What Should a Business Owner Consider in Choosing a Business Insurance Agent? And What Insurance Coverage does a Business Need?
What should a Business Owner Consider in Choosing a Business Insurance Agent? Very similar to when you choose any other Professional (Doctor, Lawyer, CPA etc). If you shop for price only, expect to get burned.
- Call the Department of Insurance to get a status on how many complaints the agent has had
- Determine what form of distribution system will be used
- Direct Writer
- Independent Insurance Agent
- 1-800 number
Life Underwriter (CLU)
This presentation is meant to serve only as a guide to assist business owners and those advising for SCORE. For a thorough Analysis of Coverage a Professional Agent needs to be consulted
What insurance coverage does a business need?
With all policies all be mindful of exclusions, limitations, and endorsements. Have the insurance agent explain them before a loss not after a loss.
- General Liability (Bodily Injury and Property Damage)
- Premises and Operations
- Products and Completed Operations
- Personal Injury and Advertising
- Fire Legal Liability (This has to do with property in the care, custody and control of the insured. Be sure your agent reads the lease if applicable to determine who is responsible and if there is a waiver of subrogation)
- Optional Non-Owned Auto (Could as an alternative be put on
- Optional Hired Auto (Could as an alternative be put on Commercial Auto Policy)
- Building Be mindful of:
- Value (Be careful with co-insurance, so there is not a penalty at the time of loss)
- Actual Cash Value, Agreed Amount , or Replacement Cost (for both building and Business Personal Property)
- Ordinance or Law
- Value (Be careful with co-insurance)
- Actual Cash Value, Agreed Amount, or Replacement Cost
- Items that need to be scheduled to prevent disagreements at the time of a loss (Fine Arts Antiques, etc)
- Jewelers Block
- Tools and equipment (if they leave the premises)
- Electronic Data Processing (EDP)
- Motor Truck Cargo
- Installation Floaters
- Liability (Often times the greatest exposure to a business, but with the least amount of liability coverage)
- Med Pay
- Uninsured Motorist
- Underinsured Motorist
- Comprehensive (Various Deductibles)
- Collision Various (Deductibles)
- Optional Common Endorsements: Drive Other Car (DOC), Non-Owned Auto, and Hired Auto
Keep in mind the Liability for Trailers only extends if under 2,000 GVW. If more than 2,000 pounds the trailer must be listed for there to be liability coverage. Physical Damage for trailers must always be listed
- Keep in mind there is no coverage for add on equipment unless scheduled
- Keep in mind there is no coverage for cargo under the Business Auto
- Keep in mind there is no coverage for tools and equipment
- Keep in mind add on equipment need to be figured in the value of the truck and it is best stated.
- Keep in mind under a Business Auto Policy there is no coverage that automatically extends to vehicles you rent
Workers Compensation is sold by the State of Arizona and Private Insurance Carriers. It is wise to compare when shopping for Workers Compensation.
It is the law that any employer with one or more employees must carry Workers Compensation
Three Parts to Workers Compensation
- Indemnification 66 and 2/3 of wages with a monthly maximum in Arizona of $3,600.
- Medical (No limit)
- Liability (Minimum is $100,000/per accident bodily injury; $100,00 for any one disease with a maximum of $500,000 per policy. To raise this coverage to $1,000,000 it is only 2% more of the annual premium)
Keep in mind that if any employee does any work in another state the Insurance Carrier or agent should be notified immediately as it may be necessary to endorse the policy to prevent any gaps in coverage.
Other Business Insurance to Consider:
- Group Life
- Key Man Insurance
- Funding for Buy-Sell Agreement
- Short Term
- Long Term