YOUR GUIDE TO COMMERCIAL INSURANCE IN NYC

COMMERCIAL INSURANCE

Commercial insurance is the most essential current financial investments. You’re likely to initiate such insurance in situations where:

• you’re a new business owner,
• thinking to start a new business,
• have owned a business for many years.

You must be aware with the fact that every business comes with risks that could be both minimal or could lead to huge financial loss. Commercial insurance, here provides you protection against such familiar losses like:

• property damage,
• business interruption,
• theft,
• liability,
• worker injury.

Acquiring the most suitable commercial insurance can aid your business from these severe losses or recover with minimal business interruption and financial impairment.

PURCHASING COMMERCIAL INSURANCE

Primary step:

The primary step that you’ve to follow while purchasing small business insurance is to contact a licensed insurance broker-agent who specializes in commercial coverage. A successful relationship with a reliable and proficient broker-agent is very vital.

Taking the help of referral sources:

Established business contacts are notable referral source for recommending a commercial lines broker-agent, especially if the contacts are in the same or close-related industry. Professional broker-agent associations like:

• The Insurance Brokers and Agents of the West (IBA West) and
• The Western Insurance Agents Association (WIAA Group) can facilitate you in your search for a licensed broker-agent in your local area.

EXPECTATIONS FROM A BROKER-AGENT

Importance of New York Department of Insurance:

Before you start with your broker-agent search, it’s principal to verify the broker-agent’s insurance license with the New York Department of Insurance. It is responsible for providing license to all the broker-agents who sell/market insurance in NY.  A broker-agent is issued a fire and casualty license, which enables him/her to sell commercial property and casualty insurance. This method will make your search untroubled.

Brokers and agents act in different ways to secure insurance for consumers:

It’s very important for you to know that Brokers have the right to sell for many insurance companies. However, they’re paid by you in the form of a broker fee charged for placing and servicing your insurance business. Insurance companies appoints agents who are paid a commission by the insurance company with which business is placed.

A broker-agent will arrange a meeting with you to discuss your business operations:

You don’t have to worry for arranging a meeting with your broker agent because they themselves will contact you. These exposures are very predominant and specific for your industry and business type.

Or if you already have business insurance, the broker-agent will ask to review your current policy. The broker-agent is going to compare your limits, exposure bases, business classifications, exclusions, and endorsements. These are done in order to analyze any gaps, errors or overlaps that may exist in your current commercial policy.

The information should be credible that you’re providing in the application process to the broker-agent. Through the information, he can easily access your specific insurance needs and provide you best options to protect your business from any loss.

KIND OF INSURANCE NEEDED FOR DIFFERENT TYPES OF BUSINESSES

The broker-agent will review the individual risks of your business. Also, he’ll help you to determine various coverage options for purchasing commercial insurance.

However, after you’re done with the broker-agent’s proposal, it’s your job to make an informed decision and choose the appropriate insurance. A healthy relationship with the broker-agent helps you to discuss any unclear terms, conditions or concepts.

Howbeit, a proper knowledge of all types of available insurance coverage lines will also help you in cases of business expansion as new exposure arises. The following commercial lines of insurance is going to cover broad areas of display that are common to most business operations:

• PROPERTY INSURANCE:

  It provides coverage for stolen, damaged or destroyed property by a covered peril. The term “property insurance” comprises many types of available insurance:

1. COMMERCIAL PROPERTY:

   The basic coverage sections of commercial property insurance includes: Buildings you own or lease as a part of your business, your business personal property and the personal property of others.

2. INLAND MARINE:

   It extends to the damage and covers the liability exposure to your business property that suffers destruction while in transport.

3. BOILER AND MACHINERY: 

   It covers business property, other property losses and legal fees due to the failure of boilers and machinery.

4. CRIME: 

 It gives protection for your business assets which includes merchandise for sale, real property, money and securities.

• CASUALTY INSURANCE:

It provides coverage primarily for the liability exposure of an individual, business or organization. The subject of casualty insurance coverage includes the 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. Its types are:

1. COMMERCIAL AUTOMOBILE: 

   It covers protection of your company from any liability producing from the automobiles that are used in your business or any damage to the covered automobile.

2. COMMERCIAL GENERAL LIABILITY:

   It provides automatic coverage for new locations and activities of your business, which come about after policy inception and throughout the policy term. Thus, this policy covers all hazards within the scope of the insuring agreement that are not otherwise excluded.

3. COMMERCIAL UMBRELLA: 

   Through a commercial umbrella, you can protect your business from being liable for excess liability judgment that occurs when your liability claim goes above the aggregate limit and the policy limits become exhausted. Thus, it covers the amount of loss above the limits of a basic liability policy. Also, it provides coverage when a basic liability policy is not in force.

4. WORKERS COMPENSATION: 

   This insurance provides benefits to an employee who suffers a work related injury/illness. It’s based on a no-fault system which means that an injured employee doesn’t need to prove that the injury/illness was someone else’s fault in order to receive workers compensation benefits for an on-the-job injury/illness. For more information, Contact Us

A BUSINESS OWNERS POLICY

Business Owners Policy (BOP) is a combination commercial policy that covers:

• property,
• general liability,
• business interruption. 

It’s used specifically for small businesses such as:

• hardware stores,
• barbershops,
• greeting card shops,
• accountant offices or low-density apartment houses.

This insurance has to be followed under strict guidelines including maximum allowable square footage for office, retail or apartment risks.

RATINGS OF COMMERCIAL POLICIES, SELECTION OF DEDUCTIBLES AND DEVELOPMENT OF PREMIUMS

Ratings:

The policy premium is developed through the way a policy is rated. Rating factors are based on the line of insurance you’re purchasing.

If you’re purchasing commercial property insurance, the building rating formula is based on factors like:

• square footage,
• type of construction,
• sprinklered or non-sprinklered,
• the fire protection classification.

If you’re purchasing general liability insurance, the rating formula can be based on the factors such as:

• square footage,
• payroll,
• gross sales depending on the general liability classification codes used.

These are called rating exposures.

Selection:

Once the rating exposures are identified and the deductibles selected, the premium is calculated by a simple formula: rate x exposure = premium.

Development:

The deductible amount you choose will be calculated in the rate. The higher the deductible, the lower the rate. By utilizing higher deductibles, your premium’s cost can be brought down. However, it’s better to not choose overly large deductibles because it can jeopardize your company’s financial future.

COMMERCIAL CLAIMS

Your duties and responsibilities in a claim can become multiple depending on the type of loss your business endures. Therefore, it’s important to remember that your broker-agent should assist you throughout the claims process.

Whether you contact your broker-agent/insurance company directly when filing a claim, you’re required under the insurance contract to report all claims in a timely manner. This allows the insurance company to process the claim and conduct their investigation as quickly as possible.

Commercial claims can be very complex, therefore, it’s important for the company to assess the claim quickly in order to eliminate any situation that could increase loss. This is especially crucial in liability claims, as there can be high dollar amounts at stake.

When claims aren’t controlled early, litigation from third parties can arise. Litigation can be expensive and often ends in a judgement much higher than if an experienced claim representative had handled the claim from the beginning.

You as business owners should be aware that claims loss experience is reflected in the rating formula and thus, directly affects premium costs. By following the duties outlined in your contract regarding claims, you’re a partner with your insurance company in helping to keep claims costs to a minimum, which in turn helps keep your premium costs down.

The better your claims experience, the greater modification allowed to lower your premium.

• DEDUCTIBLE:

The deductible on a commercial policy is the part of the loss that you’ve to pay up-front before your insurance company pays a claim. Depending upon the amount of the deductible stated in your policy, the insurance company will pay up to the limits of the policy when a claim is covered after you’ve provided the deductible payment. The higher the absolute dollar amount (deductible)will be, the lower would be your premium.

• LOSS CONTROL:

Through loss prevention and control you can easily decrease the frequency and potential severity of the claims. Your broker-agent will offer suggestions to you on how to best control the loss exposures that are common to your business depending upon your type of business exposure.

He along with your account underwriter claims representative and loss control representative will also create an entire program of loss prevention that includes specific modifications and procedures to follow that can help create a safer workplace. These programs can even include an employee safety program that incorporates awards and suggestions.

Through the implementation of loss control methods, there is protection of the public and workers, and your loss experience improves when the premium costs go down.

TROUBLE LOCATING INSURANCE FOR BUSINESS

Your business can easily obtain insurance from the standard insurance market with the assistance of a qualified broker-agent.

However, if your business has experienced significant losses, it can be considered to be engaged in high-risk operations. One situation could be that you’ve recently started your business therefore, you’re facing difficulties in locating insurance in the standard commercial insurance market. Though in this case, your broker-agent can explain the options you may have in seeking and securing commercial insurance elsewhere.

• SURPLUS LINE INSURANCE:

You can also obtain insurance from the surplus line market when your three applications have been turned down from a licensed commercial insurance carrier. Surplus Line insurance companies aren’t licensed by the New York department of insurance. However, they do have to go through an approval process that includes providing evidence of minimum capital and surplus requirements.

Nevertheless, when these requirements are up to the satisfaction of New York department of insurance, it may approve the company to conduct business in New York and subsequently add them to the List of Eligible Surplus Line Insurers (commonly referred to as the LESLI list).

These companies are accessed through a specially licensed broker. The broker must have a surplus line license issued by the New York department of insurance in order to sell surplus line insurance. Before purchasing insurance from a surplus line insurance company, your broker must provide you with a disclosure notice under CIC Section 1764.1 that the insurance you are buying is being issued from a surplus line.

Although surplus line insurers must follow the Fair Claims Settlement Practices Regulations, the New York department of insurance has limited jurisdiction over the operation of surplus line insurers. If the company goes bankrupt, your only course of action will be through the courts.

The New York Insurance Guarantee Association which protects claims with admitted insurers, doesn’t apply to surplus line insurers. A surplus line broker should be able to supply information on the financial solvency of any surplus line company that it represents. After checking the financial solvency of the surplus line company, you may also wish to verify that the surplus line company is approved by the New York department of insurance and currently on the LESLI list.

• NEW YORK FAIR PLAN:

 The New York FAIR Plan has been in operation since 1968 to provide basic property insurance to property owners who are unable to obtain insurance in the standard market.

It’s an association of all property insurers licensed in the state who participate according to the percentage of property insurance they write in New York. It was established to assure stability and accessibility of property owners to property insurance.

The majority of New York FAIR Plan business is in designated urban, inner city, and areas subject to destructive wildfires. While it primarily writes policies for homeowners, they do write a small percentage of policies for commercial property owners.

SPECIFIC RULES ON COMMERCIAL INSURANCE CANCELLATION AND NON-RENEWAL

Commercial insurance companies must follow the rules set out in the insurance code regarding commercial insurance cancellation and non-renewal. There are separate insurance code sections covering cancellation and non-renewal for workers compensation, auto, ocean marine, surplus line, reinsurance policies, and other commercial insurance lines. Therefore, its better to contact the New York department of insurance for a complete explanation if you run into any problems with cancellation or non-renewal notices.

NEW YORK SMALL BUSINESS INSURANCE

If you own a small firm with a number of employees or you plainly run a business on your own, then it’s obligatory to procure a New York small business insurance policy or in other terms, commercial insurance in NYC to safeguard your business from unanticipated circumstances.

NEED FOR THE FOLLOWING  COMMERCIAL INSURANCES IN NYC

• PROTECT YOUR BUSINESS (GL):

  For a business property to survive in NY, it’s essential to attain GENERAL LIABILITY protection. It covers the medical bills of those people who accidentally get injured in your workplace. Also, it covers the expense of fixing and replacing the personal property of any customer who might accuse you of property damage.

• INSURE YOUR PROPERTY (BPP):

  With this policy, you’ll be provided compensation for any damage caused to your building. Furthermore, it also helps to replace items like merchandise or furniture.

• EMPLOYEE PROTECTION (WC):

Workers compensation becomes a necessity when there are employees involved. It fends all the medical expenses of the workers who get injured/sick while at work. Also, it pays the employee any wages he has missed due to the injury/illness. Along with it, if in case, any employee legally threatens the company, then it covers your legal fees as well.

• UMBRELLA/EXCESS LIABILITY:

If in any case a settlement is larger than your general liability policy’s limits then, you need excess liability. This can cover any extra costs that you face when someone is hurt while visiting your business.

• CYBER CRIME LIABILITY:

  The immunity of business against the cyber crime is in-determined. You can however, prepare yourselves by obtaining this policy.

We provide you insurance that would ascertain a good and bright future of yours and your family. Insurances are a way of giving protection to your long life earned and well-maintained business as well.