Being a business owners is hard enough, but understanding your insurance needs can get really complicated. You probably have many questions ranging from “What does a business owners policy cover?” to “What is employment practices liability insurance (EPLI)?”. Well, we don’t claim to have all of the answers, but we do have some of them.
At Gilmartin Insurance Agency we have markets for all of the following types of business and many more:
A
Accounting Firms
Advertising Office
Air Conditioning Contractor
Animal Hospital
Appliances – Sales & Service
Appraiser’s Office
Architect’s Office
Arts & Crafts Store – Including Classes
Attorney/Lawyer/Legal Research Office
Auto Glass Installation or Repair
Auto Repair Shops
Automobile Dealers
Automotive Parts & Accessories
B
Baskets
Beauty Salons – Barber Shops
Bed & Bath Store
Beverage Distributor
Bicycle Shop
Bookkeeping
Book & Magazine Stores
Bridal Shop – Including Alterations
Builders’ Risk Coverage
Building Equipment – Installation, Erection, Repair
Building Materials Dealer – Not Lumber Yards
C
Cabinet Work Mfg.
Cable TV Installation
Camera, Photo Equipment, & Precision Instruments
Candy or Confectionery Stores
Car Wash
Career/Vocational Consulting
Carpentry Contractor
Carpentry Shop
Carpet, Rug, Furniture, or Upholstery Cleaning
Carpet, Rug & Floor Covering Sales
Carpentry – Framing & Cabinet Work – No Roofing
Carpentry – General Remodeling – Limited Roofing
Carpentry – NOC – General Remodeling
Carpentry – Primarily Inside
Carpentry – Primarily Outside
Carpentry – Shop Only
Caterer
Ceiling/Wall Panel Installation
Cement / Concrete Finishing
Cemetery
China, Glass & Earthenware
Church/House of Worship
Cleaning Supply Store
Clothing Store – Mens, Ladies & Children
Clubs – Civic, Service or Social
Coffee Shop
Commercial Auto*
Computer Cable or Coaxial Installation
Computer Consulting Service
Computer Sales & Service
Computer Software Development
Computer Software Sales
Concrete/Plaster Products Mfg.
Concrete Construction
Condominium Association
Court Reporting or Stenography Service
D
Daycare Centers
Deli
Dental Laboratory
Dentist’s Office
Desktop Publishing
Doctor’s Office
Draftsmen
Drapery Store
Drug Store/Pharmacy
Dry Cleaning Operation
Dry Goods Store
Drywall/Wallboard Installation
E
Educational Consultant
Electronic Component Mfg.
Electrical Contractors
Electronics – TV, VCR & Stereos
Employment Agency
Engineer’s Office
Excavation
Eye Glass Mfg. Including Incidental Frames
F
Fabric Store
Fence Erection only
Fence Sales & Erection
Floor Covering Stores, Distributors or Installation Including Tile, Stone, Marble, Mosaic or Terrazzo
Florists
Formal Wear/Tuxedo Shop
Framing/Carpentry
Funeral Homes
Furniture Mfg.
Furniture Store – Including House Furnishings & Installation
Furniture Stripping or Refinishing
G
Gardening & Light Farming Supplies
Gas Stations
Glaziers & Glass Shops
Gift Shops
Golf Courses Public/Country Clubs
Grading of Land
Grocery Stores
H
Habitational
Halls Rented to Others
Hardware Store
Hearing Aid Shop
Heating Contractor
Hobby & Model Shop
Hotel or Motel
Housewares
I
Ice Cream Store
Insurance Agency
Interior Decorating
Investment Services
L
Landscaping or Lawn Care
Laundry & Dry Cleaning Operations
Letter Service Shop, Mail Addressing, Mail Packaging
Locksmiths
Locks, Safes & Locksmith Equipment
Locksmiths – No Security System Installation
Lessors Risk – Multiple Occupancy & Mercantile with Apartments
Lessors Risk – Service, Mercantile & Offices
M
Machine Shops
Marriage/Family/Child/Individual Counselor
Market Research Agency
Masonry
Medical Information Office
Medical Offices
Mini/Self Storage Warehouse
Miniature Golf Courses
Mobile Home Connection/Installation
Mortgage Broker
Motel or Hotel
Motorcycle, ATV & Snowmobile Dealerships
Musical Compact Discs, Records, & Tapes
O
Office
Office Furniture & Supplies – Retail
Office Furniture & Supplies – Wholesale
Office Machine – Installation, Service or Repair
Office Machines or Appliances – Retail
Office Machines or Appliances – Retail / Repair
Office Machines or Appliances – Wholesale
Office Machines or Appliances – Wholesale / Repair
Optical Goods Mfg.
Optometrist, Optician or Optical Goods Store
P
Packaging & Mailing Center
Painting
Painting, Picture or Frame Stores
Paper Hanging
Parsonage/Rectory
Patio & Deck Furniture
Paving
Payroll Services
Pet Grooming
Pet Stores Includes Grooming, No Kennels, No Venomous or Dangerous Animals
Photo Finishing Lab
Photographer – Including Studio
Pizza Shop
Plastering Contractors
Plastic Products Mfg.
Plumbing Contractors
Print Shop
Pro-Shop – All Sports
Professional/Trade Association Office
Q
Quick Printing – Copying or Duplicating Service
R
Real Estate Agents
Remodeling/Carpentry
Repair Garage
Retail / Store
Restaurant
Rubber Goods Mfg.
S
Sandwich/Sub Shop
Satellite Dish Installation – No Roof Mounted Installation
Seamstress
Service Station
Sewing Machine Store Including Repair
Sheet Metal Work outside or shop only
Shoe Repair Shop (Including Shoe Shining)
Shoe Store
Siding Installation
Sign Painting/Lettering – Inside Buildings
Sign Painting/Lettering – On Buildings
Sign Painting & Erection
Sporting Goods – Retail
Sporting Goods – Wholesale
Stationary or Paper Products Stores
Stock Broker
Swimming Pool Installation
T
Tax Preparation
Tailor & Dress Making Shop
Telephone Systems Installation – No Pole Work
Textiles Silk Screening
Tile & Ceramic Dealers – No Installation
Tire Sales
Title Search Office
Tool & Die Shops
Travel Agency – No Tours
Trophy Stores
V
Vending Machine Operations
Veterinarian Office
Video Games
Video Sales & Rentals
W
Warehouse
Wholesale/Retail
Workers Compensation Exposures*
ACCOUNTS RECEIVABLE
Provides coverage for accounts which are uncollectable because of an insured loss to your records. ERIE’s payment will include expenses to reconstruct records, interest on temporary loans and extra collection expenses.
ACTUAL CASH VALUE
Loss settlement is based on the replacement cost of an item at the time of the loss, less depreciation.
ADVERTISING INJURY LIABILITY
Provides coverage for your liability arising from personal injury, violation of the right of privacy, infringement of copyright, title or slogan occurring as a result of your advertising activities.
AGGREGATE LIMIT OF LIABILITY
The maximum amount of insurance ERIE will pay for a series of losses in a given year.
AGREED VALUE
This endorsement suspends and replaces the coinsurance clause if the insured carries a limit of insurance equal to or greater than the agreed value. The replacement requirement is an agreement to cover any loss in the same proportion as the limit bears to the stated agreed value. For example, if the agreed value of an item is $250,000 and the limit is $250,000, then a loss is covered at 100%.
AUDIT
An annual examination of your financial books and records as they relate to this insurance to determine proper premium for the exposures.
AUTOMATIC ANNUAL ADJUSTMENT
To help assure you of an adequate amount of insurance for your buildings, ERIE will make an automatic annual adjustment to your building amount to reflect change in construction costs.
BAILEE’S CUSTOMER INSURANCE
Inland marine coverage that protects you from claims by your customers for damage to or destruction of customer property in the care, custody, or control from a peril insured against.
BASIC CAUSE OF LOSS
This coverage protects your building(s) and personal property or contents from loss caused by basic perils subject to certain exclusions. The basic perils include fire, lightning, explosion, windstorm or hail, smoke, aircraft and vehicles, riot or civil commotion, vandalism, sprinkler leakage, sinkhole collapse, and volcanic action.
BEST’S RATING
A rating system that indicates the operating condition of insurance companies developed and published annually by the A.M. Best Company.
BLANKET CONTRACTUAL LIABILITY
Protects you for liability assumed under “insured contracts” relating to your business whether they be oral or written, expressed or implied.
BLANKET COVERAGE
This coverage insures all property at a single amount. This eliminates having individual limits for each separate building or location.
BODILY INJURY LIABILITY
Provides coverage for your liability arising from physical harm, sickness, disease or death sustained by others. It includes care and loss of services and death at any time resulting from bodily injury.
BOILER AND MACHINERY COVERAGE
Provides coverage for claims arising from the operation of boilers and machinery. May cover loss suffered by the boilers and machinery or include damage done to other property and business interruption losses.
BRAND AND LABEL CLAUSE
This endorsement will reimburse you for costs when damage occurs to your property and it must be stamped as salvage or voided, or when your labels must be removed from the property items due to damage.
BROAD CAUSE OF LOSS
This coverage protects your building(s) and personal property or contents from loss caused by the broad form perils subject to certain exclusions. The broad form perils include fire, lightning, explosion, windstorm or hail, smoke, aircraft and vehicles, riot or civil commotion, vandalism, sprinkler leakage, sinkhole collapse, and volcanic action, breakage of glass, falling objects, weight of snow, ice, or sleet, water damage, and collapse.
BUILDERS’ RISK
This coverage insures the value of a building which is in the process of being built. The structure, materials, equipment and supplies kept within 100 feet are all covered under this policy. This coverage will be written on a comprehensive perils basis. Coverage limits are determined by the estimated completed value of the insured building.
BUILDING ORDINANCE
Provides coverage for:
- the value of the undamaged part of the building caused by enforcement of any ordinance or law regulating the construction or repair of buildings that require the demolition of parts of the undamaged building; or regulates the construction or repair of the building, etc.
- the increased cost of construction to repair, replace, or construct the building caused by enforcement of any ordinance or law regulating the construction, use or repair of buildings.
Insurance companies selling business insurance offer policies that combine protection from all major property and liability risks in one package. (They also sell coverages separately.) One package purchased by small and mid-sized businesses is the businessowners policy (BOP). Package policies are created for businesses that generally face the same kind and degree of risk. Larger companies might purchase a commercial package policy or customize their policies to meet the special risks they face.
BOPs include:
- Property insurance for buildings and contents owned by the company — there are two different forms, standard and special, which provides more comprehensive coverage.
- Business interruption insurance, which covers the loss of income resulting from a fire or other catastrophe that disrupts the operation of the business. It can also include the extra expense of operating out of a temporary location.
- Liability protection, which covers your company’s legal responsibility for the harm it may cause to others. This harm is a result of things that you and your employees do or fail to do in your business operations that may cause bodily injury or property damage due to defective products, faulty installations and errors in services provided.
BOPs do NOT cover professional liability, auto insurance, worker’s compensation or health and disability insurance. You’ll need separate insurance policies to cover professional services, vehicles and your employees.
Employers have a legal responsibility to their employees to make the workplace safe. However, accidents happen even when every reasonable safety measure has been taken. To protect employers from lawsuits resulting from workplace accidents and to provide medical care and compensation for lost income to employees hurt in workplace accidents, in almost every state, businesses are required to buy workers compensation insurance. Workers compensation insurance covers workers injured on the job, whether they’re hurt on the workplace premises or elsewhere, or in auto accidents while on business. It also covers work-related illnesses.
Workers compensation provides payments to injured workers, without regard to who was at fault in the accident, for time lost from work and for medical and rehabilitation services. It also provides death benefits to surviving spouses and dependents.
Each state has different laws governing the amount and duration of lost income benefits, the provision of medical and rehabilitation services and how the system is administered. For example, in most states there are regulations that cover whether the worker or employer can choose the doctor who treats the injuries and how disputes about benefits are resolved.
Workers compensation insurance must be bought as a separate policy. Although in-home business and businessowners policies (BOPs) are sold as package policies, they don’t include coverage for workers’ injuries.
As a businessowner, you need the same kinds of insurance coverages for the car you use in your business as you do for a car used for personal travel — liability, collision and comprehensive, medical payments (known as personal injury protection in some states) and coverage for uninsured motorists. In fact, many business people use the same vehicle for both business and pleasure. If the vehicle is owned by the business, make sure the name of the business appears on the policy as the “principal insured” rather than your name. This will avoid possible confusion in the event that you need to file a claim or a claim is filed against you.
Whether you need to buy a business auto insurance policy will depend on the kind of driving you do. A good insurance agent will ask you many details about how you use vehicles in your business, who will be driving them and whether employees, if you have them, are likely to be driving their own cars for your business.
While the major coverages are the same, a business auto policy differs from a personal auto policy in many technical respects. Ask your insurance agent to explain all the differences and options.
If you have a personal umbrella liability policy, there’s generally an exclusion for business-related liability. Make sure you have sufficient auto liability coverage.
Professionals that operate their own businesses need professional liability insurance in addition to an in-home business or businessowners policy. This protects them against financial losses from lawsuits filed against them by their clients.
Professionals are expected to have extensive technical knowledge or training in their particular area of expertise. They are also expected to perform the services for which they were hired, according to the standards of conduct in their profession. If they fail to use the degree of skill expected of them, they can be held responsible in a court of law for any harm they cause to another person or business. When liability is limited to acts of negligence, professional liability insurance may be called “errors and omissions” liability.
Professional liability insurance is a specialty coverage. Professional liability coverage is not provided under homeowners endorsements, in-home business policies or businessowners policies (BOPs).
EPLI covers businesses against claims by workers that their legal rights as employees of the company have been violated. The number of lawsuits filed by employees against their employers has been rising. While most suits are filed against large corporations, no company is immune to such lawsuits. Recognizing that smaller companies now need this kind of protection, some insurers provide this coverage as an endorsement to their Businessowners Policy (BOP). An endorsement changes the terms and conditions of the policy. Other companies offer EPLI as a stand-alone coverage.
EPLI provides protection against many kinds of employee lawsuits, including claims of:
- Sexual harassment
- Discrimination
- Wrongful termination
- Breach of employment contract
- Negligent evaluation
- Failure to employ or promote
- Wrongful discipline
- Deprivation of career opportunity
- Wrongful infliction of emotional distress
- Mismanagement of employee benefit plans
The cost of EPLI coverage depends on your type of business, the number of employees you have and various risk factors such as whether your company has been sued over employment practices in the past. The policies will reimburse your company against the costs of defending a lawsuit in court and for judgments and settlements. The policy covers legal costs, whether your company wins or loses the suit. Policies also typically do not pay for punitive damages or civil or criminal fines. Liabilities covered by other insurance policies such as workers compensation are excluded from EPLI policies.
To prevent employee lawsuits, educate your managers and employees so that you minimize problems in the first place:
- Create effective hiring and screening programs to avoid discrimination in hiring.
- Post corporate policies throughout the workplace and place them in employee handbooks so policies are clear to everyone.
- Show employees what steps to take if they are the object of sexual harassment or discrimination by a supervisor. Make sure supervisors know where the company stands on what behaviors are not permissible.
- Document everything that occurs and the steps your company is taking to prevent and solve employee disputes.
There are a number of ways to save money on your business insurance. We have provided a few general tips, but the best way to save is to call us for a policy review. We will look at your business and current policy to determine how we can best save you money.
- Shop around.
Prices vary from company to company, so it pays to shop around. Get the names of companies or brokers who specialize in your type of business. Call several so that you can compare prices and get a feel for the types of services they would provide. It’s also important to pick a company that is financially stable. Check the financial health of insurers with rating companies such as A.M. Best and Standard & Poor’s and consult consumer magazines. - Choose a higher deductible.
Deductibles represent the amount of money you pay before your insurance policy kicks in. The higher the deductible, the less you will pay for the policy. - Buy a package policy.
It can sometimes be cheaper to purchase a package policy, such as a Business Owners Policy (BOP), rather than individual coverages. A package policy provides standard coverages and limits of liability that are appropriate for typical small-to-medium-sized businesses. - Work closely with your agent or broker.
Your insurance professional can provide invaluable advice to help protect your business from unexpected disasters. But you need to keep him or her informed about any major changes in your business. This includes major purchases, expansions or changes in hiring or the nature of your operation. Also, get your agent’s advice in terms of disaster planning. Ask what you can do to both reduce risks like fire or work-related accidents, as well as the procedures that should be in place in case your business does suffer a major catastrophe.
Having the right coverage and a well thought out disaster plan can save you money in the long run. It may even save your business from going under. - Ask about ways to prevent losses.
You may be able to reduce your premium for certain coverages by following your insurer’s recommendations. These can include workplace safety, disaster preparation, and human resource intervention.