Commercial Insurance For Businesses

Protecting your business is the central concern for most all business owners. Many of us take steps like backing up computer systems, installing alarms systems, procuring wall safes, all in the attempt to protect what we have worked so hard to gain. That fact that so many of us will go through such painstaking steps to safeguard against the obvious makes it all the more stressing that we often times will forget one of the most important aspects of covering our assets, commercial insurance. Commercial insurance can take on many forms, protecting your property, automobiles, general premises and much more. Obtaining a commercial insurance quote can be a much easier prospect than you may think.

We have all seen the omnipresent adds for automobile insurance that are constantly vying for our attention. They tend to make decision making an easier process. Finding a great quote for commercial insurance is as little as a quick Google search away. The majority of commercial insurance quotes are obtained by a commercial insurance broker or agent. What this means is that they will represent the client (you) on your behalf to interact with the various insurance markets to obtain the coverage your business will need in the event of a loss. If it sounds simple, that’s because it is. Dependent on the size of your business you will likely be content with accessing a local “property and casualty” broker in your neighborhood. They will have the know how and access to the various insurance markets which you will eventually get your coverage. In fact, many carriers (insurance companies) will not deal with customers directly, thus you will be obligated to use an agent or broker. Most broker or agents will be available through the Internet or via personal meetings. You will need to provide your broker with a litany of information regarding your personal credentials as well as your business financials. Once all of this information is obtained your broker will present this information to various carriers in order to obtain the various insurance quotes. Using an insurance professional to place your coverage will provide two benefits, they will be able to quickly and efficiently determine the nature of risk your company is exposed to, and secondly, they will be able to seamlessly navigate the various markets on your behalf.

It is natural to want to protect what you have built through your hard work and effort. As you can see, neglecting your liability when it comes to insurance is not only silly, but down right neglectful. For as little as a few hundred dollars a year you can have up to a million dollars in liability protection. Should you need it, you will thank your lucky stars it is there for your protection.

The Role of the Commercial Insurance Broker

Business come in all sizes, and the role of the Commercial Insurance Broker will vary in some respects with the size of the client company and the amount of insurance expertise it has available among its own staff.

The approach to commercial insurance of a small engineering workshop in a side-street will not be the same as that of a huge multi-national corporation which may number an insurance company among its subsidiaries. The essentials of the broker’s task will be the same, however, for the largest company as it is for the individual: to use his knowledge of insurance and of the insurance market to help his client to arrange a sound insurance programme which, to the maximum extent possible, meets the client’s particular needs.

The Business Insurance Broker will handle the insurances of a small company in a manner very similar to those of an individual. The relationship is likely to be a personal one wit the directors of the business, and they can be considered, in a way, as individuals who have a different, and more extended, set of insurance needs because of their involvement with the company.

The first essential will be for the insurance broker to ensure that his clients have the compulsory commercial insurances which they need for their business to be carried on legally.

Employer’s liability cover to protect the workforce must be arranged, and motor insurance is also likely to be a necessity. If the business has plant or machinery which must have a periodical statutory inspection, it will be usual to arrange for this to be done by a specialist engineering insurer under the terms of an engineering inspection contract, with or without insurance.

Fire insurance will be very important, as will consequential loss insurance to protect the firm against loss of earnings during the period following a fire until it is fully back in business. Then there will be all the other insurances which a business needs – public and products liability, theft and money insurance, goods in transit and perhaps marine insurance, all-risks covers, fidelity guarantee and possibly others. The broker may also be asked to provide insurance covers for staff, a group life and pensions scheme, or personal accident or permanent health insurance for example.

The range of insurance which may be needed, and the variety of problems which may be associated with them, place great demands on the broker with an industrial firm as his client, and make it much less possible for him to be a specialist in one or two types of insurance only. The individual may be happy to consult a broker for life or motor insurance only, but the industrial company is likely to want a single source of advice for all its insurance problems.

The larger the client company is, the less it will be interested in buying standardised commercial insurance covers or packages designed for small business insurance, and the more it will want policies which match its own specific needs. This calls for a very deep understanding of the client’s business on the part of the broker, matched by creativity in designing insurance solutions to the problems posed. The Commercial Insurance Broker’s negotiating skills may also be called upon to persuade an insurer to accept what may be an entirely new approach to a particular insurance need.

The problems of a small spread of risk may be overcome because the company is large enough to be rated on its own past record rather than as a member of a trade which is rated as a class in an SME business insurance package. When it reaches this size, a company may be interested in extensive self-insurance, and these days it is part of the broker’s role to help such clients develop appropriate self-insurance plans and to advise on risk management measures to ensure that the risk that is being retained is reduced as far as is economically possible.

Choosing A Commercial Insurance Policy

Choosing the correct commercial insurance for your business needs can be daunting enough even for a seasoned businessman or negotiator. For a start-up enterprise ensuring that the business has full and proper protection against all risks, it is an even larger minefield.

There are however some basic rules of insurance, which if born in mind while looking for the right commercial policy, will ensure that the enterprise is neither under or over insured and has the necessary cover in force.

For a commercial insurance contract to be valid the proposer must have what is known in the industry as ‘an insurable interest’ in the object of the cover. This immediately helps define the type of property insurance policy that a businessman might require.

The business risks to be insured under the policy are not the physical object themselves but the financial value of such, which is defined as the interest that a policyholder has in the objects should they suffer loss if the insured risks occur.

Clearly then the type of policy that a business will require depends upon whether the proposer is the owner of the commercial property, or a leaseholder or tenant.

An owner of a commercial premises who lets or leases a building, no matter the type of business activities that may be pursued there, would only have an interest in the buildings fixtures and fittings of the property concerned and any liabilities to the public that may arise from these.

A lease-holders interest in the buildings may be dependent upon contract of lease and should be checked thoroughly with the agreement. Often a contract will make it the responsibility of the lessee to provide cover for the lease term.

Owner occupiers of commercial premises will have a financial interest in both the buildings and contents of the property and will require insurance for both.

Rented commercial property buildings cover is not usually the concern of the tenant who will only have an insurable interest in any contents of the building and in any improvements that they may have made to the property in order to carry out business.

Before getting any commercial property insurance quotes it is necessary for the businessman to calculate the values of all the buildings, contents and stock. Buildings value should be based upon the rebuilding costs following a total loss and allowing for inflation. Accurate annual turnover figures will be required for contents insurance. If high value stock items are kept at the property, then the value of these should be determined individually.

Applying for commercial insurance quotes online might only take a minute or two to complete, however the preparation needed to obtain accurate data to supply to the insurance company could take a lot longer. It is unlikely that even the small businessman has calculated the value of his office contents for replacement purposes.

Ensuring that the information you supply on a commercial insurance proposal form is correct, is not only legally required, but is essential if you wish to avoid problems if a claim has to made at a future date. Problems can quickly arise with disagreements over the value of stock or office equipment values following a major loss, especially where the declared values are not sufficient and an average or proportional reduction to a claim is imposed.

Having established any property risks that a commercial enterprise may be exposed to it is then necessary to look at all the potentialities and risks that the business might be liable for, in the course of carrying out its commercial activities.

Liability insurance is essential for all enterprises, large or small.

Public liability insurance protects the business against any claims from the public for loss or damage suffered, for which the business could be held liable. Employers liability, a type of workers compensation insurance, protects a business against being sued by its employees and is a legal requirement.

Most commercial liability insurance is sold by trade or professional type with risks and covers that are specific to that business type. Additional liability insurance such as professional indemnity insurance which covers professionals against negligent advice or product liability for shops providing goods, are examples of such.

Buying a combined tradesman or professional service stand-alone liability product is today a simple process using one of the many liability insurance comparison websites that exist online.

It is possible to buy commercial insurance for both liability and property combined for any type of business, under what is called a ‘combined commercial insurance policy’. This type of flexible contract allows specific risks to be added and limits of indemnity chosen and is often known as ‘all risks’ cover.

For specific types of commercial insurance risks such as shops and offices, where property values and liability cover can be easily assessed, it is now possible to compare many covers and buy online what are known as packaged policies.

The Internet offers many full ‘all risks’ commercial insurance policies covering every eventuality and consequential loss, which are available from online insurance brokers, comparison sites and direct from commercial insurance companies themselves. If you have any doubts about the necessary cover for your particular business it is advisable to consult a commercial insurance broker who will offer advice and the latest market information.