Flood Insurance for Florida
Homeowners, Renters, and
Business Owners in Tampa,
Orlando, Tallahassee,
Jacksonville, Panama City,
and All Other Areas of
Florida.
TYPES OF POLICIES
All businesses need
property/casualty insurance
coverage. The “property”
component protects against
damage to or loss of the
business’s property. The
“casualty” or liability
component provides
protection against legal
liability for damages caused
to other people or their
property. A wide variety of
lines of business fall into
these broad categories. See
Commercial Insurance for
financial data on the major
property/casualty insurance
lines.)
PACKAGE POLICIES
Commercial insurers sell
coverages separately and/or
offer policies that combine
protection from most major
property and liability risks
in one package. Package
policies are created for
businesses that generally
face the same kind and
degree of risk
Business Owners Policy
Smaller and mid-size
companies often purchase a
package policy known as the
business owner’s policy or
BOP. BOP coverage includes
property insurance for
buildings and contents owned
by the company, and
liability protection to
cover a company's legal
responsibility for the harm
it may cause to others.
There are two different
forms, standard and special,
which provides more
comprehensive coverage. A
key option is business
interruption insurance, a
form of property insurance
that covers the loss of
income resulting from a fire
or other catastrophe that
disrupts the operation of
the business. Business
interruption can also
include the extra expense of
operating out of a temporary
location. Costs due to
business interruption can
exceed the property damage
that caused the business to
shut down.
BOPs do not cover
professional liability, auto
insurance, workers
compensation or health and
disability insurance.
Businesses need separate
insurance policies to cover
professional services,
vehicles and their
employees’ health/disability
needs.
Home Businesses
Most of America's 11 million
home-based businesses are
vulnerable to significant
financial losses because
they do not have the proper
business insurance coverage,
according to a survey by the
Independent Insurance Agents
& Brokers of America.
Several insurance companies
have developed special
package policies to address
the special needs of home
businesses. Home
entrepreneurs have other
options for coverage,
including BOPs, or
“incidental business
endorsement", a special form
that attaches to an existing
homeowners policy.
Commercial Multiple Peril
Policies
Larger companies might
purchase a commercial
package policy or customize
their policies to meet the
special risks they face.
Commercial multiple peril
policies, often purchased by
corporations, bundle
property, boiler and
machinery, crime, and
general liability coverage
together.
CLAIMS MADE VS. OCCURRENCE
POLICIES
Liability insurance protects
the assets of a business
when it is sued for
something the business did
(or failed to do) that
caused injury or property
damage to someone else. A
business’s liability
exposure includes not only
paying damages and perhaps a
penalty as the result of a
successful lawsuit against
it, but it also includes
attorney’s fees and other
costs involved in defending
a company against a
liability claim. Liability
coverage may be purchased as
part of the package policy,
such as the BOP, or the
commercial multiple peril
policy, or as a separate
liability policy known as a
commercial general liability
insurance policy (CGL).
Insurance companies write
CGL policies in two ways: as
an “occurrence” policy or a
“claims made” policy.
Most CGL policies are
written with what is called
an “occurrence trigger.”
This means that the CGL
policy in effect at the time
the alleged injury or
property damage occurred is
the policy that covers that
event, regardless of how far
back that event was from the
time the claim is filed, or
whether the same insurance
company is currently
insuring the defendant. For
example a person might slip
in a shoe store, but not
experience severe back pain
until several months after
the fall. By this time, the
store might have switched
insurers. However, the claim
will be handled by the
company that was the store’s
insurer at the time the fall
occurred.
CGL policies may also be
written on a “claims made”
basis. This means the
current liability insurer is
responsible for claims made
during the policy period,
even though the event that
gave rise to the claim
occurred in a prior year. In
the above example, the shoe
store’s current insurer
would be responsible for the
claim. The claims made
policy is used for only a
small percentage of
liability insurance, mainly
for medical malpractice and
other types of professional
liability.
LOSS SENSITIVE PLANS
Two major forms of insurance
approaches used in providing
workers’ compensation are
guaranteed cost plans and
loss-sensitive plans.
Businesses with guaranteed
cost insurance policies pay
guaranteed, fixed premiums
for the policy period,
regardless of the losses
that occur during this
period. In effect, the
business transfers the
expenses associated with its
losses to the insurance
company. With loss sensitive
insurance coverage, the
company shares the burden of
its loss expenses with the
insurer. These plans are
frequently referred to as
retrospective policies,
because the amount the
company pays for insurance
during a set period is based
on the losses sustained
during that same period.
Generally a retrospective
policy establishes set
minimum and maximum premium
levels. If a company is
successful in controlling
accidents and associated
expenses, then its final
premium will near the
minimum level. If it
experiences major losses,
its final premium will be
closer to the maximum level.
Loss sensitive plans give
businesses a strong
incentive to take steps to
reduce claims via loss
control efforts. The plans
are also used for general
liability coverage.
LARGE DEDUCTIBLE PLANS
Large deductible policies
are designed to give
employers that are willing
to retain most of the claims
risk an option that reduces
their insurance costs. The
deductibles are generally in
amounts of $100,000 or
higher. Large deductible
programs, which were first
introduced in 1989, are used
by many companies for their
workers compensation
insurance, as a way of
making costs more
predictable. Like
retrospective policies, they
give employers a strong
financial incentive to
control losses.
CRIME INSURANCE
Most businesses are
vulnerable to losses from
crime. Typical commercial
property insurance policies
exclude losses of money and
securities due to any peril
and often do not insure
inventory, equipment and
other types of property
against theft. These loss
exposures are covered by
crime insurance. Coverage
for crime losses whether by
outside or inside thieves
(e.g. embezzlers) may be
included in a package policy
or the insured business
owner may purchase any one
of a number of separate
policy configurations to
protect against these
losses. As in other areas,
the business owner needs to
work with the agent or
broker to determine the best
coverage and the amount of
coverage needed for the
particular business.
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