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FAQ : Questions Regarding Business Insurance

What is general liability?

General liability provides coverage if you are liable for damages to other individuals arising from your premises, general operations (ongoing and after completion) and products manufactured or sold. There are many General Liability class codes, and it is very important to make sure you have all the codes necessary on your policy.  Most policies have more than one code. 

Why do I need certificates of insurance from sub-contractors? 

An audit may require you to show proof that sub-contractors had their own insurance coverage. The sub-contractors' certificates of insurance will prevent you from being charged for their exposure. If you do not collect a certificate of insurance and keep it on file, you may be required to pay for this sub-contractor at audit. 

What factors determine cost of business insurance?

There are a number of factors involved in determining the cost of business insurance. The main determining factors are the size and type of the business, however a history of claims or other issues, as well as number of potential insurers competing for your business, can drive the price of your business insurance up or down.

What type of business insurance should I buy?

The type of business you own or operate and a wide variety of other factors should be considered when you decide what type of business insurance to purchase. First, make sure you have an agent that takes the time to listen to your needs and help you get the policy that fits you. Before making any decisions, make sure you ask questions and review all of your options. Typically, business owners should look at three areas of coverage: auto, property, and liability. Whether you have vehicles titled in your name or the name of the business, you lease vehicles, or if you use your personal vehicles for business use, you need auto insurance. Many personal auto policies have exclusions for vehicles that are used for business use. The same exclusions may apply for property. Also, discuss with your agent whether you need coverage for the building you own, using your home as a work space, or for business personal property used in the operation of your business.   

If I am just getting my business started, do I need insurance right away?

Yes. The chance that you could suffer a loss starts with the first day you open your doors. If you suffer a loss and you do not have insurance or have improper or insufficient coverage, there is little, if anything, your Mel Foster Insurance agent can do to assist you. You must be prepared for the business risks and the losses that they can cause. Also, many states and local jurisdictions require that businesses be insured to begin operating especially with workers compensation insurance. If your business rents the space, your landlord most likely will require that you be insured as well.

There seems to be a lot of suing happening these days.  What if someone sues my business?  How am I covered?

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 not only extends to paying damages but also pays for attorneys’ fees and other costs involved in defending against a valid or not lawsuit.