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Business Owners Insurance Policy

Business Owners Insurance Policy

What is Business Owners Insurance

Business Owners insurance can prevent a legal suit from turning into a financial disaster by providing financial protection in case your business is ever sued or held legally responsible for some injury or damage. You can start General liability insurance as a standalone coverage or as part of a Business Owner Policy (BOP). BOP combines property and liability insurance into one policy.

Business Owners Insurance Coverage Highlights

Occurrence Limit:

Maximum amount that an insurance company is obligated to pay all injured parties seeking resource as the result of the occurrence of an event covered under a Liability Insurance policy.

Aggregate Limit:

Dollar amount of coverage in force under insurance policy, insurance company will pay during the policy period. For example, if the general liability insurance aggregate limit on your policy is $2,000,000 and you have 3 covered claims at $1,000,000 each, insurance company will pay only $2,000,000, leaving your business responsible for another $1,000,000 in claims. To cover these types of situations, you can add an umbrella (or excess) liability insurance, which picks up where your general liability coverage ends. Umbrella liability covers payments that exceed their other policy’s limits, and provides additional coverage for liabilities not covered in a standard liability insurance policy.

Personal and Advertising Injury:

Covers you for certain offenses you or your employees commit in the course of your business, such as libel, slander, disparagement, or copyright infringement in your advertisements. Tenant’s Liability (Fire Legal Liability): Protects your business against claims of damage due to fire or other covered losses caused by you to premises that you rent.

Products And Completed Operations:

provides liability protection (damages and legal expenses up to your policy’s limit) if an injury ever resulted from something your company made or service your company provided Medical Expenses. Pays the applicable medical costs if someone is injured and needs medical treatment due to an accident on your premises.

Hired and Non-Owned Automobile Liability Insurance:

Hired Auto coverage provides your business with liability insurance for vehicles that you rent, on a short-term basis, for business purposes. It replaces or augments the liability coverage offered by auto rental agencies. Non-Owned Auto coverage protects your company in the event that your company is sued as a result of an auto accident that you or one of your employees has in a personal vehicle while on company business

Liquor liability insurance:

protects your business against loss or damages claimed as a result of a patron of your business becoming intoxicated and injuring themselves or others. If your business manufactures, sells, serves, or facilitates the uses or purchase of alcohol, then your business may need this coverage.

How Business Insurance Works

Under a general liability insurance policy, the insurer is obligated to pay the legal costs of a business in a covered liability claim or lawsuit. Covered liability claims include bodily injury, property damage, personal injury, and advertising injury (damage from slander or false advertising). The insurance company also covers compensatory and general damages. Punitive damages aren’t covered under general liability insurance policies because they’re considered to be punishment for intentional acts. General liability insurance policies always state a maximum amount that the insurer will pay during the policy period. Usually these policies also list the maximum amount the insurer will pay per occurrence. For example, if a company has a $1 million occurrence cap in its liability policy and it’s successfully sued for $1.5 million, the insurer would pay $1 million and the business would be responsible for paying $500,000. Most insurance companies require their policyholders to report as soon as possible any accidents that could lead to a liability claim. The insurer may then require the business owner to document the situation, forward all summonses and legal notices, and cooperate fully in any investigations. Taking precautions before an accident can help keep your liability and insurance rates down. All businesses can take certain steps to lower the chance of a liability insurance claim:

  • Set a high standard for product quality control;
  • Make sure all company records are up-to-date;
  • Train employees properly;
  • Get safety tips for your business from insurance company.