that you don’t need!

NOTE: Not every policy is the same. The previous description is intended for general education purposes only. In order to confirm what your policy does or doesn’t cover, review your policy or give us a call at 480-398-8297 for a free policy consultation.

Commercial Auto

Commercial Auto (sometimes called Business Auto) policies cover the exposures that your business has from owning and/or operating autos.

Auto policies generally have 2 different types of coverage:

Auto Liability

  • Covers your business for bodily injury or property damage to a 3rd party
  • Required to have by law

Physical Damage

  • Covers your business for damage done to your vehicles as a result of things like: collision, theft, fire, vandalism, and more
  • Generally not required to have this coverage by law, but lending institutions or leasing companies will usually require that you carry this

Some other important things to look at within an auto policy: Hired & Non-Owned coverage, Uninsured & Underinsured Motorist, and Medical Payments.

There are many different auto policy forms out there that can be customized so that you’re getting the coverages that are important to you – and not paying for ones that you don’t need!

NOTE: Not every policy is the same. The previous description is intended for general education purposes only. In order to confirm what your policy does or doesn’t cover, review your policy or give us a call at 480-398-8297 for a free policy consultation.

Business Owners Policy (BOP)

Buying a BOP policy is like buying the combo meal at your favorite fast food restaurant. It combines property and liability into one simple policy. Not every business will qualify for a BOP, but a BOP policy can be a good, cost-effective option for small to medium sized businesses that are in lower risk classes of business.

BOP policies can come with some very small amounts of other types of coverage “built-in for free” that you would normally have purchased separately. Those might include various Crime coverages, Cyber Liability, or Employment Practices Liability.

Consider these “built-in for free” coverages carefully, though! If they’re free, then it’s probably not enough coverage if you really need it. If any of those “built-in” coverages are ones that are important to your business, you should buy them separately where the coverages are going to be more appropriate for your needs.

NOTE: Not every policy is the same. The previous description is intended for general education purposes only. In order to confirm what your policy does or doesn’t cover, review your policy or give us a call at 480-398-8297 for a free policy consultation.

Workers’ Compensation

Workers’ Compensation is required by law in most states and provides coverage for your employees if they are hurt while working.

Workers’ Compensation policies have 3 parts:

Part A – Workers’ Compensation (Your State’s)

  • Simply put, the policy provides payments for things like wages and reimbursement of medical expenses to employees that are sick or injured while working
  • Employee waives their right to litigate against the employer for pain and suffering in exchange for not being forced to prove that Employer was negligent.

Part B – Employers’ Liability

  • Provides protection for Employer if Employee sues due to Employer negligence
  • Generally, an employee has to choose to collect for their injuries via Part A or Part B, but not both

Part C – Other States’

  • Since Workers’ Compensation is run on a State-by-State basis, Part C provides the applicable state Work Comp benefits for an employee that is hurt in a state where your business doesn’t have on-going operations

As a business owner, you have more control over the cost of your Workers’ Compensation policy than you do any other policy that you buy. This is because of the Experience Modification (also known as your X-Mod or E-Mod), which acts as a multiplier that can increase or decrease your premium significantly. This multiplier is determined by whatever rating bureau your state uses and is calculated by how often your business has had claims and how severe those claims have been in relation to other similar businesses in your state.

Regardless of what insurance carrier or insurance agency you choose to write your insurance, your X-mod will remain the same.

NOTE: Not every policy is the same. The previous description is intended for general education purposes only. In order to confirm what your policy does or doesn’t cover, review your policy or give us a call at 480-398-8297 for a free policy consultation.

Commercial Umbrella

A commercial umbrella policy provides your business protection against large, catastrophic liability claims when your underlying policies have been exhausted. An umbrella policy sits on top of all 3 of your “underlying” policies, which are: General Liability, Commercial Auto, and Employers’ Liability.

In order for your umbrella to respond appropriately, you must carry specific limits on your Underlying Policies.

Those minimum limits are typically:

  • $1M/$2M for General Liability
  • $1M for Auto
  • $500,000 for Employers’ Liability

In today’s legal climate, it’s extremely risky for your business to not have some type of umbrella in place.

NOTE: Not every policy is the same. The previous description is intended for general education purposes only. In order to confirm what your policy does or doesn’t cover, review your policy or give us a call at 480-398-8297 for a free policy consultation.

Specialty Property

When one of your business’s greatest exposures is a catastrophic event – like an earthquake or hurricane – your property policy won’t cover that exposure or will use a prohibitive deductible if they are willing to cover it.

In this case, you should look into purchasing a property policy specifically for that exposure. If you’re in California, you might want to consider a separate policy that covers your property against any losses as a result of an Earthquake. If you’re on the Gulf Coast, you might need to look for a policy that specifically covers Wind and Hail.

When considering these coverages, it’s important to make sure that your regular Property policy isn’t covering those items. If they are covering those exposures appropriately, then you likely won’t have a need for this.

Once you receive a quote for these types of coverages, it’s important to consider how the deductible works as it’s usually a percentage of the Total Insured Value and not a flat dollar amount.

NOTE: Not every policy is the same. The previous description is intended for general education purposes only. In order to confirm what your policy does or doesn’t cover, review your policy or give us a call at 480-398-8297 for a free policy consultation.

Flood

Flood is a peril that is not covered by your Property policy. It must be purchased through the National Flood Insurance Program (NFIP).

The rates are regulated through the NFIP and should not change from carrier to carrier.

A flood as defined by FEMA.gov is:

  • “A general and temporary condition of partial or complete inundation of 2 or more acres of normally dry land area or of 2 or more properties (at least 1 of which is the policyholder’s property) from:
    • Overflow of inland or tidal waters or
    • Unusual and rapid accumulation or runoff of surface waters from any source or
    • Mudflow or
  • Collapse or subsidence of land along the shore of a lake or similar body of water as a result of erosion or undermining caused by waves or currents of water exceeding anticipated cyclical levels that result in a flood as defined above.” (Source: https://www.fe ma.gov/national-flood-insurance-program/definitions#F)

Though you must purchase flood insurance from NFIP, the coverage provided in those policies are very frequently not nearly adequate to protect all of your business assets. While many times business owners’ purchase flood insurance to satisfy a lender requirement, your exposure to flood is very likely much greater than you think. The definition listed above is very broad. In order to make sure that your business is protected from the peril of flood at a level that makes you feel comfortable, you have the option of purchasing Excess Flood outside of NFIP.

NOTE: Not every policy is the same. The previous description is intended for general education purposes only. In order to confirm what your policy does or doesn’t cover, review your policy or give us a call at 480-398-8297 for a free policy consultation.

Professional Liability

Professional Liability policies protect your business from claims arising out of professional negligence. Generally, these policies cover economic losses or damages to a 3rd party, as opposed to bodily injury and property damage covered in a General Liability policy. There are many different professional liability policies available depending on the type of business that you’re in. Two of the most common are:

Employment Practices Liability (EPLI)

Employment Practices Liability, or EPLI, provides coverage including defense costs for your business in the event an employee brings suit for an employment-related practice, such as: discrimination, wrongful termination, harassment, or failure to promote.

Directors & Officers (D&O)

Directors & Officers Liability, or D&O, provides coverage to the directors & officers of an organization for claims regarding negligence, misleading statements, or misrepresentation. Most General Liability policies will cover a director or officer if there is bodily injury or property damage, but excludes acts that don’t cause any bodily injury or property damage.

There are many other types of Professional Liability policies. Some other policy types are: Errors & Omissions (E&O), Fiduciary Liability, and Medical Malpractice.

Given the legal climate we currently face, if your business simply has employees, directors, or officers, you have exposure in these areas.

NOTE: Not every policy is the same. The previous description is intended for general education purposes only. In order to confirm what your policy does or doesn’t cover, review your policy or give us a call at 480-398-8297 for a free policy consultation.

Cyber Liability

Cyber Liability or Data Breach policies protect your business from damages you incur as a result of a cyber attack or unauthorized access of your computer system, which could include your company’s servers, laptops, desktop computers, POS Purchase systems, and even mobile devices.

Almost every state has their own laws that require you to do certain things in the event of a breach. Some of the things laws generally require are providing credit monitoring for those effected, public notification of the breach, and hefty fines. Additionally, these exposures open your business up to lawsuits.

Cyber Liability and Data Breach policies are relatively new to the insurance marketplace. The terms and conditions offered in these types of policies attempt to keep up with the rapidly changing cyber exposures.

In general, Cyber Liability and Data Breach policies should provide coverage for your business to pay for any expenses you incur as a result of the actions you’re legally required to take, defense costs, judgements entered against you, and possibly even fines.

NOTE: Not every policy is the same. The previous description is intended for general education purposes only. In order to confirm what your policy does or doesn’t cover, review your policy or give us a call at 480-398-8297 for a free policy consultation.

Bonds

Bonds are a 3rd party contract that protects an entity and pays losses in the event of a criminal act or the failure to perform a specific act.

Fidelity Bonds

The most common type of a fidelity bond for small businesses is an ERISA bond, which is required by ERISA law to ensure an employee benefit plan against losses due to fraud or dishonesty

Performance Bonds

A performance bond guarantees that a 3rd party (usually a contractor) performs the work in accordance with the contract. The bond protects the owner of the project in the event the contractor fails to fulfill their contractual obligations.