Business Insurance can seem complex and confusing, so we’ve put together a comprehensive guide to distinguish each type, and who they may be best for.
General Liability Insurance:
General Liability Insurance is the most basic form of business insurance. It is likely that before any client signs a contract with you, they will require that you have this insurance. Standard limits required are $1million per occurrence and $2million aggregate, although they can go higher. General Liability coverage is typically triggered when there is bodily injury or property damage to a 3rd party as a result of your work.
- Provides you with top-notch legal representation and pays for covered damages caused by you or an employee (up to the maximum limit provided on the policy)
- Typically required when entering into a contract with a third party, or pulling permits in a city like Philadelphia, or even smaller towns like Ridley or Media
- Covers many of the most basic business insurance needs
This type of business insurance is especially important for individuals who:
- Own or Lease property
- Have customers or clients visit your location
- Visit the locations of your clients
- Manufacture or sell any products
Workers Compensation Insurance:
Work Comp insurance is mandatory in Pennsylvania for any business that has an employee.
- Provides wage replacement and medical benefits to an employee who is injured on the job
- In return for these benefits, the employee waives the right to sue you, the employer, for negligence (in most cases)
- Provides Employers Liability should the employer be sued by others that are affected by the injury to your employee (such as the employee’s spouse).
A common misperception about work comp is that you don’t have to purchase coverage if you pay an employee on a 1099. THIS IS NOT TRUE. If an employee/sub-contractor is injured working for you, a judge will try to determine whether there is an employee-employer relationship. This is based more on how much work they do for you, how much control you have over them, who trains the employee, among others. The tax form you use to pay them will have very little impact on the result.
Professional Liability Insurance:
Professional Liability provides coverage for your services, training, advice, etc. While General Liability is triggered by Bodily Injury or Property Damage, Professional Liability provides coverage for financial losses to a 3rd party absent of the Bodily Injury or Property Damage.
Some examples of Professional Liability include:
- You build a website for your client in West Chester, PA. Glitches in the site cause it to shut down for several days, resulting in lost revenue to your client. You can be held responsible for this lost revenue.
- An architect draws blueprints for a building being constructed in Exton. Several months after the building is built, the roof caves in. The design of the custom roof turns out to be a poor one, leaving the architect liable.
- While working on customer computers in Kennett Square, you forget to re-install the firewall, allowing a virus to access customer files which include personal information.
Note: Professional Liability Insurance is NOT covered under a General Liability policy, and would need to be purchased separately.
Commercial Car Insurance:
If you have a car, truck, or van that is owned by your business or primarily used in your business, you should have a commercial auto policy. While sole proprietors might be able to get the coverage through a personal auto policy, once you have created an LLC or Corp, or add employees that will drive, you will need to switch to a commercial auto policy.If you are using your personal vehicle for business, coverage for an accident while on business will likely result in denial of coverage from your personal auto insurance carrier.
- Typically provides coverage options for both business and personal usage of the vehicle
- A business auto policy will typically allow you to buy higher limits of coverage than on a personal auto policy, which more adequately protects your business
Commercial Property Insurance:
If you own a building, equipment, office furniture, or rely on a specific location to do business, you need property insurance. Not only does property insurance cover the physical property you own, it also covers Business Income. Business Income provides coverage for the income lost as a result of your location being down after a claim. For example, a deli that has a fire may be closed for several months, with no ability to generate revenue. Business Income would reimburse you for this lost income.
Covers the following:
- Apartment Buildings
- Garden Style Apartments
- Lessors Risks
- Mixed Use Occupancies
- Shopping Centers/Strip Malls
- Office Buildings
- Industrial Parks
- Self Storage
- Bed, Breakfasts
- Dwellings (1 to 4 Units)
- Motels and Hotels
- Social Clubs
- Fraternal Organizations
Call Risk Averse Insurancein Media, PA to discuss insurance for you or your business.
Risk Averse Insurance is an insurance agency in Delaware County that specializes in providing high-quality insurance products at an affordable price.