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:: HOME :: CREDIT CARDS :: LONG DISTANCE :: INTERNET SERVICE :: LOANS :: CELL PHONES :: INSURANCE · Main Page · Auto Insurance · Health Insurance · Life Insurance · Home Insurance · Business Insurance  Compare Quotes Tips and Advice· Other Insurance · Info & Resources :: ONLINE BANKING :: KNOWLEDGE :: MORE |
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Business Insurance Tips and Advice Center Topic: Business Insurance Terminology See the subtopics menu for definitions of and explanations about common business insurance terms. For additional information about small business insurance, see the topic list directly below.
 Property Insurance for BusinessesWhat types of property insurance do businesses need? Business property insurance is an important type of commercial business insurance, as it covers losses of any buildings owned or leased by a company, as well as the contents of those buildings (such as furniture, supplies, machinery, computers and other equipment, or records and valuable documents). In the event that a building or its contents are lost or damaged, the insurance company will pay the business for those losses. Most property insurance policies cover events like a fire or storm, but not damage caused by flood, earthquakes, or terrorism. Special coverage is available to cover those risks. Flood damage is especially important to consider if a property is located in a flood zone. Businesses can get more information about flood insurance, and special government programs, through The National Flood Insurance Program. Coverage for earthquake damage is excluded from most business property insurance quotes and policies. Businesses located in earthquake prone areas need a special insurance policy or a commercial property earthquake endorsement added to their existing commercial business insurance policy. Crime insurance is another type of property insurance businesses should consider. Commercial property policies typically do not cover the loss of money or securities, or theft of any types of property. Crime insurance policies cover these losses. Business property insurance is a standard type of insurance for most businesses. For small or medium sized businesses, it often comes as part of a Businessowners Policy, which is a package of property and liability coverage. ^ Back to top Small Business Insurance NeedsWhat type of coverage do small businesses need? Like larger businesses, small businesses typically require both business property insurance and small business liability insurance. Small business property insurance covers physical property such as real estate, fixtures, office supplies, equipment, computers, and other machinery. Liability insurance for small businesses protects businesses against a variety of risks, including injuries that occur on the business premises or are caused by the business' product, and usually pays for medical and court expenses associated with the claim. Additional liability insurance is available for businesses who sell items through the Internet or who have electronic records. This insurance covers the businesses for losses of electronic data, whether that is from theft or another cause. For most small businesses, a Businessowners Policy tailored to the proper industry is the most cost effective way to purchase business insurance. Getting quotes on a package insurance policy like this allows businesses to compare the offerings of insurance companies. Insurance coverage for small businesses differs for businesses in different industries, so it's important to get small business insurance quotes from an agent or broker who understands the business and the industry. For example, a construction company will require specific insurance for movable construction equipment; an online business will need protection from malicious attacks and loss of customer data; and a food service business will need protection for food contamination. ^ Back to top Business Liability InsuranceWhat kind of liability insurance does a business need? There are two kinds of business liability insurance, which is insurance designed to protect companies against any harm caused to others. Standard liability insurance provides coverage for harm caused by something that a business does, or doesn't do, in the operations of the businesses. This can include things like injury to others, property damage caused by a company or its employees' action, or errors in the service provided. Professional liability insurance, also called errors and omissions insurance, is a special type of business liability insurance, and is not typically included in a business insurance quote from an agent or broker. However, it's an important coverage for many professional who operate a business. Professionals such as architects or consultants are expected to be experts and to perform up the standard of their profession. These professionals can be held liable if their actions or inactions cause harm to a person or business. Professional liability insurance pays for any financial losses if a client sues the professional. For most small- to mid-sized businesses, a Businessowners Policy tailored to the proper industry is the most cost effective way to purchase business liability insurance, in a bundle with property insurance. Getting a business insurance quote on a package insurance policy like this allows businesses to compare the offerings of insurance companies. ^ Back to top Workers Compensation InsuranceWhat is workers compensation insurance? Workers compensation insurance protects both the company and its employees. Companies are responsible for maintaining a safe workplace, but accidents still happen. Almost every state requires that businesses with a minimum of three to five employees (it's different for each state) have workers compensation insurance. If an employee is hurt in the workplace or while working, even offsite, or becomes ill with a work-related sickness, workers compensation insurance provides the employee with costs for medical care and compensation for lost income; or death benefits to surviving family members. Workers compensation insurance pays the employee for these expenses, no matter who was at fault for the injury or illness. The insurance is also set up to protect the company. If an employee sues the company as a result of a work-related injury or illness, the insurance policy pays for the medical expenses, wages, and any legal expenses that may occur. Workers compensation is the only insurance that automatically includes terrorism coverage. It covers injuries and deaths that occur in the workplace, or while working, that are caused by acts of terrorism. A workers compensation insurance policy is separate from any other commercial business insurance and is not included in any package insurance policies. ^ Back to top Business Interruption InsuranceWhat does business interruption insurance cover? Business interruption insurance is a critical coverage for businesses of all sizes. If there is a disaster or other event that prevents a business from using its premises, or from operating and producing income, this insurance covers lost income and helps the business continue to operate. This is an especially important small business insurance coverage, as small businesses may have less insurance coverage in general or a harder time managing and reopening after a fire or disaster. Business interruption insurance is only sold as part of a package insurance policy. Some small and medium sized businesses can get business interruption insurance as part of a Businessowners Policy that also includes property and liability insurance. It is also available as an addition to business property insurance policies. Business interruption insurance coverage compensates businesses for lost income, profits that would have been earned if the disaster hadn't occurred, and even expenses like utilities that may still need to be paid. It is important to note that this insurance only pays for losses due to damage covered under the business property insurance policy. The insurance policy will not pay if the business is forced from the premises by, or is unable to operate because of, a flood, act of terrorism, or earthquake, if the business does not have supplemental insurance coverage for those events. ^ Back to top Employment Liability InsuranceWhat is employment practices liability insurance? Employment practices liability insurance protects businesses from lawsuits by employees who claim that their legal rights as employees have been violated. Employees file lawsuits against companies primarily claiming that they have been victims of discrimination, sexual harassment, or wrongful termination. However, employment practices liability insurance also protects against claims for things such as emotional distress, lost career opportunity, or failure to promote. This type of insurance is not covered by standard business liability insurance. It must be purchased as a separate policy. For small and mid-sized businesses with employees, this insurance can be purchased as an addition to a Businessowners Policy. The amount of coverage a company receives is based on the type of business and industry it operates in, how many employees a company has, and if the company has had trouble with employee practices in the past, which is also laid out in business insurance quotes. In the event of a lawsuit, the company is reimbursed for the legal costs of the lawsuit, whatever the outcome or who is at fault. The policy also pays costs associated with any settlements or judgments. This insurance does not, however, pay punitive damages, or any civil or criminal fines associated with the lawsuit. Nor does the insurance pay for any liabilities covered by other insurance policies, such as workers compensation. ^ Back to top
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