DOWN TO BUSINESS
Keep your business covered and protected with the necessary insurance policies.
While the types of insurance coverage provided by personal and commercial auto insurance policies are essentially the same, there are important distinctions. Typically, commercial auto insurance policies have higher liability limits. They also may have provisions that cover rented and other non-owned vehicles, including employees’ cars driven for company business.
Several factors determine whether a vehicle used for business should be covered by a personal or commercial policy. Key questions to consider:
- Who owns or leases the vehicle, you individually or the business as an entity?
- Who drives the vehicle, you or your employees?
- How is vehicle used most of the time, i.e., for transporting people, delivering documents or moving hazardous materials?
Commercial Vehicle Insurance Tips and Considerations
- If your business owns or leases a vehicle, make sure its name is listed on the policy as the principal insured.
- If you rely on personal auto or liability insurance to vehicles used for business, look closely at the provisions as business-related liability may be excluded.
- If employees operate a company car, make sure they have good driving records and are trained properly.
- Consider increasing insurance on your business vehicle to cover permanently attached items such as a generator or storage unit.
- Premiums are linked to the type of vehicle driven. If you’re buying or leasing a new car or truck, BNJA can check the insurance rates before you make your final choice.
- Safety devices can help reduce premiums. If you’re buying or leasing a new vehicle, consider getting one with anti-lock brakes, side air bags, automatic seat belts and daytime running lights.
- Adding anti-theft devices such as alarms, and global positioning systems (GPS) that help police locate your vehicle if stolen also may reduce premiums.
- If you have access to an indoor garage or locked parking lot, places that decrease the likelihood of theft, you may qualify for lower premiums.
- The region in which your business operates affects premiums. For example, insurers in areas prone to extreme weather such as hail, wind storms and hurricanes, or high-traffic, high-theft locations typically charge higher rates.
- A high past-claims history can increase insurance costs, while choosing a plan with higher than average deductibles can lower premiums.
- If you use your personal vehicle to conduct business, you may want to consider a higher liability limit. Premiums likely will be higher, but having additional coverage to protect both business and personal assets will be beneficial in the event of a lawsuit because of an accident.
- Adding telematic devices to your vehicle(s) can communicate useful information about drivers, schedules, locations and deliveries.
When the vehicle is registered in the name of the business then you definitely need commercial auto insurance. If the vehicle is registered in your name, it does not automatically mean that you should get personal auto insurance on it.
Other considerations for your vehicle:
-Carrying Hazardous (or flammable) material
-Carrying Equipment (ladders, supplies, tools, etc.
-Carrying Housekeeping Equipment for a business
-Equipped with cranes, winches, snowplows (not for use on private property only)
-Towing for Hire
-Delivery of Goods (including but no restricted to pizza, flowers, wholesale, retail)
-Rural Newspaper Delivery
-Trucking – Local and long haul
-Messenger, deliverer, chauffer
-Coverage for a third party as an additional insured.
-Waiver of subrogation.
-Liability coverage for hired or non-owned vehicles.
-Liability coverage for mobile equipment
A Commercial General Liability (CGL) policy protects your business from financial loss should you be liable for property damage or personal and advertising injury caused by your services, business operations or your employees. It covers non-professional negligent acts. Understanding this coverage is an important first step in managing CGL risks.
Here are just a few examples of situations in which your business could be responsible for paying various costs, such as medical and legal expenses, as well as compensatory and punitive damages:
- While visiting your business, a customer trips on loose flooring and is injured.
- An employee in your painting or construction business accidentally leaves water running, causing substantial damage to a customer’s home.
- A class action lawsuit is filed against your business, alleging advertisements constituted misleading information.
A CGL insurance policy will usually cover the costs of your legal defense and will pay on your behalf all damages if you are found liable—up to the limits of your policy. CGL coverage is one of the most important insurance products, due to the negative impact that a lawsuit can have on a business and because such liability suits happen so frequently.
You can purchase commercial general liability insurance as a stand-alone policy, as part of a Business Owners Policy (BOP) or as part of a Commercial Package Policy (CPP). BNJA can advise of the policies needed for your type of business.
Options to consider:
- Liquor liability insurance is business coverage that protects your business against loss or damages claimed as a result of a patron of your business becoming intoxicated and injuring himself or others
- Personal and advertising injury liability protects an insured against liability arising out of certain offenses, such as libel, slander, false arrest, copyright infringement, using another’s advertising idea or wrong eviction, entry or invasion of privacy.
- Pollution liability coverages provides industrial, commercial and agriculture owners, managers and developers with a broad range of pollution protection. If a customer is hurt on your property, general liability insurance can help pay for immediate medical expenses or legal expenses if they sue your business.
- General liability insurance can cover expenses to repair or replace customer property that is damaged at a business.
- Not all property damage or customer injuries happen inside a store. If a business manufactures, distributes, or sells products, it can be sued over the harm those products cause to people or property.
- If someone sues a business owner or employee over slander or copyright infringement, general liability insurance can help pay for lawsuit expenses.
- Professional liability insurance can cover lawsuits over professional mistakes, including undelivered services and missed deadlines.
- Workers’ compensation insurance is the policy that covers medical expenses, physical therapy, and some lost wages for employees.
- Commercial property insurance can help pay for expenses to repair or replace your business property when it’s damaged by fire, theft, and some weather-related events.
- Employment practices liability insurance (EPLI) can cover lawsuit expenses related to claims of harassment, discrimination, and wrongful termination.
- Property insurance for buildings and contents owned by the company — there are two different forms, standard and special, which provides more comprehensive coverage.
- Business interruption insurance, which covers the loss of income resulting from a fire or other catastrophe that disrupts the operation of the business. It can also include the extra expense of operating out of a temporary location.
- Liability protection, which covers your company’s legal responsibility for the harm it may cause to others. This harm is a result of things that you and your employees do or fail to do in your business operations that may cause bodily injury or property damage due to defective products, faulty installations and errors in services provided.
BOPs do NOT cover professional liability, auto insurance, worker’s compensation or health and disability insurance. You’ll need separate insurance policies to cover professional services, vehicles and your employees.
- Property Insurance
- Liability Insurance
- Business Vehicle Insurance
- Workers Compensation Insurance
In addition to the basic coverages highlighted above, there are various other policies needed by some businesses. They include:
- umbrella policies
- specialized liability policies
- terrorism insurance
“Workers’ compensation is a form of insurance providing wage replacement and medical benefits to employees injured in the course of employment in exchange for mandatory relinquishment of the employee’s right to sue his or her employer for the tort of negligence.
The five key benefits of Workers Compensation Insurance are:
- Medical costs due to injury or illness occurring while employee was on the job
- Payment of injured employee’s missed wages
- Provide necessary ongoing care for injured employee
- Covers legal costs if employee sues your company due to the injury
- Funeral costs and death benefits if employee dies due to a work related event
Employers are legally obligated to take reasonable care to assure that their workplaces are safe. Nevertheless, accidents happen. When they do, workers compensation insurance provides coverage.
Workers compensation insurance protects both the employee and the employer. While the majority of companies are responsible and would compensate employees appropriately, there are quite a few that would not. Therefore, workers compensation is required by nearly every state. In California, not providing worker’s compensation insurance is a criminal offense and can result in a $10,000 fine and/or imprisonment up to one year.Whether your business is large or small, or if you have employees, it is in the company’s best interest to get workers compensation insurance.
Depending on your industry, it’s possible that some independent contractors that your company hires are deemed as employees. If you hire independent contractors and pay them by the hour, it is possible that the state could view them as an employee rather than a contractor.Workers compensation insurance serves two purposes: It assures that injured workers get medical care and compensation for a portion of the income they lose while they are unable to return to work and it usually protects employers from lawsuits by workers injured while working.
Workers receive benefits regardless of who was at fault in the accident. If a worker is killed while working, workers comp (as it is often abbreviated) provides death benefits for the worker’s dependents.
Injuries employees sustain on the workplace premises or anywhere else while the employee is acting in the “course and scope” of employment are covered if their employer has workers comp insurance. For example, the leading cause of workers comp death claims is traffic accidents that occur when the employee is in a vehicle for work purposes, whether the trip is made in the company’s car or the employee’s own vehicle. Accidents driving to and from work are not covered.
In addition to injuries from accidents, workers comp covers injuries employees may sustain from other events that may occur while they are working, including workplace violence, terrorist attacks and natural disasters.
Workers comp insurance also covers certain illnesses and occupational diseases (defined in the state statutes) contracted as a result of employment. For example, employees who work with toxic chemicals can be made ill by exposure to the chemicals.