What Is Business Insurance?
The business insurance overview the main 4 parts of insurance you are either new to owning in business and just kind of want to understand how insurance works or you’ve owned a Personal business for a long Tern and time and never really paid too much heavy attention to your insurance policy and you want to understand it now I’m gonna go very quickly through coverages and provide you with a firm that you can download that really is going to organize your insurance world no matter where you get your insurance from so let’s dig right into it what we’re gonna learn is the four basic parts the first is what’s called liability coverage.
The second is Your personal property coverage out the 3rd is workers compensation coverage then sometimes called work comp and the third is commercial auto insurance so we’re gonna break those four things down for you very quickly I want to show you the coverage details form that I really think you should download and have in front of you while watching this video we have two options you can look down below the video in the show notes and download that link I would stop this video right now and download both options the first one is a blank form so it has all the coverages.
I’m going to talk about but it doesn’t have any of the limits in it so that you can fill them in yourself and then the next one has some example limits so I’ve filled it in with something that I might provide or offer to a client so you can see some common coverage limits and examples of what those difference coverages might look like so you can compare them to your own policy and get a sense of the kind of what it should look like so the blank one I would download and then the example one I would download the blank one obviously is for you to complete and the example one is one that I’ve put sample coverage limits in there so you can see.
These line by line and just say what they are so you can have that in front of you and you know understand each line so you know what’s going on there so let’s dig right into it we’re starting with liability coverage what liability coverage is is coverage for bad things that happen to other people because of you or more specifically in this video because of your business bad things that happen to other people because of you that could be covered for medical bills or lawsuits associated with injuries to patrons at your place of business this is the trip and falls or someone had something bad physically happen.
They slipped or anything like that those are going to have general liability coverage is going to be what you have for those types of coverages so a common limit for these is a million dollars per occurrence and two million dollars per year oftentimes it’s separated out by how much your insurance company would payout and any given occurrence one bad thing that happened in this example it’s a million dollars and then the most your insurance company would payout period for the whole year so if they got to that two million dollar limit. What Is Business Insurance?
Then they would not payout money no matter what other bad things and values no happened at your place of Personal business so that’s a common limit what is general liability not well it’s not for sickness or injuries caused by your product or finished operations it’s not for bad advice that you give to people and it’s not for injuries to your employees we’ll cover where those coverages come from as we move along but general liability is not for either of those three things medical expenses is the next thing it’s a small and super accessible coverage for injuries to business patrons it’s very much like general liability but it’s a tinier amount usually five or ten thousand dollars it’s very easy to access where general liability coverage comes sometimes can be after all the medical bills are paid out or even through a lawsuit process medical expenses is much more quick it’s more much more quickly accessed essentially it’s there to avoid a bigger liability situation with some medical expenses is an important coverage products liability this is where coverage for sickness or injury from your finished products or your completed operations comes from especially if you’re a food provider or a food manufacturer or something like that products liability is super important to you and this is where it comes in Employment Practices Liability.
This is coverage for lawsuits associating with your hiring practices with your firing practices with your workplace behavior practices it’s if something bad happened and someone decides to sue you because of any of those things then you could have Practices Liability coverage and an incredibly important coverage to have on your business insurance policy hope I’m not moving too fast here there are videos for a lot of these that are in much more detail but the point of this video is just to cruise on through and get you through as quickly as possible so that’s what I’m trying to do right now employee benefits liability not a commonly known coverage with super important you provide benefits to your employees oftentimes health benefits or life benefits or things of that nature if for some reason the benefits package didn’t come through in the situation.
Where someone needed it you do have liability coverage for that if you have employment employee benefits liability cyber liability becoming much more important for businesses it’s a package of coverage options associated with a cyber breach of your patrons personal information especially if you collect Social Security numbers Visa card information even birthdays and things of that nature if you have a any of that kind of information it could be breached then cyber liability is incredibly important for you to have the coverage for you to have there and then professional liability coverage is coverage for lawsuits resulting from errors omissions or bad advice provided by your business so if you’re a financial advisor an insurance agent these are coverages that you need for sure but lots of different types of businesses need this coverage because you provide advice all different kinds of advice has coverage here and professional liability is where you find that coverage again not general liability but professional liability.
Finally on the liability coverage hired and non owned auto oftentimes this is just thrown in as a part of the package but it’s super important it’s coverage for auto liability associated with your business in vehicles not owned by your business so if someone uses their car to run an errand and is clearly doing business work but gets in an accident during that time you’re hired and non owned auto policy may be what comes into play as a part of the coverage needed in that situation so hired and non owned auto coverage is the final liability coverage all right let’s move on to property coverage is very simply coverage for damage to the physical assets of your business this could be a lot of different physical assets that your business owns property coverage is what covers them so let’s check it out we start with building coverage is simply coverage for damage to the building itself. What Is Business Insurance?
If you own your building or if you have a lease that’s like a triple net lease where you’re responsible for ensuring your building even if you don’t own it then the building coverage on your policy is incredibly important the next one is business personal property sometimes referred to as bpp coverage for damage to the inquit equipment furniture and belongings owned by the business so this is kind of like everything else the stuff you own inside of your structure you have office furniture you may have equipment specific to the business that you run all those kinds of things is covered by business personal property coverage that’s an important coverage on your policy and it can be set up based on a payout of either replacement cost or a CV won’t dig deep into these details but replacement cost is definitely what you want and not a CV another property coverage is data compromised.
Tips For Business Insurance:
This is connected with cyber liability often times the package cyber liability and data compromiser together but this case is if your hardware or your software is damaged or lost in a cyberattack so you have physical assets that are ruined or need to be replaced need to redownload ‘add need to be re-put together and data compromised coverage can help specialized equipment coverage also called inland marine coverage is coverage set up for incredibly valuable or specialized or hard to replace business equipment particularly if you have vintage equipment or things that are just very very specialized for your business you want to make sure that they’re on your policy specifically and the coverage is set up properly insurance agent can help you with that money in securities coverage for the loss of physical assets.
Like money or securities business income coverage super important coverage for lost income because of a covered business shut down so something bad happened your business can’t run for that month or whatever it is you’ve lost the income associate with people coming in your front door and doing business with you your insurance policy can actually for some of that lost income if you have business income coverage employee dishonesty is coverage for assets stolen by an employee that happens more than we want to think about but it certainly happens and forgery is an alteration very much similar to the previous one is coverage for assets improperly manipulated by an employee finally on property coverage.
We have equipment breakdown this is a great coverage to have coverage for temporary and permanent replacement of equipment that fails unexpectedly there are lots of examples where a heating or air conditioning unit stops working and a business needs to keep running and a lot of these policies will actually cover a temporary replacement so that you can get your business back running and make sure that you don’t lose income associated with your business being closed and then can help with the replacement of the actual item – now it’s important to note if your heating and air conditioning just got old this is not a coverage that would take care of that’s more like a maintenance issue something you need to update on your own so that’s equipment breakdown coverage all right let’s dig into workers compensation sometimes called workers comp or work completely for injuries to your own employee’s coverage for injuries to your employees. What Is Business Insurance?
Now there’s a coverage limit that’s generally set up for three separate numbers so 100 500 101 you know is an example so let’s break down what those numbers mean a lot of times that’s confusing and the first number is the policy limit that most the insurance company pip will payout for physical injuries to your employees while they’re working pretty simple right the second is the policy limit for sickness caused by the workplace and that’s for the whole claim so the second one is for the whole claim the policy limit for sickness caused by the workplace the third is a per person limit for sickness caused by the workplace so you’re gonna have a limit per person and then a total limit for the entire claim caused by sickness those are two different numbers so let’s look at the example of 100 thousand five hundred thousand one hundred thousand see what that means well the first number 100 is what the insurance company would pay per physical injury.
They would pay no more than a hundred thousand dollars per physical injury obviously if it was less than a hundred would that’s what we would pay we pay up to a hundred thousand it would pay no more than five hundred thousand total per sickness caused by the workplace or 100,000 per person for sickness caused by the workplace so that would be a one hundred five hundred 100 situation and that would be the coverage limits that you would have there the premium is paid in kind of a weird way with workers compensation and employ and businesses get confused by this all the time what you pay for this coverage is based on two things the type of work your employees do which is like your employee category and your actual annual payroll how much you pay out in payroll the thing is that you don’t know at the beginning of the term the policy term exactly what you’re gonna pay out in payroll so you make an estimate.
So, we make an estimate with you of what you think you’re gonna pay in payroll and what jobs you think people are gonna do at the beginning of the term and we set a premium based on that but at the end there the company is going to come back and they’re gonna audit your payroll and they’re gonna see what the actual numbers were and that’s where people get really confused and sometimes really frustrated if you overpaid if you paid for more payroll or different jobs than actually happen then the company will actually send you a refund check but if you underpaid if you underestimated your payroll or if you said someone was clerical when they were actually up on roofs doing you know risky things then the insurance company is had gonna send you a Payment bill and that’s after the good fact so you could get a bill and it’s for the previous year’s workers compensation, because of the audit so that can be very confusing.
But, just wanted to lay it out a little bit here all right last part is commercial auto pretty straightforward this is coverage for vehicles owned by your business vehicles are covered you know they’re your fleet of vehicles it could be one vehicle it could be a hundred vehicles it could be a car it could truck it could be all different kinds of the vehicle but obviously, we’re gonna cover just the fleet of vehicles that your business actually owns there are two parts of this the first is auto liability this is damage and injuries to others by your vehicle so you got an accident the accident was your fault another car was smashed other people were injured that’s where your commercial auto liability coverage is going to come into and then physical damage coverage.
This is simply for damage done to your own vehicle usually has deductibles associated with it for comprehensive and collision two different kinds of physical damage that can happen to your vehicles commercial auto is very state based so you really want to make sure you understand how auto insurance works in your state again we have other videos on on the details of no-fault insurance versus at fault insurance and things of that nature but commercial auto is something that you should understand your insurance agent should be explaining to you based on the state laws that you experience okay that was it so here’s that example of our form our blank form I just went through really really quickly all the different coverages that are on that form hopefully you’ll download it you’ll use it to compare to your current insurance policy or talk to your insurance agent about it if you have questions about any of those specific coverages you can go back into this video and find my very quick explanation of that particular thing and then we’ve got the other one that has coverage examples as well again you can download those in the notes below this video okay what did we learn well we talked about four different types of business coverage we talked about liability coverage.
Different Types Of insurance:
There’s lots of different liability coverages and your business policy we talked about property coverage for your physical assets workers compensation coverage for injuries to your employees and finally, commercial auto coverage for your fleet of vehicles and damage that they could do to other people as well as damage that could happen to them themselves would you like more from our channel we would love to provide it for you I already mention it but our worker’s comp audit you can click right here and get access to that video we describe in detail how paying for your worker’s comp policy works it’s a video I would definitely recommend I recommend to all my clients.
So, that you understand how to work comp insurance works and you don’t get burned by it we’ve got a great podcast called scratch entrepreneur where I interview different business owners and talk to them about their businesses talk to them about their successes their failures and how they took their business from scratch to the place it is right now and finally if you want to check more out about shine insurance we’d love to have you over our website at shine insurance com so that’s it and as always the last steps in this video if you haven’t done so already please click that subscribe button will get more great videos out to you like this video if you thought it helped you definitely give us a little shout out we’d like to know and finally if you think this video could help other people please share it with them good information is only great if it’s shared with others alright this is Jeremy from shine insurance and until the next time have a wonderful day.