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Depending on the individual risk characteristics of your business, your Sebrite Agency agent will present you with different coverage options for purchasing commercial insurance. An agent's proposal is just that, a proposal. When all is said and done it is your responsibility to make an informed decision and choose the insurance that best fits your business plan. The relationship that you build with your agent is extremely valuable in this critical decision making process. An experienced Sebrite agent has dealt with hundreds of businesses similar to yours. Since commercial insurance can be complicated, you should feel free to discuss any terms, conditions, or concepts that are unclear to you with your agent. It is part of our agent's service to answer your questions and help you understand the insurance you are purchasing. While your business may not need all commercial coverage lines, it is a good idea to have a basic knowledge of the types of insurance coverage available. As your business changes and expands you will have the necessary knowledge to purchase insurance coverage as new exposures arise. The following commercial lines of insurance cover broad areas of exposure common to most business operations:
Commercial insurance is divided into two main categories: property insurance and casualty insurance. Property insurance provides coverage for property that is stolen, damaged, or destroyed by a covered peril. The term insurance includes many lines of available insurance. Commercial Property, Inland Marine, Boiler and Machinery, and Crime are the most common commercial property coverage lines Each of these property coverage lines is described below. Buildings you own or lease as a part of your business, your business personal property, and the personal property of others make up the basic coverage sections of commercial property insurance. Commercial property insurance can be sold separately as an individual line policy, (referred to as a monocline policy), or it can be sold as part of a Commercial Package Policy (CPP), which combines two or more commercial coverage parts such as commercial property, general liability, and commercial auto. Building coverage includes buildings or structures and any completed additions, which are listed on the declarations page of a commercial policy. Permanently installed fixtures, machinery, and equipment are also insured as a part of building coverage. The limit of insurance is the estimated amount needed to rebuild your building and to replace permanently installed fixtures, machinery, and equipment in the event of a total loss. You are required under the insurance policy to fully insure the value of your buildings. If a building is not insured to value, you can be subject to a monetary penalty at the time of a loss. This penalty is commonly referred to as coinsurance. It is important to read and understand the coinsurance clause of your commercial property policy and to discuss any questions with your agent. Business Personal Property consists of furniture; fixtures, machinery, and equipment not permanently installed; inventory; or any other personal property owned by and used in your business. Personal Property of Others refers to property that is in your business's care, custody, and control. The type of business you operate will determine if you need to protect the personal property of others. Covered Causes of Loss Whether or not a property loss is covered depends upon the policy language, exclusions, and endorsements. You can choose the covered causes of loss in your property policy. Causes of loss are divided into two main categories: specified perils and open perils. Specified Perils consists of a list of each peril to be insured against, such as fire, explosion, windstorm, vandalism, et cetera. You can usually request basic specified perils or broad specified perils coverage. Broad specified perils coverage adds to the list of covered perils found under basic specified perils. Open Perils coverage covers all losses unless they are specifically excluded. Earth movement (including earthquake) and flood are two common perils that are excluded under open perils coverage. Since open perils coverage offers more comprehensive protection, it is more costly than a specified perils policy. Valuation Types Commercial property coverage will include a provision to determine what valuation method is to be used to pay the loss. The most common policy valuation method is Actual Cash Value (ACV). Unless otherwise defined in the policy, ACV is considered to be Fair Market Value. There are two other methods of property valuation: agreed value and replacement cost. Agreed value waives any coinsurance penalty and pays 100% of the stated amount (agreed upon amount) for any covered loss. Replacement cost covers the amount it takes to replace your property with new property of like kind and quality up to the limits of insurance. Like ACV, replacement cost is subject to coinsurance. Coverage Forms and Endorsements There are various coverage forms and endorsements in addition to the basic property coverage's already discussed that can customize coverage in a commercial property insurance policy. The following are the most common coverage forms and endorsements used in commercial property insurance: Builders Risk Added to a policy for one year minimum term to cover a new building structure under construction or an existing structure undergoing additions, alterations, or repairs. Cancellation is allowed on a pro rata basis upon project completion; however, midterm cancellation will result in a short rate penalty. A reporting form or renovations form allows coverage to be carried according to the stage of completion (i.e., as more of the project is completed, more value is reported, resulting in the proper amount of coverage for each stage of construction). Legal Liability or Fire Legal Liability - Cover's your legal liability for loss or damage to real and personal property of others as the result of your negligent acts and/or omissions. The loss or damage must be caused by a covered peril (including loss of use). The loss must be accidental and the coverage most often is purchased for tenants in commercial buildings. Building Ordinance - Provides coverage if the enforcement of any building, zoning, or land use law results in loss to the undamaged portion of the building (Coverage A); demolition and removal costs of undamaged parts of the structure (Coverage B); or any increased cost of repairs or reconstruction (Coverage C). Replacement cost must be in effect for Coverage C to be applied. Glass - Basic specified perils for glass coverage include any resulting damage to other property from broken glass due to vandalism and also vandalism to glass building blocks. Broad and specified perils covers $100 per pane of glass up to $500 per occurrence. A glass form must be added for scheduled glass coverage when there is a significant glass exposure to insure. The glass form includes the number of panes, dimensions, location, lettering, and ornamentation. A separate glass deductible may be scheduled as well. Peak Season - An endorsement that provides additional limits on personal property inventory during a designated period of time. This is specifically used to cover fluctuating inventory values before and during peak shopping seasons. Inflation Guard - Automatically adjusts the limits of insurance to keep up with inflation. The adjustment can be tied to the construction cost index in a regional area or a specified percentage per year. This endorsement can be very important in helping to maintain adequate coverage limits, which can protect against potential coinsurance penalties in a property loss. Time Element - Insurance that covers other losses stemming from a direct loss by a covered peril to business property. Business interruption, extra expense, and loss of rents and rental value are the most common time element coverage's. Business interruption coverage replaces lost business income after a covered loss. Certain key employees can be named, allowing the employer to continue to pay their salaries until the business restarts operations after a loss. Extra expense coverage mainly applies to service or product related companies where the business must continue to ensure the survival of the company. Extra expense can pay for office space, equipment rental, advertising, or most costs considered reasonable for keeping the company operating after a covered loss. Loss of rents and rental value cover loss of rental income to the property owner caused by damage or destruction of a building rendering it unfit for occupancy. Without prior knowledge of inland marine insurance, it is easy to assume that this insurance line has something to do with boating transportation. In fact, inland marine insurance can cover a variety of transportation exposures; however, it does not cover boating transportation, which is covered under ocean marine insurance. Inland marine is a specialized type of property insurance that primarily covers damage to or destruction of your business property while in transport. Inland marine also covers the liability exposure for the damage or destruction that may occur to property in your care, custody, or control during transport. Covered Causes of Loss Standard perils in Inland Marine may include fire, lightning, windstorm, flood, earthquake, landslide, theft, collision, derailment, overturn of the transporting vehicle, and bridge collapse. Coverage Forms and/or Specialty Coverage's Inland marine has great flexibility in covering many potential transportation risks. Some of the most common types of coverage offered are accounts receivable insurance, consignment insurance, equipment floaters (i.e., contractors equipment), installation floaters, motor truck cargo insurance, trip transit insurance, and valuable papers (records) insurance. If you have questions regarding what inland marine insurance can cover, and if it is right for your particular business, then contact your agent for further information. Boiler and machinery insurance can add an important layer to potential insurance coverage. Boiler and machinery insurance is currently marketed under such names as 'systems protector, systems breakdown, and ¦machinery breakdown insurance. Boiler and machinery insurance covers business property, other property losses, and legal fees (if any) that may result from the malfunction of boilers and machinery. Boiler coverage includes covering the costs of inspection and often maintenance of boilers. Machinery coverage can include many different types of machines used in retail, office, and manufacturing settings. Machinery coverage also includes major machinery systems common to most commercial buildings, such as heating, ventilating, and air conditioning systems. Since most commercial property policies exclude losses from boilers and machinery, it is important to be aware of any exposure your business may have and discuss it with your broker-agent. Crime insurance provides protection for the assets of your business including merchandise for sale, real property, money and securities. It is considered a property insurance line. Based on the crime coverage that you purchase, it is possible to be covered for the following causes of loss: robbery, burglary, larceny, forgery, and embezzlement. Specialty coverage parts can be added based on need and exposure to loss such as mercantile open-stock, burglary insurance, mercantile robbery insurance, mercantile safe burglary insurance, money and securities broad form policy, office burglary and robbery insurance, and storekeepers burglary and robbery insurance. Casualty insurance provides coverage primarily for the liability exposure of an individual, business, or organization. Liability from the negligent acts and omissions of an individual, business, or organization that causes bodily injury and/or property damage to a third party is the subject of casualty insurance coverage. Commercial Automobile, Commercial General Liability, Commercial Umbrella, and Workers Compensation are the most common business casualty insurance lines. Coverage, Classification, and Limits of Insurance Commercial automobile coverage is similar to the coverage you may carry on your personal auto; however, commercial automobile exposures can be more complex requiring specialty coverage's to be considered based on the individual needs of your business. Basically, commercial auto coverage can protect your company from any liability stemming from automobiles used in your business or any damage to the covered automobile. A Business Auto Policy (BAP) has the flexibility to provide coverage for business, personal, non-owned, or hired autos based on the coverage purchased and applied to each scheduled auto. In other words, automobiles can be separately scheduled along with corresponding coverage's. Coverage can differ by vehicle and a symbol or multiple symbols will designate the coverage assigned to a scheduled auto. These symbols are referred to as covered auto symbols and use a simple numerical system (1-13). The automobiles are classified by weight (light, medium, heavy, extra heavy) and by type of use (private passenger, service, commercial). Unlike personal auto policies that separate bodily injury and property damage limits (split limits), BAP's commonly utilize a Combined Single Limit (CSL) for the limit of insurance. This creates higher limits for the both coverage's, including per occurrence limits. Common commercial automobile CSLs are $500,000 or $1,000,000. Coverage One of the key concepts of liability coverage is that it is comprehensive in nature. What this means is that the policy (insuring agreement) covers all hazards within the scope of the insuring agreement that are not otherwise excluded. It is likewise comprehensive in that it provides automatic coverage for new locations and activities of your business, which come about after policy inception and throughout the policy term. Commercial General Liability (CGL) is the standard commercial liability policy used to insure businesses. There are three primary coverage sections that make up a CGL policy: premises liability, products liability, and completed operations. Premises liability covers liability for accidental injury or property damage that results from either a condition on your premises or your operations in progress, whether on or away from your premises. A products liability hazard exists for any business that manufactures, sells, handles, or distributes goods or products. The hazard being the potential liability for bodily injury or property damage that arises out of your goods or products. Completed operations covers your potential liability for bodily injury or property damage that arises out of your completed work. The major exclusions under a CGL policy include: intentional injury; insured contracts; liquor liability; workers co and employers liability; pollution; aircraft; automobile; watercraft; mo bile equipment; war; care, custody, and control; damage to your work; impaired property; sistership liability; and failure to perform. It is always important to read and understand all coverage exclusions; however, it is particularly critical in a liability policy. If you do not understand the coverage exclusions or limitations of the CGL policy, then contact your agent and discuss completely until a working understanding is achieved. Classification The type of business you run determines how a CGL policy is classified. Generally speaking, a specific code or codes (in some situations) are assigned based on exposures that are common to your type of business operation. The way a business risk is classified is the first step to determine premium and an important part to the rating formula. Limits of Insurance The CGL policy has separate limits of insurance for general liability, fire legal liability, products and completed operations liability, advertising and personal liability, and medical payments. An aggregate limit of liability is in force for the general liability, fire legal liability, advertising and personal liability, and medical payments claims. When total claims for all these areas exceed a stated annual aggregate limit of liability, the policy limits are exhausted and no more claims will be paid from the policy for the duration of the policy period. There is also a separate aggregate limit of liability in force for products and completed operations liability claims. When a liability claim goes above the aggregate limit of liability, the policy limits are exhausted. By purchasing a commercial umbrella, you can protect your business from being liable for this excess liability judgment. A commercial umbrella covers the amount of loss above the limits of a basic liability policy. Commercial automobile, CGL, workers compensation, or any liability policy can be covered by a commercial umbrella. A commercial umbrella may also provide coverage if a basic liability policy is not in force. Also, commercial umbrellas can provide coverage for gaps in coverage under basic liability policies. When a commercial umbrella provides coverage for basic liability loss it does not pay the loss from the first dollar. It is common to have a Self-Insured Retention (SIR) amount of at least $10,000. SIR is similar to a deductible. If there is a commercial loss and there is no corresponding underlying policy in force, you must pay the first $10,000 of the loss before the umbrella policy responds. When an employee suffers a work related injury or illness, workers compensation insurance steps in to provide benefits based on the type of illness or injury sustained. Workers compensation is based on a no fault system, which means that an injured employee does not need to prove that the injury or illness was someone else's fault in order to receive workers compensation benefits for an on-the-job injury or illness. Workers compensation insurance is divided into two coverage sections. In workers compensation part one the insurance company agrees to promptly pay all benefits and compensation due to an injured worker by workers compensation laws of the states listed on the declarations page of the policy. In employers liability part two the employer is protected against situations where an employee can sue for injuries suffered under common law liability (i.e., consequential bodily injury, loss of consortium, dual capacity, or third party over actions). These types of injuries in the course of employment are not covered under workers compensation law and are therefore not compensable under the workers compensation part one Classification and Rating Classification of workers compensation insurance is based upon the specific duties that your employees perform in the course of their employment with your company. These classifications are developed and assigned by the Workers Compensation Insurance Rating Bureau (WCIRB) in most cases. Your workers compensation insurance company when working with the WCIRB must use the classification codes the WCIRB provides when rating your specific policy. Each classification is assigned a specific rate by the insurance company, which helps determine the overall premium for your policy. The WCIRB also generates the experience modification that must be applied to your policy. The experience modification is calculated from loss information your insurance company is required to submit to the WCIRB on an annual basis. The WCIRB provides a policyholder ombudsman who is available to answer questions from employers on classification, experience modification, and rating issues. |
| Organization Click for Link | ||
| America's Independent Truckers' Association, Inc. | 601-924-9606 | 601-924-9613 |
| National Association of Small Trucking Companies | 800-264-8580 | 615-451-0041 |
| American Trucking Association, Inc. | 703-838-1700 | 703-684-5751 |
| National Association of Independent Truckers, Inc. | 800-821-8014 | 816-891-0000 |
| Owner-Operated Independent Drivers Association | 816-229-5791 | |
| Southern Loggers' Co-Operative | 318-641-8081 | 318-641-8082 |
| Truckinfo.net | 724-349-3224 | |
| Truckflix.com | 417-472-6970 | 417-472-3477 |
| State Forestry Associations | ||
| State Loggers Associations | ||
| Independent Trucker Information | ||
| Truckinginfo.com | 949-261-1636 | 949-261-2904 |
| Alabama Trucking Association, Inc. | 334-834-3983 | 334-262-6504 |
| Alaska Trucking Association, Inc. | 907-276-1149 | 907-274-1946 |
| Arizona Trucking Association | 602-252-7559 | 602-253-1848 |
| Arkansas Motor Transport Association, Inc. | 501-372-3462 | 501-376-1810 |
| California Trucking Association, Inc. | 916-373-3500 | 916-371-7558 |
| Colorado Motor Carriers Association, Inc. | 303-433-3375 | 303-477-6977 |
| Motor Transport Association of Connecticut, Inc. | 860-520-4455 | 860-520-4567 |
| Delaware Motor Transport Association, Inc. | 302-672-7763 | 302-698-1305 |
| District of Columbia Motor Transport Association | 202-543-5149 | |
| Florida Trucking Association, Inc. | 850-222-9900 | 850-222-9363 |
| Georgia Motor Trucking Association, Inc. | 404-876-4313 | 404-874-9765 |
| Hawaii Transportation Association, Inc. | 808-833-6628 | 808-833-8486 |
| Idaho Motor Transport Association, Inc. | 208-342-3521 | 208-343-8397 |
| Illinois Transportation Association, Inc. | 630-654-0884 | |
| Indiana Motor Truck Association, Inc. | 317-630-4682 | 317-638-5380 |
| Iowa Motor Truck Association, Inc. | 515-244-5193 | 512-244-2204 |
| Kansas Motor Carriers Association, Inc. | 913-267-1641 | 785-266-6551 |
| Kentucky Motor Transport Association, Inc. | 502-695-4055 | 502-695-9026 |
| Louisiana Motor Transport Association, Inc. | 225-928-5682 | 225-928-0500 |
| Maine Motor Transport Association, Inc. | 207-623-4128 | 207-623-4096 |
| Maryland Motor Truck Association, Inc. | 410-644-4600 | 410-644-2537 |
| Massachusetts Motor Transport Association, Inc. | 617-270-6880 | 781-229-0458 |
| Michigan Trucking Association, Inc. | 517-393-2053 | 517-321-0884 |
| Minnesota Trucking Association, Inc. | 612-641-7351 | 651-641-8995 |
| Mississippi Trucking Association, Inc. | 601-354-0616 | 601-354-4371 |
| Missouri Motor Carriers Association, Inc. | 314-634-3388 | 573-634-4197 |
| Montana Motor Carriers Association, Inc. | 406-442-6600 | N/A |
| Nebraska Motor Carriers Association, Inc. | 402-476-8504 | 402-476-0579 |
| Nevada Motor Transport Association, Inc. | 702-331-6884 | 775-673-1700 |
| New Hampshire Motor Transport Association, Inc. | 603-224-7337 | 603-225-9361 |
| New Jersey Motor Truck Association, Inc. | 908-254-5000 | 732-613-1745 |
| New Mexico Trucking Association, Inc. | 505-884-5575 | 505-884-3661 |
| New York State Motor Truck Association | 518-464-5065 | 518-464-5069 |
| North Carolina Trucking Association, Inc. | 919-834-0387 | 919-832-0390 |
| North Dakota Motor Carriers Association, Inc. | 701-223-2700 | 701-223-4324 |
| Ohio Trucking Association, Inc. | 614-221-5375 | 614-221-3717 |
| Oklahoma Associated Motor Carriers | 405-843-9488 | 405-843-7310 |
| Oregon Trucking Association | 503-289-6888 | 503-513-0008 |
| Pennsylvania Motor Truck Association | 717-761-7122 | 717-761-8434 |
| Rhode Island Trucking Association, Inc. | 401-438-0410 | 401-729-5220 |
| South Carolina Trucking Association, Inc. | 803-799-4306 | 803-254-7148 |
| South Dakota Trucking Association | 605-334-8871 | 605-334-1938 |
| Tennessee Trucking Association, Inc. | 615-255-0558 | 615-777-2024 |
| Texas Motor Transport Association, Inc. | 512-478-2541 | 512-474-6494 |
| Utah Trucking Association | 801-973-9370 | 801-973-8515 |
| Vermont Truck and Bus Association, Inc. | 802-479-1778 | 802-479-1395 |
| Virginia Trucking Association, Inc. | 804-355-5371 | 804-358-1374 |
| Washington Trucking Association | (253) 838-1650 | (253) 838-1793 |
| West Virginia Motor Association, Inc. | 304-345-2800 | 304-345-0308 |
| Wisconsin Motor Carriers Association | 608-833-8200 | 608-833-2875 |
| Wyoming Motor Carriers Association, Inc. | 307-234-1579 | 307-234-7082 |