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Having the correct limits of insurance could save your financial life. You may think your business operation is safe however neighbouring exposures, weather, crime, fire and lawsuits are potential unforeseen claims waiting to happen. In the event of a claim, the insurance policy you carry should restore your business back to what it prior to the loss.
Determining your property limits - If your business suffered a catastrophe, how much would it cost to rebuild it? This includes the building (if owned or must be insured as per your lease), equipment, contents, stock and tenants Improvements.
Business Interruption Insurance – This coverage provides protection from indirect losses, such as profits loss or extra expenses that arise after a direct loss. This coverage is not sold on a standalone policy but can be added to a package insurance policy or comprehensive policy. Since business interruption insurance is part of the business primary policy (if purchased), it only pays out if the cause of the loss is covered by overarching policy.
The right deductible for you – How much can you comfortably absorb financially in the event of a claim? The higher the deductible, the more inexpensive the policy becomes. When obtaining a quote ask for a few options in deductible limits, than make an informed decision. If you purchased: Earthquake, Flood and Sewer Backup. These deductibles and coverage offered will differ by territory and insurance company. Ask your insurance advisor what options are available to you. Being with the right insurer could save you thousands of dollars.
The Extension Package – Most insurance policies have some sort of extension package. Some have a single package to offer, others range from basic to elite. These packages can further protect you in the event of a loss. A few usual components are: Crime, Signs, Property in Transit, Peak Season Stock Increase, etc. Ask your broker to explain this further.
Commercial General Liability (CGL), protects your business from financial loss should you be sued because of injuries, property damage or a fatality caused by your business operations, services, or your employee.
The CGL insurance policy will usually cover the costs of your legal defence and will pay on your behalf all damages if you are found liable, up to the limits of your policy. It is one of the most commonly sold insurance products, as lawsuits have been more frequent through time.
How to determine the right amount of coverage you should carry? Ask your broker to guide you; however it is ultimately your decision.
Types of Commercial General Liability Insurance. Standard CGL coverage is divided into five primary groups:
Bodily Injury / Property Damage - If your company, product, service, employees or anything associated with your business cause physical harm to someone, or damages to their property, the courts could find you legally liable.,/p>
Personal Injury Liability – protects yourself, your business and your employees: Against lawsuits that claim you or an employee said or did cause damage to the reputation and character of a third party. See your policy for a list of exclusions that pertain to your liability.
Advertising Injury – This relates to damages caused by slander, libel, privacy violations, copyright infringement and disparagement of goods products or services of other companies. As the title subtly suggests, the injury arises from your company performing some form of advertising or marketing activity.
Medical Expenses - This type of coverage is to pay for a third party’s minor expenses that arise from an accident on your companies premises, or as a result of your company’s operations.
Tenants Legal Liability – As a tenant if you cause property damage to the landlord’s property, you could be held legally responsible.
Non Owned Auto Liability - Non-Owned Auto Liability Insurance covers liability for accidents caused by an employee, a third party company or volunteer driving their own vehicle on an employer’s behalf. The coverage is designed to protect only the employer’s organization, not the employee or volunteer. Coverage applies above the liability limits of the vehicle owner’s automobile policy. There is no coverage for physical damage.
In closing, speak to an insurance professional about the right insurance package for your business.
Please note that all insurance companies, coverage and exclusions in packages will differ. Speak to your insurance broker and read your policy to know what you are covered for.
Michael Daou (R.I.B.O.),Franchise Insurance Specialist, Dalton Timmis Insurance