Businesses work with other businesses on a daily basis to complete joint projects. For example, when a contractor builds a home, they use the work of sub-contractors for materials and labor for the project. These businesses sign contracts or agreements prior to any work being completed. So, how does business insurance work to protect against the risk of some other company, vendor, or sub-contractor causing damage to people or property of a mutual customer?
This is where the additional insured status comes in. One party will add the other party as an “additional insured” on their commercial liability insurance policy.
By adding an entity to your policy as an additional insured you are protecting that entity against your company’s negligence. By having another entity add your business as an additional insured that company is protecting you against their negligence. For example, general contractors often require subcontractors to name the general and the owner on the subcontractor's policies. In this way, if the general contractor or owner is sued due to accidents arising out of the work of the subcontractor, the subcontractor's insurance will protect the general contractor and owner.
Additional insured status must be added by certificate and endorsement. That means there is a formal process to follow with your insurer and you must make sure those businesses you work with who claim to have added you have actually done so. Demand to see the actual endorsement and not just “proof” of insurance.
Additional insured status DOES NOT mean the additional insured does not need insurance. It means the additional insured has controlled the risk of others’ negligence and can rely on their own business insurance policy to protect against their negligence.
Additional insured status does not give the same rights under the policy terms as a “named insured” or “insured” and these are technical distinctions that need to be reviewed with your local insurance agent.
Whenever your business enters into a project with another business or contracts with another business on an endeavor follow these four general principals.
The cost of adding an additional insured to a property or liability insurance policy is generally low, as compared to the costs of the original premium.
EMERGE INSURANCE AGENCY
Business insurance is designed to protect your business from unknown accidents and losses. Many businesses many not take the time to understand many of the unique risks they might have. That is why an agent can help you not only understand your risk but develop and design a program to address your risks.
Did You Know?
Many business professionals many not have thought of these coverages, but they should.
Cyber Liability Insurance can be added to your program to cover the costs associated with customer notification and recovery of hacked data. If you store data, including private information on computers, use e-mail, generate revenue online, or use your computer to control production, manufacturing, or inventory, your company is at risk! In short, any business not making a serious effort to protect personal private information is seriously out of step with the emerging landscape of privacy law.
Employment Liability Insurance provides protection for an employer against claims made by employees, former employees, or potential employees. It can cover discrimination (age, sex, race, disability, etc.), wrongful termination of employment, sexual harassment, and other employment-related allegations.
Professional Liability Insurance pays for damages caused by services. It is also called “errors and omissions” coverage. This insurance is for companies that market a service instead of a product, just as professionals in medical clinics must have medical malpractice coverage.
Directors and Officer’s Liability Insurance helps protect your business, owners, executives, and managers, if individuals, competitors, third parties, or government regulators make claims. A lawsuit against directors and officers most commonly occurs when shareholders (private or public), clients, competitors, or others feel they suffered a loss in the value of their shares because of actions that the board or senior management took or did not take.
At Emerge Insurance Agency, we can design an insurance program package to meet your company’s property and liability needs. Our goal is to provide you with the best possible combination of coverage, price and service.
EMERGE INSURANCE AGENCY
Most states (including Florida) require employers to purchase a workers’ compensation insurance policy to cover workers who are injured or made ill due to a workplace exposure. While owners and corporate officers can exclude themselves from coverage, there are potential drawbacks to opting out that need to be seriously considered before you make your decision.
Executive officers of a corporation are usually included for coverage under each state's workers’ compensation laws unless they file for an exclusion from the policy. Partners and sole proprietors are generally exempt from coverage but may elect coverage under the policy.
Benefits of Workers’ Compensation Insurance
The benefits are the same for everyone covered under a commercial workers’ compensation policy, including officers. Workers’ compensation coverage pays benefits to workers injured on the job. These benefits include medical care, a portion of lost wages and permanent disability. It also provides death benefits to dependents of employees killed from a work-related accident.
A typical health insurance policy specifically excludes work-related injuries unless there is a rider attached to the policy that adds business coverage. Furthermore, health insurance does not cover disability the same way that workers’ compensation insurance does.
Why would someone opt out of workers’ compensation insurance?
Many officers and business owners make the following assumptions when opting out of workers’ compensation insurance:
Drawbacks of Opting Out
Even if a corporate officer spends the majority of his or her time at a desk, there is still a risk of injury. And if an injury occurs, it's likely that the officer's health insurance policy will have exclusion for work-related injuries. Without workers' compensation insurance, the cost of treatment for those injuries would have to be paid for by the company, or come out of the pocket of the officer.
Opting out of workers' compensation insurance may save some money, but it also transfers risk to the employer and to the corporate officer who chooses to opt out.
Additional Premium Charges
If an officer rejects coverage, he or she will most likely have to file a form with the state and/or the insurance provider prior to obtaining coverage for the rest of the company. In absence of this notification, the insurance provider will assume that the officer is electing coverage, and will charge him or her premium.
Consult Emerge Insurance Agency today if you have any questions about self-insurance or need help deciding whether or not opting out of workers’ compensation insurance is right for you and your business.
EMERGE INSURANCE AGENCY
As a member of your homeowners association board (HOA) you may ask, "Do we need insurance?" The answer is a big yes! The more pertinent inquiry would be, "What types of insurance does our HOA need?" It is vital that your organization has the proper insurance coverage for all possible types of problems.
Some sobering facts
Only about half of homeowners associations maintain their insurance policies. Of that half only 25% maintain adequate coverage. While nearly all HOA's have some type of policies on the books most groups have no idea what they have. This can lead to expensive litigation and claims that can cost your homeowners association thousands, and sometimes even millions of dollars.
What can you do as a Board member?
The fact is insurance is one of the best investments an HOA can make. It is up to you and your board to make sure your Association is properly covered for all contingencies.
There are insurance agents and agencies that specialize in HOA coverage. These professionals can work with you to tailor a plan that fits the unique needs of your homeowners association. There is no better peace of mind than knowing your organization has adequate insurance coverage in force.
What types of insurance do you need?
There are several types of insurance coverage that your homeowners association should carry. If you maintain this coverage your Association should be protected from almost all issues that arise. Let's take a look at the coverage:
If your HOA owns property then it should protect it. This type of coverage does just what is says; insures the property. This policy will cover against vandalism, theft and damage from fires, storms and natural disasters.
This will cover things like accidents or injuries that take place on the property. Your HOA could be liable for actions it took, or did not take. Associations should take actions to correct any safety issues, especially in today's world where lawsuits are all too common.
Directors and officers liability insurance
This is more commonly known as "D&O" coverage. This protects officers and trustees from being held liable when performing their duties for the Association. The D&O policy helps fund this requirement. It protects officers and trustees when they err accidentally and without malice. It does not cover willful acts of wrongdoing.
This coverage protects the organization from theft committed by employees, contractors, Association members/volunteers, or even management companies. This should be part of your Association’s overall insurance package.
There is a worker’s compensation insurance that you should consider if you do not already have it. This is to cover your volunteers, like Board members or others that give their time to do something for the Association without pay, like changing light bulbs for instance. It does not take the place of the worker’s compensation insurance that your contractors should carry.
The types of coverage listed above should protect your homeowners association from most insurance issues it can run into. It is better to have more coverage than not enough.
Of course, you and your Board members may not be insurance experts. It is essential that you consult and get counsel from a licensed insurance agent, or agents, to help put your insurance plan in place. There is no substitute for proper insurance coverage.
Protect your homeowners association
When you became a Board member you promised to serve your association and protect it. Certainly, helping to make sure your organization has the proper insurance coverage to protect it against all sorts of issues is part of your duties.
Along with the rest of the Board, make sure that your insurance coverage is up to date and comprehensive. Be diligent about your homeowners association's insurance and be adequately protected from many potential problems.
EMERGE INSURANCE AGENCY
With every commercial liability and property policy, regulations require that the option to purchase terrorism be offered. Business owners are increasingly in need of advanced insurance products for protection in today's digital world. One of the ways you can protect your company is with the use of terrorism insurance. This type of business insurance can provide you with financial protection from losses you suffer as a result of terrorist activity. Take a good look at these policies. They differ significantly from each other because they are a newer form of protection. Nevertheless, they are becoming more vital than ever.
What Does Terrorism Insurance Cover?
Terrorism coverage is a type of public and private risk-sharing partnership that allows the insurance industry and the federal government to share in the losses when a terrorist attack happens. It was put into place through the Terrorism Risk Insurance Act in 2002. In short, it allows a business to recover losses and rebuild after such an event occurs.
This type of commercial business insurance can cover both destroyed and damaged property such as your building, its furnishings, its equipment and its inventory. It may also cover a long-term interruption of your business. In some cases, it can also provide a level of liability protection from claims made against your business in relation to terrorism.
These policies do have exclusions, and they differ from one state to the next. They may exclude coverage for a fire after such events, as well as chemical, biological, nuclear and radiological attacks. In addition, you should have specific cyber insurance to protect against cyberterrorism
Do You Need It?
Not all businesses need to have this type and level of coverage, but more do now than have in the past. The cost for this coverage tends to be inexpensive in most areas, and those who live in a rural or residential area may be less likely to need this coverage than those businesses operating in a city center. If you operate in or near airports, government buildings or other busy traffic areas, you are at an increased risk.
All types of business insurance are important. Talk to your agent about the benefits of adding terrorism insurance to your policies and take advantage of the protection available to you.
Call Emerge Insurance Agency 904-677-5884 for more information on Florida business insurance
Cecil Williams -