Commercial FAQ's

Standard Coverages

Q: What types of insurance do I need?

A: This depends on your type of business and whether you have employees, company vehicles, equipment, property, etc.

Any business needs some kind of liability insurance and if you use vehicles for your work, those need to be insured as well. If you have employees, you are required to carry workers compensation insurance. In addition, anything that you own should be insured and it is advisable to have business interruption coverage. The variables to be considered are different for every business and only your agent can really answer this question.

Q: Do I get discounts if I stay with the same company for a long time?

A: Insurance companies usually do not take "loyalty" into consideration. Even if you have had your insurance with the same company for a while, each year they will re-evaluate whether your business fits their guidelines. You might get a slightly better rate because they already know you and your business, but in general it's just a tie-breaker.

Q: I'm working out of my home. Do I still need business insurance?

A: It depends on the type of business you run. The typical homeowners policy only provides $2,500 coverage for you business equipment. You might also need liability and lost income coverage. Talk to a commercial insurance agent about your needs and shop around.

Additional Coverages

Q: Do I really need Employment Practices Liability or Directors and Officers insurance?

A: The number of lawsuits filed by employees against their employers has risen considerably in the past. Although it is true that most of those lawsuits were filed against large corporations, no company is immune to this risk.

Q: Who needs Errors and Omissions coverage?

A: There is no straight answer to this question. Per definition, any professional can be sued for an error or omission. The problem here is the word "professional". A lawyer or physician is a professional, but generally the court decides who is considered a professional. Many business owners think that their General Liability policy covers any kind of liability, but that is not true. Unless you cannot make mistakes in the course of your business, you should consider buying E&O coverage.

Q: I've heard that life insurance can be beneficial to a business. How?

A: The two most common uses for life insurance in a business environment are cross-purchase and key employee plans. A cross-purchase plan, funded by life insurance policies, is used between 2 or more co-owners to buy the shares of a deceased owner, instead of that owner's heirs entering the business.

Key employee insurance helps to keep a business running if an employee, who is vital to the operations and continuance of that business, dies unexpectedly.

New Venture

Q: I'm just starting my business. Do I need to get insurance right away?

A: Yes. Your business operations put you at risk from day one and you need to be insured against those risks. Also, depending on your type of business, there might be coverages you have to have by law.

Q: What types of insurance do I need for a new business?

A: This depends on your business. In general, liability coverage should always be in place to protect you against possible losses and law suits. If you rent or lease property, your landlord might require you to have insurance when you move in. In the State of California, a business owner who has employees, also has to have workers compensation coverage. If you use vehicles at work, you need a business auto policy, etc. An agent can do a risk assessment for you and explain to you the different types of coverages.