Regardless of the size of your business, the following is a partial list of coverages which should be considered when protecting your operation. Benchmark Commercial Insurance Services, Inc. specializes in providing custom tailored packages of these coverages for you.
The BOP is a package of insurance coverage’s in a single policy that meets the insurance needs of many small business owners. It includes commonly required property and liability insurance and some optional coverage’s. Unlike other stand-alone small business policies, it eliminates coverage restrictions and limitations and offers additional enhancements.
Property Insurance is designed to replace property damage arising from claims covered under the provisions of the policy. Determining whether a claim is caused by a "covered peril" is often difficult and confusing. "Peril" refers to what caused the damage to happen in the first place. Some instances are obvious such as fires or vandalism. Other causes of damage can be more confusing such as Off Premises Power Failure or Sprinkler Leakage.
Building — Covers buildings against direct physical damage, subject to standard policy exclusions. Valuation can be based upon Replacement Cost or Actual Cash Value.
Business Personal Property — Covers personal property and contents against direct physical damage subject to standard policy exclusions. Valuation can be based upon Replacement Cost or Actual Cash Value
Loss of Income — This is perhaps the most important part of any insurance policy. Covers loss of income less non-continuing expenses due to the necessary suspension of business operations during the period of restoration. Interruption must be caused due to damage at the described location and caused by a covered peril. There are several options to the loss of income form, you can choose to include payroll for certain employees or choose to insure only the net income. One of the best forms of coverage you can find is Actual Loss Sustained for 12 Months (ALS). This coverage pays your actual loss of income for up to 12 months. Consult carefully with your agent to find the right coverage for your business.
Loss of Income From Dependent Properties — Covers loss of income from a business or source of materials that your business relies upon in order to sell your products of services. An example would be if your business manufactured computer boards and utilized chips that were only made by company XYZ. If company XYZ were to suffer a loss preventing production of their chips, your company could also suffer a loss. This endorsement protects your business for just such a loss.
Loss of Rents — Covers the loss of anticipated gross rental income, all transferred charges, back to you the insured which are the legal obligation of the lessee and the fair rental value of any portion of the property occupied by the insured.
Extended Loss of Income Coverage — most forms of business income coverage pay you the lost income for the period the business was closed. In some cases it may take your customers extra time to find out you have once again opened your doors. Consequently your income after re-opening is less than normal. By purchasing this endorsement you can buy coverage to pay the difference in income for a short amount of time, usually 3-6 months. Very necessary for restaurants.
Extra Expense — covers the necessary additional expenses and charges incurred in order to continue as nearly as possible the normal conduct of business following a covered loss. Examples would be the extra costs to rent a temporary facility and equipment to keep your business functional during a loss.
Earthquake — Covers against direct physical damage caused by an earthquake, subject to standard policy exclusions.
Earthquake Sprinkler Leakage — Covers against direct physical damage caused by leakage of your fire sprinkler equipment due to an earthquake.
Fire Legal Liability — Covers rented or leased building against direct physical damage due to Insured’s negligence that results in Fire Damage Only. It is important for insured’s to have the fire legal liability limit equal to the amount it would cost to rebuild the structure you rent in the event of a full fire loss.
Personal Property of Others — Covers the personal property of others in your care, custody or control. Examples, dry cleaners, repair shops, auto repair shops etc.
Building Ordinance — Covers the enforcement of any building, zoning, or land use law to the undamaged portion of the building caused by ordinances or laws that require demolition or regulate construction, repair, zoning, or land use. Coverage is included in building limit.
Demolition — Covers the cost to demolish a building or other structure due to an enforcement of a building ordinance.
Off Premises Power Failure — Covers direct and consequential loss to the insured’s premises or business due to a power failure caused away from the insured’s premises. An example would be if the local power company has an outage causing your restaurant to close down for lunch causing you an income loss.
Mechanical, Electrical Pressure Equipment — Covers sudden and accidental mechanical breakdown of refrigeration and air conditioning equipment, pressure vessel, pressure boilers, etc., including processing and production equipment.
Consequential Damage — Covers loss due to the spoilage of property from lack of power, light, heat, steam, or refrigeration, resulting from a covered cause of loss.
It is important to also consider what causes of loss you wish to purchase. This will determine whether or not damage to property is covered under the insurance policy.
Always consult with an insurance professional to determine the coverage’s best suited for your business.
Many building owners overlook earthquake insurance believing it is too cost prohibitive. However would it be more cost prohibitive to lose the rental income and have to pay for demolition and the cost to rebuild your building? How about bringing the building up to code due to earthquake damage?
The key factors in determining your earthquake insurance premiums are:
Type of soil building was built on.
Age of building.
Retrofitting — building bolted to the foundation.
Tuck under or first floor parking.
The Standard Flood Insurance Policy (SFIP) Forms contain complete definitions of the coverage’s they provide. Direct physical losses caused by "floods" are covered. Also covered are losses resulting from flood-related erosion caused by waves or currents of water activity exceeding anticipated cyclical levels, or caused by a severe storm, flash flood, abnormal tidal surge, or the like, which result in flooding, as defined. Damage caused by mudslides (i.e., mudflows), as specifically defined in the policy forms, is covered.
The most important thing to remember about insuring your property and equipment is the location where it will be stored or used. Under the definition of a standard property insurance policy property and equipment are only insured within 100 feet of the insured’s premises. If a loss occurs to property or equipment that is over 100 feet away from the premises there may be no coverage for them. That is where Inland Marine coverage kicks in. With Inland Marine you can insure a wide variety of property, goods, and equipment in different ways. A good example of a potential uncovered claim would be a forklift. Suppose you are carrying goods to a nearby warehouse and along the way the forklift is hit and damaged by a vehicle? Or you store the forklift at another location and it is stolen. If the forklift is more than 100 feet off premises it will not be covered under a property policy.
Tools And Equipment Floater — Covers tools on and away from your premises against direct physical loss subject to standard policy exclusions. Check your policy for locked vehicle or locked toolbox exclusions.
Contractor’s Equipment Floater — Covers equipment on and away from your premises against direct physical loss subject to standard policy exclusions. All equipment is subject to standard policy exclusions.
Installation Floater — Covers materials and supplies during transportation and installation. If you have materials at site waiting to be installed you better get a floater to cover the materials on site before and during installation in case of theft.
Accounts Receivable — Covers all sums due the insured from his customers provided the insured is unable to effect collection as direct result of loss or damage to his records of Accounts Receivable.
Valuable Papers — Coverage consists of written documents and records, including books, maps, films, drawings, deeds, mortgages, and manuscripts, but not money and securities. Coverage is against risks of direct physical loss.
EDP — Computer Hardware — Insures against risks of direct physical loss or damage to insured’s computer hardware, subject to policy conditions or exclusions.
EDP — Computer Extra Expense
EDP — Mechanical Breakdown
Property At Any Other Location
Salesmen’s Samples Provides coverage for all direct physical loss or damage to glass described in the glass schedule, subject to policy conditions or exclusions.
Glass — Provides coverage for all direct physical loss or damage to glass described in the glass schedule, subject to policy conditions or exclusions. Always check to see if you can buy down the glass deductible. Most policies the glass deductible is the same as the property deductible. You might be carrying a $1,000 deductible on your property and most glass claims will fall below this.
Signs — Provides coverage for all direct physical loss or damage to signs described in the sign schedule, subject to policy conditions or exclusions.
Motor Truck Cargo — Covers cargo owned or sold to others while it is loaded for shipment in or on described vehicles.
Transportation Floater — Covers your property while it is being transported from one point to another while it is in the insured’s vehicle or in the care, custody or control of others.
Bailees — Covers direct physical loss to property of others while it is in your care, custody, or control. This is extremely important for any business who repairs the goods of others, dry cleaners, office machine repairs, tv-stereo-vcr repairs, tailors, etc.
Every company, regardless of size, is a potential target for white-collar crime, which causes businesses to lose billions of dollars annually. This is commonly referred to as Employee Dishonesty. Estimates of losses start at $40 billion a year, and experts acknowledge that this is one of the fastest-growing, most prevalent problems facing businesses today. The changing economic environment, advancements in technology and international expansion make the threat of loss more ominous than ever before. Is your company at risk? Consider these crime loss scenarios, and then talk to us about coverage from Chubb, a leading underwriter of Crime Insurance for more than 50 years.
A high-level marketing executive working for a transportation company set up a fictitious firm, in collusion with his wife and in-laws. The firm over billed for services that were performed, and also billed the company for services never rendered. Over the course of several years, the scheme resulted in a loss to the company in excess of $2,500,000.
Paper Products Distributor
The distributor's general manager, in collusion with her colleague in the warehouse, diverted raw material before it became inventory to a competitor. They also sold the competitor jumbo rolls of paper and finished products that they stole from the warehouse. The competitor had full knowledge of what was transpiring. The distributor sustained a loss well in excess of $3,000,000.
Cruise Ship Line
The cruise ship line's senior vice president wire-transferred funds from the line's account to his own bank account for personal use, and he also obtained kickbacks from vendors. He then sold property he owned to the line at inflated prices. Losses sustained by the cruise ship line were $2,000,000.
The manufacturer's regional sales director approved the payment of invoices for promotional items submitted by five suppliers, each owned or controlled by the employee's spouse and her friend. The prices were inflated on those items actually provided. Other invoices were paid by the manufacturer for nonexistent goods. The manufacturer estimated that its loss over a five-year period was well in excess of $1,000,000.