I don't have any major business assets. Why do I need insurance?
Every business has some property. Just like your home and your car, your business needs to be protected from loss, damage and liability. In addition, your business is your source of income, so you need protection from the potential loss of that income.
Generally, there are two types of insurance - property and liability. Property insurance covers damage to or loss of the policyholder’s property. And if somebody sued for damages caused by you or your possessions (other than a vehicle, which must be covered by your auto insurance policy), the cost of the suit - both defending it and settling it, if necessary - would be covered by your liability insurance.
What types of property insurance should I consider buying?
You need to consider your business situation. Are you planning a major expansion? Does your inventory have a decidedly peak season (like a toy store in December)? Or does it fluctuate throughout the year (like a clothing store)? Is your liability limit high enough in light of a new job contract you just signed? Business policies are designed to be changed to meet your needs. Be sure to discuss changes to your business with your agent, so that he or she can be sure your policy still provides adequate coverage.
Some common additional coverages for business property include (although this list is by no means all-inclusive):
Boiler and Machinery Insurance
Even if you do not own a boiler, you may need this coverage. Boiler and machinery - or equipment or mechanical breakdown - insurance provides coverage against the sudden and accidental breakdown of boilers, machinery or equipment, including computer systems and telephones/communication systems. Coverage usually includes reimbursement for property damage, expediting expenses (e.g., express tranportation charges), and business interruption losses.
Builders Risk Coverage
This covers buildings in the course of construction. Depending on the policy, this coverage can be for either the building’s value at the time of loss or its full value at the time of completion.
Business Interruption Insurance
This covers the loss of earnings as a result of damage or loss of business property. Reimbursement for salaries, taxes, rents, and other expenses, plus net profits that would have been earned during the period of interruption, can be included.
Commercial Crime Coverages
This covers money and securities, stock and fixtures against theft, burglary and robbery both on and off the insured premises and from both employees and outsiders.
This covers business owners for losses due to dishonest acts by their employees.
This provides coverage for glass breakage such as store windows and plate glass on office fronts.
Inland Marine Insurance
Primarily covers property in transit, such as from warehouse to warehouse or warehouse to retail store, as well as other people’s property left on your business premises, such as clothes left at a dry cleaning business or an employee’s personal effects left in the company locker room.
Insurance for Loss of Lease Income or Value
This covers the loss of income when rental property is damaged or destroyed and the loss of value when the owner of the rental property also used some of its space for business. If the tenant of the destroyed or damaged building is forced to rent space elsewhere at a higher cost, this is called loss of lease value.
Directors and Officers Liability Coverage
Directors and officers liability insurance provides specialized coverage for the directors and officers of your company. This coverage protects these individuals against losses that may result from alleged errors in judgment, breaches of duty or wrongful acts in the course of their work for your organization.
Workers compensation insurance provides benefits to employees for work-related injuries. Coverage includes medical care and a portion of lost wages when the employee is unable to work. Workers compensation insurance also provides benefits for the employee's dependents for a worker who dies during work-related duty.
Excess and Umbrella Liability
We provide excess and umbrella coverage that enhances your current casualty insurance program - true catastrophic coverage above the current underlying liability limits.
What about the cars and truck that I have in my business? Is the coverage like what I have on my personal car?
Yes, but in addition to covering the vehicles you own for liability, medical payments, uninsured motorist coverage, comprehensive and collision, it can also cover you when you rent a car and when your employees are operating their personal cars for your business. Be sure to review your auto exposures with your agent.
Does my Commercial Auto Policy cover a borrowed or rented vehicle?
If your auto policy provides Hired Auto Physical Damage coverage, then damage to the rented vehicle from an accident would be covered. Loss of use and other charges by the rental company may not be covered.
In general, coverage for a borrowed vehicle would be limited to liability coverage, and there would be no coverage for the vehicle itself. To be certain, contact us to discuss your specific situation.
I keep one auto strictly for business. Do I need a separate policy?
Yes. Whether you have one vehicle or several, you will need a business automobile policy. Such a policy covers any motor vehicle used in your business including cars, vans, trucks and trailers pulled by trucks, and offers coverage if they are damaged or stolen. It also covers liability if the business vehicle is in an accident and the driver is at fault. This policy is not for truckers or commercial garages. They have special liabilities and must secure policies that deal with their different needs. Businesses that have a fleet of vehicles will of course have different needs than a business with one or two, and their policies will reflect these differences.
I just signed a 3-year lease to open my business. Why does my insurance agent want to see my lease?
Whether the business lease is for a building or for equipment, your agent needs to determine who is responsible for insuring the leased items - you or the lessor. For leased buildings or building space, there are other factors to be considered, such as who is responsible for plate glass coverage and whether your landlord requires tenants to carry minimum amounts of liability insurance, and the extent of a hold harmless agreement. These and other situations covered in the lease affect the amount and kinds of insurance you need. Just remember, each lease is different. We recommend that you consult with your attorney and our office to see just what you responsible for.
I work out of my home. Will my homeowners insurance cover my business?
Yes, but on a very limited basis. Loss of business property is usually reimbursed up to $2,500 in the house and up to $250 for business property damaged or lost away from the premises. Even if your business is a sideline such as a craft studio, these limits may be too low to cover all the equipment and materials you have accumulated. It’s also important to know that no business liability coverage is included in a standard homeowners policy. Your agent can help you ascertain what, if any, additional coverage you need. This additional coverage may be added to your homeowner policy or found in a separate commercial policy.
Can I do anything to lower my insurance premiums?
Remember that all insurance premiums are based on the risks involved. The insurance company evaluates the situation to determine the risks - or potential for losses - and bases its rates on the results. Therefore, deliberate steps you take to lower your risks not only can help safeguard your business, but also may make you eligible for lower insurance rates. Consider these steps:
·Maintain adequate lighting throughout your business premises.
·Keep electrical wiring, stairways, carpeting, flooring, elevators, and escalators in good repair.
·Install a sprinkler system, smoke and fire alarms, and adequate security devices.
·Keep only a small amount of cash in the cash register.
·Keep good records of inventory, accounts receivable, equipment purchases and the like. Consider keeping a second set of records off-site.
·Make sure your employees have good driving records.
·Make sure your employees know how to lift properly and use all necessary safety equipment, such as goggles, gloves and respirators.
·Consider using the services of a risk manager. Such an outside consultant can advise you of any safety or environmental regulations you may have overlooked or not been aware of and talk to your employees about safety practices.
·You may also wish to raise your deductibles where appropriate to lower your insurance premiums. How high to raise the deductible should be governed by how much you can afford to pay out of pocket. Be careful not to raise it so high that you cannot cover it should a loss occur.
·Finally, make sure your agent is familiar with your business and the risks inherent in it. He or she should be able to advise you on risk management techniques and their benefits to both you and the insurer.
Who decides how much my business property is worth?
Property insurance can be purchased on the basis of the property’s actual value, on its replacement cost, or on an agreed amount. The differences among the three are:
Actual Cash Value
The replacement cost of the item, minus depreciation. For example, a new desk may cost $500. If your 7-year-old desk gets damaged in a fire, it might have depreciated 50%. Therefore, insurance would pay you $250.
Replacement Cost Coverage
This coverage pays the cost of replacing an item without deducting for depreciation. So today’s cost for a desk of a size and construction similar to the 7-year-old one damaged by fire would determine the amount of compensation. If it costs $500 today, that would be the replacement coverage.
Art objects, antiques and other unique items are usually insured at an amount agreed upon when the policy is being written. An appraiser values the goods to be insured, and the business owner and the insurer agree upon an amount that the insurer will pay if the goods are destroyed due to a covered peril.
Check your policy. If you prefer replacement coverage and do not already have it, this coverage can be added to your policy. Inflation-guard coverage, which automatically increases your insurance amount by a certain percentage, protects against rising construction costs. Your agent can advise you of the costs involved.
What kinds of events does business insurance cover?
Basic property insurance policies generally cover losses caused by fire or lightning and the cost of removing property to protect it from further damage (e.g., removing inventory or equipment from a damaged building so it won't be stolen). “Extended perils,” including windstorm, hail, explosion, riot and civil commotion, and damage caused by aircraft, automobiles or vandalism, are usually covered in a standard policy. Other important perils, often not covered and considered “optional” in almost all standard policies, include earthquake and flood damage.
Property insurance can be written as either “named peril” policies or so-called “all risk” policies. A named peril policy provides coverage for those perils specifically named in the policy. An all risk policy covers loss by any perils not specifically excluded in the policy. The term “all risk” does not mean that all perils will be covered and, to avoid confusion, is often replaced with the term “special form” or “special causes of loss” coverage.
Check with your agent on the perils covered by your policy. If you wish, additional coverage can usually be added.
Everybody seems to be suing everybody else these days. What if someone sues my business?
No business can afford to be unprepared for a lawsuit. Liability insurance protects your business assets when the business is sued for something the business did (or failed to do) that contributed to injury or property damage to someone else. Liability coverage extends not only to paying damages but also to the attorneys’ fees and other costs involved in defending against the lawsuit - whether valid or not.
The standard Business owners policy provides liability coverage, as does a separate policy known as a commercial general liability (CGL) insurance policy. Generally, commercial liability insurance, whether purchased in a separate policy or as part of a standard Business owners policy, will cover bodily injury, property damage, personal injury or advertising injury. The medical expenses of a person or persons (other than employees) injured at the business or as a direct result of the operations of the business are also covered.
Usually excluded from both types of liability insurance policies are suits by customers against a business for nonperformance of a contract and by employees charging wrongful termination or racial or gender discrimination or harassment.
Check with your agent about the best liability protection covering all types of situations that may arise in your business.
What should I look for in an agent?
Agents are here to help you. At the most basic level, any agent should be able to answer all of your questions about insurance, provide you with a thorough assessment of your insurance needs and offer you a choice of insurance products to meet those needs. Also, any insurance agency should provide you with prompt, quality service in the case of a claim.
Just as important is the level of professional confidence and personal comfort you feel with the agent. Many people stick with the same insurance agent for decades, even generations. It helps to find an agent you can get to know and trust.
An important, but sometimes overlooked factor to keep in mind is that there are two kinds of insurance agents: those who represent only one insurance company and those who represent more than one insurance company.
Agents offering through their agencies only the policies of one insurance company often are referred to as “captive agents,” because the company they represent does not allow them to offer their customers competitive alternatives.
By contrast, agents offering through their agencies the policies of more than one insurance company are called “independent agents,” because they can shop around for their customers for the best insurance values among a variety of competing companies. A nationwide survey showed that Americans prefer to work with independent insurance agents by a 2-to-1 margin over captive agents.
Ph. 336.272.4554 or 1.800.253.2884
218 North Eugene Street
Greensboro, NC 27401
Complete Protection For Your Business
Our agency understands that every business and industry is unique. Whether your business is large or small, we can tailor a program to cover your specific insurance needs.
Loss Control Programs.
Acting as a team with our insurance companies, we can evaluate your business’s current conditions and recommend ways to reduce your losses. Lowering your potential losses will increase your productivity, and that results in better profits for your company.
Quick Claim Response.
We only represent companies with excellent records for settling claims fairly and promptly. So when you have a claim, let us help you get quick results.
Once we have determined the type of insurance coverage needed for your business, we will shop our markets for a special pricing program for you. Many of our companies have designed packages that offer the broadest coverage for contractors, retailers, offices, restaurants, churches, auto repair garages, and many others, if they meet the companies' requirements.
Our professional staff is ready to assist you with any of the following products:
- Business Owners Packages
- General Liability
- Garage Liability
- Worker's Compensation
- Builder's Risk
- Commercial Automobile
- Inland Marine
- Crime Coverage
- Computer Coverage
- Flood Insurance
- Bailees Insurance
- Special Events Coverage
To Learn More About Our Companies
St. Paul Travelers
Erie Commercial Insurance
St. Paul Travelers Claims
Erie Commercial Claims
Montgomery Insurance Claims