Tuesday, August 02, 2005

Business Insurance: Are You Covered?

Business Insurance: The Basics
General Liability
General liability insures a business against accidents and injuries on its premises, and exposures related to its products/services. For example, a visiting salesperson slips in your office and breaks an ankle. General liability covers the claim against you.
However, let’s say the business is a window manufacturer, with hundreds of its windows installed in homes and businesses. If something goes wrong with them—and this is the confusing part—that is not related to poor workmanship, general liability also covers the damage that results. Naturally, insurance companies don’t want to pay for sloppy work. As a result, general liability tends to be rife with exclusions to the point that some companies wonder why they have it.
Most property insurance is written on an all-risk basis, as opposed to a named-peril basis. The latter offers coverage for specific perils spelled out in the policy. If your loss comes from a peril not named, then it isn’t covered.
Business owners should get a breakdown of what the coverage offers. Then, go the extra step and carefully review the policy’s exclusions. All policies cover loss by fire, but what about such crises as hailstorms and explosions? You may want to buy coverage for all these risks. Perils not covered by a typical policy include: earthquakes and landslides, nuclear contamination, flooding and water-seepage, and maintenance-related losses, such as wear-and-tear and pollution.
Workers’ Compensation
Workers’ compensation is required by law in all states (businesses with five or more employees in Missouri). Each state says that employers are liable for all injuries to workers, regardless of fault. In exchange for this blanket coverage, workers give up the right to sue their employers, except in cases of extreme negligence.
One way to reduce workers’ compensation premiums is by reducing accidents. Even in office settings, injuries, such as carpal tunnel syndrome and slips and falls, can increase your premiums.
A business auto policy covers property and liability risks that can come with the ownership or use of cars and trucks. The primary strategy for saving money with auto insurance is increasing the deductible.


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