Business Insurance Arizona can help protect a company from financial loss caused by disasters, accidents and other unexpected events. It can also safeguard against claims of negligence or malpractice.
Several types of business insurance exist to meet the specific needs of different businesses. These include: business property insurance, general liability insurance and commercial auto insurance.
Property coverage provides financial protection if your business’s property is damaged or destroyed. It covers repair or replacement costs as well as additional expenses to get your business up and running again such as renting temporary space, paying overtime workers and extra advertising.
This type of coverage also offers liability protection to protect small business owners against legal claims resulting from accidents and injuries sustained by visitors, tenants or third parties on the premises. Without this type of protection, you could be required to pay hefty legal fees and damages.
Insurance companies market their products in a variety of ways including through independent agents, television commercials, direct mail and web sites. Independent agents represent multiple insurance companies and work for a commission on each policy they sell or service. Most insurance companies offer policies directly to businesses through their own sales offices or through special group insurance trusts.
There are two primary types of commercial property coverage available: special form and broad form. Special form insurance offers the most comprehensive property protection. However, it typically excludes certain perils, which can lead to claim denials if the loss is caused by an excluded event. Broad form insurance is more affordable than special form insurance, but it only offers limited protection for property damage and destruction. A broad form policy can also contain exclusions for items like personal property in transit or borrowed property.
General Liability Coverage
The cost of general liability insurance varies depending on your business size, industry risks and history of claims. A licensed insurance agent can help you determine your risk and recommend a policy that fits your budget. It’s important to re-assess your needs each year. Your insurer may also offer optional coverages like product recall insurance and contractual liability insurance that protect you from claims arising from contract issues.
Almost every business needs general liability coverage, especially if you interact with clients or customers. Liability claims can be expensive and a settlement or judgment could bankrupt your company. General liability is the “just in case” coverage that shields you from financial loss and gives you peace of mind.
It covers bodily injury (like a client or customer falling at your business), property damage, personal and advertising injury (like slander or libel) and the cost to defend against a lawsuit. It excludes workers’ compensation, which should be covered by your state’s workers’ comp insurance program.
Many clients, landlords and government agencies require proof of general liability insurance before working with your business or leasing a commercial space. Your insurer can provide you with a certificate of insurance, which lists your policy’s coverages and limits. You can often request these documents instantly through online customer portals. General liability is often included in a Business Owner’s Policy, which combines it with commercial property coverage.
Business Auto Coverage
Whether you own a large trucking company, operate a fleet of taxis or have a small landscaping business with one van, business auto coverage is essential to protect your business against financial loss from accidents. Depending on your business needs, a business auto policy can include liability, physical damage, uninsured/underinsured motorist bodily injury and medical payments coverage.
Most importantly, a business auto policy provides protection when you or your employees are driving on the job. Whether you’re heading to an important sales meeting, delivering food or picking up supplies, you need to know that your business is covered on the road.
Your insurance agent can help you determine the best course of action to take regarding a business auto policy. They’ll ask questions about how your business uses its vehicles, who will be driving them and if you or your employees ever use personal cars for business-related tasks (if so, you may need a separate hired and non-owned auto insurance policy).
Additionally, your agent can discuss adding coverage for commercial trailers—such as pickup truck utility trailers, large dump truck trailers and special trailers designed to carry equipment. They’ll also review the possibility of adding hired and non-owned auto coverage, which is a separate policy that covers vehicles your employees rent or borrow for business purposes when their own car isn’t available (and your regular business auto policy doesn’t provide coverage). This option may be especially important if you frequently hire independent contractors to work on your projects.
Business Owner’s Policy (BOP)
A business owner’s policy (BOP) bundles commercial general liability and commercial property insurance into a single package for small businesses. BOPs typically cost less than purchasing each policy separately, and they can include optional coverages to personalize the policy for your specific needs.
The commercial property insurance portion of a BOP protects your company’s physical assets like buildings, equipment, and inventory against damage and theft. This can help you pay for necessary repairs or replacements when disaster strikes, such as a natural disaster or a fire. The commercial general liability aspect of a BOP covers your company in the event that a third party sues you for bodily injury or property damage. This includes claims stemming from customer accidents at your business location.
While many small businesses can benefit from a BOP, it’s important to assess your unique risks and the potential threats facing your business. A qualified business insurance expert can recommend the right policies for your business.
In addition to a BOP, you may need specialized policies for certain risks, such as professional liability insurance or errors and omissions coverage (E&O) for service businesses. You may also need commercial auto insurance for vehicles owned by your business and workers’ compensation insurance for employees. NerdWallet’s insurance experts are available to help you select the right coverage for your business. We can also help you save money with a multi-policy discount for multiple types of business insurance.
Business Interruption Coverage
Business interruption coverage helps compensate you for lost revenue when your company’s operations are disrupted. It typically covers operating expenses like rent, utilities, and payroll in addition to extra costs like renting temporary space or hiring temp workers to keep things running while your regular employees are away. It also can cover tax payments that come due, loan repayments that are scheduled to happen in the future (even if the business is not currently bringing in any income), and more.
To qualify for business interruption coverage, a business must experience a direct loss from a covered peril that is listed in its property insurance policy. The interruption must last for a certain period of time, usually 48 to 72 hours, before the business can begin collecting on its lost income. This timeframe is called the restoration period and may differ from one insurance policy to the next.
Because a COVID-19 outbreak or pandemic is not a physical loss, most traditional business interruption policies will not include them as qualifying events. However, it’s important to discuss your specific business and its needs with a professional to ensure that your policy includes the proper protections. A good way to check is by reviewing the policy page by page and asking questions if anything is unclear. It’s also a good idea to have a risk management strategy in place, in case something happens that is not covered by your commercial property or business interruption policies.
Product Liability Coverage
Product liability coverage protects your business from claims that the products you manufacture, sell or distribute cause bodily injury or damage to others. It also covers any judgments, rulings or settlements for which your business might be held responsible. You can purchase this type of protection as a stand-alone policy or as an endorsement to your general liability policy.
Whether you manufacture your own products or work with wholesalers, distributors and online sellers, this insurance is important. Manufacturers often have the highest exposure due to their direct contact with consumers, but even retailers can find themselves named in lawsuits related to defective products.
Manufacturing defects include issues such as using the wrong materials or assembly errors, while marketing defects involve failure to adequately warn or instruct on a product’s use. These types of errors can have a huge impact on your reputation, operations and financial stability. It’s important to carefully weigh the benefits of this insurance against the cost.
The amount of coverage your business requires varies depending on many factors, including the size and risk level of the company, the type of product you make and your claims history. A qualified Tivly agent can help you review your potential risks and liabilities to determine the appropriate amount of protection for your business. This process can take a little time, but it’s worth it to have peace of mind knowing you have a policy in place that’s right for your company.