Business general liability coverage provides insurance against business liability exposures which may arise out of the commercial operations of the insured and result in the business owner losing substantial assets. It is important for a business to carry adequate business liability insurance since firms are exposed to liability on a daily basis, and the percentage of commercial liability lawsuits is quite high.
While your business may not need all commercial coverage lines, it is a good idea to have a basic knowledge of the types of business insurance coverages available. As your business changes and expands you will have the necessary knowledge to purchase insurance coverage as new exposures arise. The following commercial lines of insurance cover broad areas of exposure common to most business operations:
Property Insurance
Commercial Property
Inland Marine
Boiler and Machinery
Crime
Casualty Insurance
Business Auto
Business General Liability
Business Umbrella
Workers Compensation
Property Insurance
Business insurance is divided into two main categories: property insurance and casualty insurance. Property insurance provides coverage for property that is stolen, damaged, or destroyed by a covered peril. The term property insurance includes many lines of available insurance. Business Property, Inland Marine, Boiler and Machinery, and Crime are the most common commercial property coverage lines.
Business Property
Buildings you own or lease as a part of your business, your business personal property, and the personal property of others make up the basic coverage sections of business property insurance. Business property insurance can be sold separately as an individual line policy (referred to as a monoline policy), or it can be sold as part of a Business Package Policy (CPP), which combines two or more commercial coverage parts such as business property, general liability, and business auto.
Building coverage includes buildings or structures and any completed additions, which are listed on the declarations page of a commercial policy. Permanently installed fixtures, machinery, and equipment are also insured as a part of building coverage. The limit of insurance is the estimated amount needed to rebuild your building and to replace permanently installed fixtures, machinery, and equipment in the event of a total loss.
Business Personal Property consists of furniture; fixtures, machinery, and equipment not permanently installed; inventory; or any other personal property owned by and used in your business.
Personal Property of Others refers to property that is in your business's care, custody and control. The type of business you operate will determine if you need to protect the personal property of others.
Inland Marine
Without prior knowledge of inland marine insurance, it is easy to assume that this insurance line has something to do with boating transportation. In fact, inland marine insurance can cover a variety of transportation exposures; however, it does not cover boating transportation, which is covered under ocean marine insurance. Inland marine is a specialized type of property insurance that primarily covers damage to or destruction of your business property while in transport. Inland marine also covers the liability exposure for the damage or destruction that may occur to property in your care, custody, or control during transport.
Boiler and Machinery
Boiler and machinery insurance can add an important layer to potential insurance coverage. Boiler and machinery insurance is currently marketed under such names as systems protector, systems breakdown, and machinery breakdown insurance. Boiler and machinery insurance covers business property, other property losses, and legal fees (if any) that may result from the malfunction of boilers and machinery. Boiler coverage includes covering the costs of inspection and often maintenance of boilers. Machinery coverage can include many different types of machines used in retail, office and manufacturing settings. Machinery coverage also includes major machinery systems common to most commercial buildings, such as heating, ventilating and air conditioning systems. Since most business property policies exclude losses from boilers and machinery, it is important to be aware of any exposure your business may have.
Crime Insurance
Crime insurance provides protection for the assets of your business including merchandise for sale, real property, money and securities. It is considered a property insurance line. Based on the crime coverage that you purchase, it is possible to be covered for the following causes of loss: robbery, burglary, larceny, forgery, and embezzlement.
Casualty Insurance
Casualty insurance provides coverage primarily for the liability exposure of an individual, business or organization. Liability from the negligent acts and omissions of an individual, business or organization that causes bodily injury and/or property damage to a third party is the subject of casualty insurance coverage. Commercial Automobile, Commercial General Liability, Commercial Umbrella, and Workers Compensation are the most common business casualty insurance lines.
Business Auto Insurance
Commercial auto coverage is similar to the coverage you may carry on your personal auto; however, business auto exposures can be more complex requiring specialty coverages to be considered based on the individual needs of your business. Basically, business auto coverage can protect your company from any liability stemming from autos used in your business or any damage to the covered automobile. A Business Auto Policy (BAP) has the flexibility to provide coverage for business, personal, non-owned, or hired autos based on the coverage purchased and applied to each scheduled auto.
Business General Liability
One of the key concepts of liability coverage is that it is comprehensive in nature. What this means is that the policy (insuring agreement) covers all hazards within the scope of the insuring agreement that are not otherwise excluded. It is likewise comprehensive in that it provides automatic coverage for new locations and activities of your business, which come about after policy inception and throughout the policy term. Commercial General Liability (CGL) is the standard commercial liability policy used to insure businesses.
Business Umbrella
When a liability claim goes above the aggregate limit of liability, the policy limits are exhausted. By purchasing a commercial umbrella, you can protect your business from being liable for this excess liability judgment. A business umbrella covers the amount of loss above the limits of a basic liability policy. Business auto, Business general Liability, workers compensation, or any liability policy can be covered by a Business umbrella.
Workers Compensation Insurance
As a California employer you are required under California Labor Code Section 3700 to provide workers compensation benefits for your employees. When an employee suffers a work related injury or illness, workers compensation insurance steps in to provide benefits based on the type of illness or injury sustained. Workers compensation is based on a no-fault system, which means that an injured employee does not need to prove that the injury or illness was someone else's fault in order to receive workers compensation benefits for an on-the-job injury or illness.
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