Commercial Insurance Law

Commercial business insurance is a specific type of insurance coverage, intended for businesses and corporations. This type of insurance is generally intended to cover the business, as well as its employees and ownership.

In general, commercial insurance helps protect businesses against risks that could threaten its success. Depending on the amount of coverage, a commercial insurance plan can be used to protect the reputation, wellbeing, and finances of a business entity, as well as the employees who are working for that business.

Opposite of personal insurance, commercial insurance can cover multiple stakeholders and employees. Additionally, commercial insurance generally has much higher limits of coverage, due to the fact that there is generally more physical property at risk.

Something else to consider is that commercial insurance carriers and agents are specifically trained in terms of the risks and threats that businesses commonly face. Insurance plans are structured in order to meet a company’s specific industry and day-to-day needs. This is in contrast to personal insurance plans, such as auto or renters insurance, which tend to generally employ a uniform purchase process.

The most common type of losses include property damage, such as those caused by natural disasters, or liability insurance when the business is being sued. Liability insurance is a specific type of commercial insurance, or business liability insurance. This type of coverage protects businesses and business owners from legal claims associated with the operation of their business.

General liability insurance usually covers claims associated with:

• On-premise injuries, such as slip and fall injuries;
• Copyright, trademark, and various other intellectual property claims;
• Claims related to marketing, such as loss of business reputation, slander, and false advertising claims; and/or
• Some class action claims, such as those involving toxic torts.

Different Types of Business Insurance

There are some different types of business insurance. The specific type of business insurance that you will need for your business will vary according to what specific type of business you own. Some examples of insurance that may provide coverage for your business include, but may not be limited to:

• Business Income: Also referred to as business interruption insurance, this type of insurance replaces business income that is lost after an insured disaster. This type of insurance is not generally sold as a separate policy, but rather is added to a property or casualty policy. Alternatively, business interruption insurance may be included in a comprehensive package policy;
• Commercial Auto: Commercial auto insurance covers incidents involving your business’ vehicles and drivers, such as break-ins or fender-benders. Commercial vehicle insurance covers physical damage and liability coverages for those amounts, situations, and usages that would not be covered by a personal auto insurance policy. Additionally, this type of business insurance covers a wide variety of commercial vehicles, from vehicles used for business purposes to commercial trucks and vehicles;
• General Liability: As previously discussed above, this type of insurance protects a business from injuries by non-employees that are sustained on the business property;
• Crime: Business crime insurance covers the loss of merchandise and other business assets due to burglary, robbery, larceny, forgery, and embezzlement. This type of insurance may also be referred to as commercial crime insurance, and must be purchased separately due to the fact that business crimes are not covered by commercial property insurance policies;
• Worker’s Compensation: All fifty states require employers to have workers compensation insurance. This covers an employee if they are injured while performing their work duties while on the job. An employee who is injured while on the job is guaranteed benefits, regardless of who was at fault for the injury. In return for workers’ compensation benefits, employees generally forfeit the right to sue their employer for damages for their injuries;
• Property: Known as commercial property insurance, this type of insurance covers most real property and other items associated with normal business operations. Some examples of this would be lighting systems, heating/ventilation systems, machinery used for your business, office furniture, computers, printers, and laptops, as well as inventory and supplies. Simply put, commercial property insurance protects a company’s physical assets; and/or
• Commercial Umbrella: Commercial umbrella insurance provides extra coverage to assist in covering costs resulting in any excess liability, should liability insurance you already possess fail to fully cover the damages. An example of this would be if someone slips and falls in your store, and you are found to be liable for $150,000 worth of damages. However, you only have liability insurance for up to $100,000. As such, the additional $50,000 may be covered by your umbrella policy.

A business insurance claim is a formal notice that you give to your insurance company. This informs them that you have suffered a loss that you believe entitles you to some sort of compensation. Once you file your claim, your insurance company is required to investigate it and compensate you for the financial harm you have suffered, assuming that the payment is justified according to the terms of the insurance policy.

What Doesn’t Commercial Insurance Cover?

Commercial insurance does not cover liability resulting from your negligence, nor does it provide coverage in states in which strict liability is assessed.

Negligence is the legal theory allowing injured people to recover for the carelessness of others. A person is considered to be negligent if they were careless, given the circumstances of the situation. The obvious example of negligence would be personal injury; however, negligence is a flexible idea that can appear in many different contexts.

Strict liability is the legal doctrine that holds a party responsible for their actions or products, without the plaintiff needing to prove negligence or fault. When someone partakes in ultrahazardous activities such as making defective products, they may be held liable if someone else is injured.

How Can I Obtain Commercial Insurance? How Much Coverage Do I Need?

In order to get business insurance, you will need to contact a licensed insurance broker or agent. They can assess how much coverage would be sufficient for your business needs.

Commercial General Liability, or “CGL”, refers to a type of commercial insurance policy that most businesses need. CGL covers basic bodily, physical injuries, as well as various property damage claims.

CGL is generally purchased by the business entity, along with property insurance. These packages help protect the business against common incidents and injuries that may happen on the business property, or at other locations that are also owned by the company.

In terms of how much coverage you will need, you will need to assess the nature of your business. An example of this would be how when considering how much liability insurance you need, you should evaluate:

• Your professional duties;
• The use of the premises; and
• The number of people accessing the property.

In terms of property insurance, consider your contractual obligations as well as the value of the property that is to be insured. You should also consider any insurance requirements mandated by state law.

What To Do If Your Claim is Denied

If you are dealing with a denied commercial insurance claim, you should first check your policy to ensure that your claim is covered. If it is in fact covered, you should file an immediate appeal.

Should your insurance company still refuse to cover your claim, you should consider taking legal action against your insurance provider.

Should I Hire a Lawyer?

If you are a business owner with questions or issues associated with commercial insurance, you will need to consult with an experienced local insurance lawyer. An attorney can help you understand your needs, as well as what may be required of you according to your state’s specific laws. Your business attorney will also be able to represent you in court, as needed.