Commercial Insurance Information
Owning a business is more than your “job” – it’s a large part of your life. It takes vision, dedication, and planning. We understand the entrepreneurial spirit, because we’re an owner-led business, too! Let the Helwig Agency help you make sure all your commercial insurance needs are covered, so that you can focus your time and energy where it matters most: running and growing your business.
Whether your business is small or large, new or older, here are some commercial insurance basics to consider. Call or email us today to schedule your in-person appointment so that we can get to know you and your business. We’ll recommend the coverage that best fits your needs and budget.
I’m a business owner looking for a basic starting point for coverage. What do you recommend?
Standard “BOPs” (Business Owners Policies) usually cover general liability insurance and personal property and/or buildings owned or used by the business. They’re a good place to start, and can be customized to fit your needs. There are also many kinds of additional insurance options for the business owner to consider.
What are the most common types of coverage in a Business Owners Policy (BOP)?
Property – Your commercial property insurance is very important. This coverage compensates your business if the property used in the business is lost or damaged as the result of various types of common perils, such as fire or theft. Property insurance covers not only a building or structure, but also “personal property,” such as office furnishings, inventory, raw materials, machinery, computers, and other items. Expanded types of property coverage are also available depending on the policy.
General Liability – This is a basic policy that protects you in the event that you cause bodily injury and/or property damages during the course of your normal business operations. An example would be if your business were to be sued because a customer claimed that it caused them harm as the result of a defective product, an error in service, or disregard for another person’s property. Liability insurance pays damages for which your business is found liable, up to the policy limits, as well as attorneys’ fees and other legal defense expenses. It also pays the medical bills of any people injured by, or on the premises of, the business.
Business Auto – Does your business use any type of motor vehicle? If so, business auto coverage might be necessary. We can help you get practical coverage for anything from standard company cars to commercial vans and trucks. Business auto insurance generally pays any costs to third parties resulting from bodily injury or property damage for which the business is legally liable, up to the policy limits.
As with personal auto insurance, your business auto policy can also provide comprehensive and collision protection. Here are the most common types of automobile insurance coverage:
• Bodily injury liability protects your business (“named insured”) in the case of injuries suffered by others in an accident caused by you or your employee while driving a business vehicle; it can also provide coverage to defend your business if it is sued as a result.
• Medical payments or Personal Injury Protection (PIP) is for treatment of injuries to someone employed by your business (as the driver of a business vehicle), and the passengers of the vehicle. (Note that if the injured person is an employee and operating a vehicle for business purposes, workers’ comp would be the primary coverage.)
• Property damage liability protects you from liability related to damage that you or your employee, while operating a vehicle for business purposes, cause to someone else’s property.
• Collision coverage is for damage to your business vehicle from a collision.
• Comprehensive coverage pays for damages to your business vehicle resulting from a covered loss “other than collision.” These loss types include fire, theft, vandalism, or contact with persons, animals, birds, or falling objects.
• Uninsured motorist/ Underinsured motorist coverage is insurance you can add to your commercial auto policy to protect your business, and your employees, against people who do not carry insurance or do not carry adequate limits. Essentially, uninsured/underinsured motorist is liability insurance that you purchase on behalf of that other driver. (Note: in the state of Pennsylvania you have the right to refuse coverage, but you must do so in writing).
Workers’ Compensation – This coverage, a requirement if you have any employees in the state of Pennsylvania, is generally referred to as “workers comp.” It pays for reasonable medical expenses and replaces a portion of lost wages for an employee who is injured in the course of employment, regardless of who was at fault. When a worker dies as a result of injuries sustained while working, the insurance may provide compensation to the employee’s family.
There is a great deal of confusion when choosing an “employee” classification vs. an “independent contractor.” This designation determines your workers’ comp insurance obligations as well as how you’ll handle many payroll and tax issues. If you are a business owner hiring or contracting with other individuals to provide services, you must determine whether the individuals providing these services are employees or independent contractors. If a worker is an employee, you as the employer must withhold income taxes, withhold and pay Social Security and Medicare taxes, and pay unemployment tax on wages (among other things). If a worker is an independent contractor, you generally do not have to withhold or pay any taxes on payments to that worker. You also do not need to carry workers’ comp insurance for independent contractors. Not sure how to tell the difference? We advise that you consult a trusted tax professional when making these determinations. For more information, please visit https://www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-self-employed-or-employee.
Workers’ compensation premiums are largely based on the amount of payroll a business runs annually. The business owner will provide an estimated payroll amount to the insurance company, which is used to calculate the premium. The annual premium audit (also known as the payroll audit) determines your actual premium owed for the policy period. You then receive either a refund, or an invoice for any additional payment owed, based on how the estimate and the actual numbers compare. If you want to avoid overpaying or underpaying, many insurance carriers are now offering a “pay as you go” workers’ comp plan, with a monthly reporting form. Ask us for more information.
What other types of liability coverage does my business need?
Employment Practices Liability – This option covers (up to the policy limits) damages for which an employer is legally liable. These may include violating an employee’s civil or other legal rights. In addition to paying a judgment for which the insured is liable, it also provides legal defense costs, which can be substantial even when there has been no wrongdoing.
Bonding – When a business is marketed as “bonded,” this often means that it has purchased a type of surety bonding. Many occupations require a license, and a surety bond may be required to guarantee that the bonded business obtains the license, and then follows its rules. Should the business break these rules, a claim could be filed on the bond. In other words, surety bonds create a potential liability for your company, but are required of you by a third party (typically the government) to do business. There are thousands of surety bond requirements throughout the United States.
The Helwig Agency can help you with a variety of bonds, including Court Order Bonds, Administrator’s Bond, Estate, Public Official Bond, and more. In addition, we offer Contractor’s Bonds, such as Performance Bonds and Road Bonds. Another type of bonding is “fidelity bonding.” It provides insurance for your company against employee dishonesty and theft. Bonding can be a complex issue with many factors to consider; we’ll help guide you through the process.
Directors & Officers Liability – Directors and officers liability insurance protects directors and officers of corporations or not-for-profit organizations if there is a lawsuit claiming they managed the business or organization without proper regard for the rights of others. The policy will pay any judgment for which the insured is legally liable, up to the policy limit. It also provides for legal defense costs, even where there has been no wrongdoing.
Errors & Omissions Liability – Some businesses involve services such as giving advice, making recommendations, designing things, providing physical care or representing the needs of others. These services, unfortunately, can lead to being sued by customers, clients, or patients claiming that the business’s failure to perform a job properly has injured them. Errors and omissions, or professional liability insurance, covers these situations. The policy will pay any judgment for which the insured is legally liable, up to the policy limit. It also provides legal defense costs, even when there has been no wrongdoing.
Umbrella – As the name implies, an umbrella liability policy provides coverage over and above a business’s other liability coverages. It takes over when basic coverage has been exhausted, and is designed to protect against unusually high losses. For a typical business, the umbrella policy would provide protection beyond general liability and auto liability policies.
Are there any other specialty coverage options that I need to consider?
Depending on the industry your business is in, and where you’re located, you may also benefit from other specific types of coverage. Ask us for more information!
Flood – Natural disasters can be devastating to business. Your commercial property insurance generally covers natural events such as lightning or wind, but flood protection requires a special policy. So what constitutes an actual flood? First, it’s important to understand the general guideline that if water comes “from above” (i.e. from rain or melting snow overflowing gutters and leaking onto your inventory), you may be covered by your standard commercial property insurance.
Flood insurance is different. It generally includes losses resulting from water overflowing rivers or streams, heavy or prolonged rain, storm surge, snow melt, blocked storm drainage systems, broken dams or levees, or other similar causes. To be considered a flood, waters must cover at least two acres or affect two properties. However, flood insurance has its limits. Property outside your building (like landscaping and sewer systems, for example) generally will not be covered by your flood insurance. Keep in mind, too, that flood insurance will not cover damage to your business vehicles; however, this can be included in the optional “comprehensive” portion of your business vehicle insurance. Financial losses caused by business interruption or loss of use of insured property are also not covered by flood insurance.
The most important factor here is location. Is your business located in or near a flood zone? In what part of the building is your businesses equipment and inventory located? Anything housed on a lower floor, for instance, will be at greater risk. We can help you determine your flood risk, and then discuss with you how to obtain appropriate coverage for events related to flooding and its aftermath.
Crime – No one likes to imagine being the victim of a crime, but it’s important to be protected in the event that this happens to your business. A crime policy provides protection from losses resulting from business-related crime. This may cover merchandise, as well as losses incurred when a company is victimized by someone perpetrating embezzlement, forgery, robbery, securities theft, or another form of business-related crime.
Equipment/Inland Marine – This is commercial insurance for property in transit over land, as well as certain types of moveable property. Inland marine insurance covers products, materials, and equipment when transported over land (such as via truck or train) or while temporarily warehoused by a third party. Collisions and cargo theft are the two most frequent causes of inland marine losses. If your business frequently ships high-value products or equipment, you may want to consider purchasing inland marine insurance. High-value products or materials include computers, communications and networking equipment, construction/contracting equipment, medical/scientific equipment, and photography equipment, among others. We can help you determine if this additional coverage is a good fit for your business.
Boiler & Machinery – Don’t have a boiler? You may still need this type of commercial insurance! That’s because this longstanding type of coverage has been modernized and is now also referred to as “equipment breakdown.” It’s a policy that provides coverage for physical damage to, and financial loss from, equipment breakdown. Generally, it covers the cost of repairing or replacing the damaged equipment, as well as business losses incurred from the equipment not functioning. This type of insurance can cover a wide range of equipment types, including HVAC systems, ovens, boilers and furnaces, refrigeration units, elevators, and office equipment.
Whether your business is large or small, the Helwig Insurance Agency is your partner for complete insurance services. We realize that every business is unique, so we want to get to know you and yours. Our job is to identify the best ways to properly insure the specific hazards and concerns that affect you most.
Here’s What Our Clients Say
- Kathy Rhoades, Office Manager, Petroleum Service Partners, Inc
- Evelyn Gill, Getty Well Service LLC
·Boiler & Machinery
·Employment Practices Liability
·Directors & Officers Liability
·Errors & Omissions Liability
·Special Events Coverage
The Helwig Insurance Agency offers customized programs for nonprofit groups, including professional liability policies. In addition, we have specialty programs for truckers, contractors, gas & oil contractors, offices of all types, and restaurant owners.