Insurance Executive Overview & Primer for Concierge Magazine Readers

By: Warren Wettenstein ¦ Wettenstein Insurance ¦ https://www.ourinsuranceguru.com

Business Owner Policy (BOP) is a popular package combining Commercial General Liability (CGL) and Property Insurance. It may include Liability, Business Personal Property (computers, inventory, furniture), Lessor Coverage (required by landlords from tenants), Tenant Improvements, Cyber, Employment Practices, Business Interruption, and Additional Insureds. Most BOPs focus on a particular business risk category - a real estate office faces different risks than a restaurant, and their BOP should reflect that uniqueness. Basic coverages and deductibles can be adjusted. Since each carrier has a BOP version and preferred target customers, always ask if your business fits into their particular “appetite.” If not, you may be misplaced generically as Not Otherwise Classified (NOC), priced higher to discourage you, or even declined to quote. When adding special coverages, they are called Endorsements. Certificates of Insurance validate policyholder coverage to landlords and clients, sometimes at no cost, depending on policy/carrier/agency.

Professional Liability (PL), also referred to as Errors & Omissions (E&O) or Medical Malpractice, is not included in BOPs. PL is imperative if you provide a professional service or routinely give advice to clients. For homebased businesses (webmaster), PL may be sufficient for their needs without a BOP. Both PL and BOP are imperative for accounting or medical offices.

Commercial Umbrella adds higher limits over several coverages. It can be a strategic way to increase overall coverage while saving over increased coverage on each category alone.

Commercial Vehicle coverage includes work trucks, but also the vehicles used for the combined business and personal use. If an accident occurs when using a personal-only vehicle for commercial purposes, personal insurance carriers may disallow coverage. Realtors driving clients around should have commercial- and personal-use coverage. Now, due to the National Commercial Motor Vehicle databases, a boating DUI in one state can impact commercial drivers licenses (CDL) in another. Employers need to monitor CDL motor vehicle reports regularly.

Worker’s Compensation (WC) is no-fault coverage for work-related injuries. It is always critical to provide safe working environments. Employers are required to provide WC in most states. Failure to comply can bring a criminal action. While optional in some states, such as Texas, it is recommended to help employees get suitable treatment, back-to-work, and protect employers from lawsuits. Sometimes Owners and Officers may exclude themselves from coverage, thereby lowering their WC premium, but risk no compensation if they too get injured on the job. Rates may be based on job category, payroll, and loss record (claims made). “Experience modifiers” reward established firms are having better than average claims record by lowering their rates. Inversely, firms with high claims records may pay higher rates or be non-renewed by carriers. Hybrid Solutions from multiple carriers may provide better coverage/rates.

Warren Wettenstein is an independent, no-fee insurance broker licensed in multiple states and appointed with top insurance carriers. Wettenstein Insurance, 408 824-1450 www.ourinsuranceguru.com