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.
