One of the most important concerns for both workers and businesses is the health and safety of their workforce. Workers’ compensation insurance and occupational accident insurance are two important insurance policies. They each come into play when it comes to the protection and safety of the workplace. In spite of the fact that both offer financial aid in the event of a workplace injury, there are substantial differences between them in terms of their structures, coverage, and the conditions under which they are applicable.
Workers Compensation
Companies that employ a minimum number of workers or employees who work a specific number of hours per week as defined by law are required to comply with the workers’ compensation requirement, which is a state-regulated requirement. The minimum number of employees varies from state to state. In some states, it means one or more employees, while in others, it means five or more. For more information on state-specific workers’ compensation requirements, visit the U.S. Department of Labor’s Worker’s Compensation page.
Workers’ compensation provides payments for wage loss, medical treatment and related expenditures, and rehabilitation for employees who sustain an injury on the job or who become ill as a result of elements that are present in their workplace environment. In addition, the insurance policy provides coverage for employer liability, which means that businesses are afforded some degree of protection in the event that an employee decides to file a lawsuit in connection with their workers’ compensation claim. More frequently than not, the costs of legal defense are covered up to the limitations of the policy. It is still the responsibility of employers to ensure that their employees are working in a safe environment.
Occupational Accident Insurance
Occupational accident insurance is a policy that provides benefits to independent contractors and employees who are not protected by a workers’ compensation program. This sort of insurance may give medical, disability, and accidental death and dismemberment benefits. But it is not state-regulated, unlike workers’ compensation. Wage loss benefits, medical expenditures, and rehabilitation costs for workers or insured independent contractors may be paid by policies, but only up to policy limits. Employers can determine their coverage and deductible amounts based on their own risk tolerance.
Workers’ compensation is more expensive for businesses, but it provides more complete coverage, particularly in terms of their own liability, which is not covered by occupational accident insurance. Employers who purchase occupational accident insurance may be exempt from the mandatory workers’ compensation system in several states. While the employer still has a legal commitment to employees who are injured or killed on the job, it is significantly less expensive than workers’ compensation. Employers receive statutory benefits through workers’ compensation, however when purchasing occupational accident insurance, you must make the following decisions:
The limit of liability to carry per accident.
The deductible to assume per accident.
The level of disability coverage to provide.
The level of death benefits to provide.
Companies will still be liable to their employees for legal responsibilities that are not covered by occupational accident insurance. Choosing the wrong coverage selection might expose a company to significant financial losses – a danger that workers’ compensation insurance protects against.
How They Differ
Workers’ Compensation
Mandatory Coverage – Workers’ Compensation Insurance is a state-mandated program that mandates employers to provide coverage for employees who are injured or ill at work. The standards and regulations may differ from one state to the next.
No-Fault System – Workers’ Compensation is a no-fault system, which means that employees are eligible for payments regardless of who caused the job accident. This method is intended to give injured workers prompt compensation without the need for lengthy court battles to identify fault.
Eligibility – In the US, workers’ comp is generally available to all employees, regardless of fault or negligence. It is mandated by state laws to ensure that employees are protected in case of work-related illnesses or injuries. Whether they’re a full-time employee, part-time worker, or seasonal staff, they’re typically covered under workers’ compensation. That is if your company meets the legal requirements.
Covered Benefits – Workers’ Compensation often pays for medical bills, rehabilitation costs, and a portion of an injured employee’s salary while they are unable to work. Long-term compensation may be awarded in the case of permanent impairments.
Employer Immunity – When covered by Workers’ Compensation Insurance, employers are generally protected from lawsuits made by employees for occupational injuries. This exemption is a trade-off designed to expedite the procedure and ensure that injured workers receive early compensation.
State Regulated – Workers’ Compensation programs are governed by state agencies. Each state has its own set of laws governing coverage criteria, benefits, and claim management.
Occupational Accident Insurance
Voluntary Coverage – Occupational Accident Insurance is often bought by employers to provide additional protection beyond what Workers’ Compensation may provide.
Fault Considerations – Occupational Accident Insurance, unlike Workers’ Compensation, usually considers fault when deciding compensation. Coverage may be limited if an employee is deemed to be at fault for their injury.
Flexible Coverage – Employers can tailor Occupational Accident Insurance coverage to their specific requirements. Medical bills, disability benefits, accidental death benefits, and other benefits may be covered. The scope of coverage, however, is determined by the specific policy chosen.
Eligibility – Occupational Accident Insurance is designed specifically for workers who are not eligible for workers’ compensation, such as independent contractors and other workers. Due to the fact that they are not typically covered by regular workers’ compensation plans, individuals who are self-employed, freelancers, and gig workers are examples of individuals who can benefit from occupational accident insurance. These non-traditional workers, who may be exposed to a variety of unique dangers and difficulties, are afforded an additional layer of protection by occupational accident insurance.
Excludes Certain Risks – Certain hazards or activities may be excluded from coverage under occupational accident insurance policies. And employees may be required to meet specified requirements to be eligible for compensation.
No Employer Immunity – Occupational Accident Insurance, unlike Workers’ Compensation, does not protect companies from employee lawsuits. If an employee has this coverage and suffers a working injury, they maintain the ability to sue their employer.
Choosing The Right Coverage
Consider Legal Requirements – Employers must comply with state-mandated Workers’ Compensation requirements. Failure to do so can result in legal consequences. While options, many consider Occupational Accident Insurance to be an additional layer of protection.
Evaluate Risks and Budget – It is important for employers to evaluate the dangers that are associated with their industry as well as the financial repercussions that could result from injuries that occur on the job. It is possible for occupational accident insurance to provide supplemental coverage that is tailored to specific requirements.
Communicate With Your Employees – Important is the transmission of the available insurance coverage in a clear and concise manner. It is important for employees to be aware of their rights under Workers’ Compensation as well as any additional coverage that may be given by Occupational Accident Insurance.
Consult With An Insurance Agent – When it comes to navigating the complexity of Workers’ Compensation and Occupational Accident Insurance, it might be helpful for companies to seek counsel from insurance professionals. They have the ability to help select the coverage that is best suitable for the specific conditions of your company.
Wrapping Up
EZ is the place to go if you are seeking workers’ compensation insurance. We take great satisfaction in making your shopping experience as simple and stress-free as possible. Not only do we provide our consumers with our undivided attention, but we also provide entirely tailored service and quick outcomes. Once you have completed our form, you will immediately be provided with free estimates from one of our representatives. A person who will comprehend your requirements from the very beginning. To ensure that you make the greatest choice possible and obtain the best coverage at the best price, we want to make sure that you do so. Make sure you check out your quotes right away because none of our services cost you anything.
For any questions, please do not hesitate to call us at (855) 694-0047. You’ll speak with a local insurance agent that is able to provide answers to all of your questions. In addition, we can assist you in locating the workers’ compensation policy that is most suitable for your company. Or for free instant quotes just enter your zip code into the box below.
More and more Americans are leaving their cubicles to work on their own. Well, why not? You decide how to run your business. You decide when to work. Who is on your team is up to you. Those are some great perks. So it’s not surprising that there are 15 million self-employed professionals in the American workforce right now, and that number could nearly triple in the next two years.
But there are some things you can’t control or plan for in business or in life. What if something goes wrong on the construction site and one of your clients gets hurt? Or what if you get hurt in a freak accident and can’t work anymore? Those “what if” questions are enough to turn the dream of a self-employed entrepreneur into a nightmare. So, if you work for yourself, you need insurance to protect yourself, your family, and your business. You’ve worked too hard to leave anything unprotected. But how do you know which types of insurance for self-employed people need and don’t need? Let’s look at types of insurance that will make you feel safe.
Self-Employed Business Insurance
Whether you’re a plumber or a freelance writer, there’s always a chance of something going wrong with your job. Some people are more likely to get hurt on the job, while others may be more likely to be sued. Insurance for self-employed individuals is crucial to cover the risks of your work. Here are the four most important types of business insurance to look into.
Liability insurance will protect you financially in the event that someone sues you for damages after slipping and falling in your coffee shop. Or breaking an expensive vase while cleaning a client’s home. Slander suits are also covered by general liability insurance. This sort of protection is available both as a separate policy and as part of a business owner’s policy.
Listen, we all have our flaws, and everybody messes up sometimes. This is where professional liability comes in handy. It’s insurance that protects you in the event that a client is harmed as a result of a service you provided or advice you gave. It is also known by its more common name, errors and omissions insurance. Professional liability insurance covers financial losses in the event of injury or damage. While general liability insurance covers injuries and damages to property.
A business owner’s policy (BOP) gives your small business protection against a wide range of claims. It does this by combining two types of coverage. Commercial general liability insurance and Commercial property insurance are both parts of its coverage.
The part of a BOP called “general liability” protects your business in case someone makes a claim against you or your business. General liability insurance protects you from lawsuits if something like a customer slipping on a wet floor. Or a faulty product causing damage to a client’s property. Or a claim that your products or services hurt someone. It can also protect you from libel, slander, and certain advertising lawsuits.
The property part of a BOP helps protect the buildings, equipment, furniture. And stock that you own, rent, or lease for your business. It helps pay to fix or replace things that are stolen, broken, or destroyed, even if they don’t belong to you but were in your care. It can also pay for things like rent, payroll, and other bills while your property is being fixed or replaced after a fire or other covered loss.
If you have employees, no matter the nature of your business, you are required by law to carry workers’ compensation insurance. Workers’ compensation insurance, also known as “workers’ comp,” is a mandatory type of coverage that will provide financial support to your staff if they sustain an injury while performing their job duties. It serves as a disability insurance pool that reimburses workers monetarily and/or provides medical care in the event of an illness or injury. If you want to learn more about the workers’ compensation laws in your state, you can visit the state by state guides on our site.
Physical dangers such as injury and property loss are ever-present in the business world. However, there are dangers associated with using technology that could affect your company. Data leaks and hacking are just two examples. Information about customers’ identities or medical histories that you store on company computers is a prime target for hackers. In order to quickly recover from a data breach or cyberattack, it is crucial that your company be covered by data breach or cyber liability insurance.
If you’re in business for yourself, it’s important to have a basic understanding of health insurance. As a first step, you should enroll in a health insurance plan. If you do not have health insurance this year, you could be fined by the government depending on what state you live in. More importantly, you and your loved ones are taking a serious risk if and when a medical emergency arises.
In addition, if you have been relying on your employer to provide health coverage, you may be in for a rude awakening when you compare prices. Since you no longer have an employer to split the cost of health insurance with, you must do so on your own. The good news is that self-employed professionals can reduce their tax liability. The quickest way is by deducting the money they spend on health insurance premiums.
How To Reduce The Cost Of Self-Employed Health Insurance
A high-deductible health plan (HDHP) is a good option for those looking to save money on health insurance premiums. A higher deductible on your health insurance plan means you’ll have to pay more out of pocket for medical care before your policy kicks in. However, the trade-off is cheaper premiums every month.
Opening a health savings account (HSA) is an option with your high-deductible health plan, making it an even better value. The funds built up in a health savings account (HSA) are exempt from federal income tax, allowing you to save tax-free for future medical expenses. It’s a good idea to consult with an EZ agent, who can explain your options and guide you toward a policy that works for your finances and your loved ones. They will assist you in locating competitive rates and suitable protection.
Self-Employed Disability Insurance
If you’re self-employed and become ill or injured and unable to work, disability insurance could help replace some of your lost income. There are both public and private options for disability insurance. The government provides some options, such as the Social Security Administration and some state programs.
When you’re self-employed, you can buy your own disability insurance policy rather than participating in a potentially more expensive group plan through your employer. You may still be eligible for a group policy through your spouse’s employer or a trade group. You may have more options with an individual policy, but the premiums may be higher. Policy features such as the waiting period, riders, and the definition of disability may be up for negotiation.
Short vs Long Term Disability Insurance
Disability coverage comes in two flavors: long term and short term. Long term disability insurance typically has an elimination period of several weeks to months and a benefit period of several years up until retirement. There may be no waiting period or one as long as two weeks before benefits begin with short term disability insurance. Although long term disability insurance that pays out until retirement age is ideal, a short term policy could be worthwhile as well. In general, shorter waiting periods and longer benefits payout periods tend to come with higher premiums.
For an additional premium, you can secure coverage that the insurance provider can’t revoke for any reason (including your failure to pay premiums) with a noncancelable policy. With guaranteed renewable policies, the insurer cannot cancel your coverage. But they can raise your premiums along with other customers in your rating class. Additional riders, such as cost-of-living adjustments (COLA), residual benefits in the event of a partial disability, premium refunds for going claim-free, premium waivers in the event of a disability, and so on, can be purchased for an additional cost.
EZ Can Help
Working independently or as a freelancer allows for more freedom and a better work-life balance. One disadvantage is that you will be responsible for arranging your own insurance. It’s essential that you do this. Since an accident or emergency can cause financial ruin if you don’t have the proper insurance. As a result, self-employed people who don’t have insurance are taking a risk by not doing so. However, EZ can help! We offer free instant quotes on business insurance for the self-employed and we can even help you find the best plans for you. Enter your zip code in the box below or call one of our licensed agents at (855) 694-0047 to get started.
Almost any time of the year, fires, floods, storms, hurricanes, and many other disasters can cause a lot of damage to homes and businesses. One of the first things a business owner should do to protect their investments from natural disasters is buy business insurance, specifically commercial property insurance. Commercial property insurance is a type of property loss coverage. It protects your business from damage caused by things like bad weather, theft, and vandalism.
This coverage is different from homeowners’ insurance in many ways. Because if a business is ruined and can’t run for a while, there are more expenses to worry about. Since business costs don’t stop if the building is in disarray, a disaster can cause a loss of business in the future. Which can lead to a loss of income while the building is being fixed. Commercial property insurance and the purchase of add-ons to the policy can help cover the costs of repairing the property and keeping the business financially stable in the meantime. But how are the rates for this type of coverage determined?
The Equation
Your underwriter will use all of your data and information you send to plug into an equation to figure out the premium. To start you’ll submit a statement of values (SOV) to your insurance company. A SOV is a thorough list of your assets that your insurance company will use to figure out how much it would cost to replace all of your business’s property and equipment. The total sum of your SOV is now added to your expected business income for the upcoming year. Giving you your total insurable value (TIV).
Your underwriter will then take your TIV and multiply it by your exposure risk rate, which is decided by the rating agency your insurer uses, divided by $100. This sum will give you your premium. Say your TIV is $1,000,000, and your exposure risk rate is $0.4 per every $100. The equation would be $1,000,000 x $0.4/100=$4000 annual premium which is about $333 a month. There are a lot of things that go into getting the numbers to put into the equation though. Things that affect your premium are:
Claims History
The first thing that many insurers look at is how your history of claims compares to that of other businesses in your field that are about the same size. If your business has more or worse claims than others, you’ll have to pay more. However, there is a way to keep your claims at a minimum, or fix the claims history you already have. Accident and injury claims can all be reduced with a good safety program at work and careful risk management, especially when compared to other companies.
Regular safety inspections and a review of safety management to find risks can help you find possible problems so you can fix them before they cause problems. Accident and injury claims can also be cut down by making sure your workers have the proper training on the equipment that they’re working with. If you have a bad claims history and after you implement these safety regulations, you can show your insurer that you have significantly less claims over the course of a year or two. Your insurer will then most likely lower your premium.
Property Construction
Coverage rates can be affected by the materials used to build the business property and by how well it is kept. Buildings made of fireproof materials like brick or stone, or businesses with fireproof walls and doors, will cost less to cover than a building made of wood. This is because a property built with fireproof materials is less risky to cover than one built with wood or other materials that burn more easily. Furthermore, having up-to-date fire sprinklers and alarm systems can also help lower insurance costs. Also, newer buildings and those with recently updated electrical wiring, plumbing, and heating, ventilation, and air conditioning (HVAC) systems often cost less to insure than older properties that need more upkeep.
Industry
Commercial property insurance rates can also be affected by how a building is used. A restaurant or welding business has more risks than a flower shop or a dress store due to the nature of the business, so their insurance rates will be higher. Also, a business’s insurance rates are likely to go up if it shares space with another business that has a lot of possible risks.
Property Location
You know that saying, “location, location, location”? It doesn’t just mean pick a busy area with potential customers, it also means pick a safe area. Your insurance company looks at every possible risk, and we do mean every single one. Any possible risks in the area that your business is located heavily impacts your premium. Risks can include the crime rate, how often natural disasters happen in that area, your proximity to oil plants or businesses that use flammable materials. Location doesn’t just negatively affect your premiums, it can also lower them. Your commercial property insurance can go down if your business is close to places where emergency services are readily available. Such as a fire or police station or even just a fire hydrant. Your business being near emergency personnel means it’s more likely they’ll respond quickly and minimize the damage compared to a business that operates further away.
Coverage
How much coverage you need is the main factor in your premium. To find out how much coverage you need you have to find out how much both the building and anything in it are worth. You don’t want to get a coverage limit that is less than what it would cost to replace all of your equipment or the building. For example, if all together it would cost $1million to replace everything you’d need, at least that much coverage, if not more because when it comes time to actually replace everything, more than likely it will be more expensive than you originally planned.
You should also factor in inflation. So, you’ll want to give yourself some wiggle room just in case. It’s also very important to look over the assets on your statement of values at least once a year. This makes sure that as your business grows and changes, the limits of your insurance will still meet your needs.
How To Lower Your Commercial Property Rates
By following a few important tips business owners can save even more money on their commercial property insurance costs. These can make sure that the business isn’t losing money on insurance costs, while still having sufficient coverage.
Review Your Policy
When a business owner wants to find ways to cut their insurance costs, one of the first things they should do is read their policy carefully. Some people will find that they have more insurance than they need, which means they pay for unnecessary coverage. Changes in the business have sometimes made it so that less coverage is needed. For example, a company may have insurance for tools or a vehicle they no longer have.
Pay Premium In Full
You can choose to pay your commercial property insurance premium entirely, once a year or in monthly installments when you buy the coverage. However, paying the full year in advance is cheaper than paying every month.
Bundle
Companies can bundle their insurance plans to save money, just like many people do with their home and car insurance. A business owners policy, or BOP, is a package of insurance plans that many insurance companies offer to small and medium-sized businesses. Most company owners’ policies include general liability insurance, commercial property insurance, and business interruption insurance at a cheaper price. Any business that buys these three policies individually should think about bundling them to save money.
Raise Your Deductible
A deductible is the amount that the insured has to pay out of their own pocket before the insurance company pays the rest of the claim. Deductibles are chosen when an insurance contract is made. But they only have to be paid when a claim is made. By raising the amount of a deductible, you can lower the amount you have to pay out of pocket.
Policyholders need to look over their policies carefully to see if they can pay a bigger deductible for an accident. When you raise your deductible, your insurance costs go down, but you take on more risk. Fees are often charged each time something happens, not just once a year. Find out what a good deductible for your business is by talking to your insurance agent or provider. Increasing your deductible might not be a good idea if you take on more risk than your business can handle.
Minimize Risks
When giving a quote for a commercial property insurance policy, insurance companies look at a number of things. Such as the amount of risk a business faces. There are several safety precautions a business can take in order to minimize their risk to an insurance company. If a policyholder’s buildings and cars don’t already have a security system, they might want to think about buying one. Businesses can also do things like put sprinklers in your building, work area, or warehouse to lower your risks of fire and possibly lower their insurance rates. Modern fire alarms and smoke monitors should also be put in every business building.
Look For Discounts
Even if your insurance company doesn’t advertise discounts, it doesn’t hurt to ask. Policyholders should always talk to their insurance company to find out if they offer deals or if there are other ways that they can save money. Some insurance companies will give you a discount if you stay with them for a long time. While others will give you a discount if you start a safety program.
How EZ Can Help
Every business is different in terms of what risks it faces, how much its property is worth, and how much coverage it needs. Commercial property insurance prices can change a lot from one company to the next. But businesses can still find ways to lower their insurance costs. The first step to lowering your business property insurance costs is to talk to an experienced insurance agent.
EZ can help whether you need group health insurance for your workers or commercial insurance to protect your business. Our agents work with the best insurance companies in the country to make sure you and your workers get the best insurance. In fact, we can find you the best coverage for your budget and save you hundreds of dollars a year. Feel free to call us at 877-670-3538 if you have any questions or enter your zip code to get started on a quote.
When it comes to buying insurance for your business, not knowing the difference between claims-made and occurrence plans can be an expensive error. Getting a claims-made or occurrence policy will have a significant impact not just on the cost of your coverage. But also, on the lifecycle of your coverage. Professional liability and directors and officers policies are often claims-made policies, whereas most general liability policies are occurrence policies. Let’s take a closer look at what these two terms mean for you and the coverage you’re buying.
Occurrence Policy
An occurrence policy will cover claims for acts or incidents that occurred while your coverage was active. Even if your insurance expired or you canceled it, if the event occurred during the policy period, the claim would be covered. Because of the length of coverage, these policies can be more expensive than claims-made policies.
Claims-Made Policy
A claims-made insurance only provides coverage if you file a claim within the policy period. Your insurer will provide coverage if an insurable event occurred after the policy’s retroactive date. A claims-made policy covers claims made while your insurance is still in effect. You will be uninsured if you terminate your policy or if you fail to pay your premiums and the insurer cancels it. D&O insurance is a common type of claims-made coverage, as is professional liability insurance, commonly known as E&O or malpractice insurance.
Medical malpractice insurance, for example, is frequently offered as a claims-made policy due to the high related expenses. But it may have lower average premiums than if offered as an occurrence-based policy. You have the option to purchase an extension for “tail coverage.” This is an addition to a claims-made policy that will expand your contract to include incidents that took place while your policy was active, even if the claims are submitted after your policy has expired. It should be noted, however, that this add-on only covers a limited time. Usually up to 3-5 years after the insurance expires.
Retroactive Date
Our policy covers incidents that occur on or after a specific date. Assume you have professional liability insurance on a claims-made basis. Your coverage begins in January 2024 and is retroactive to November 2019. If a client sues you in February 2024 for an incident that occurred in December 2019. Your insurer may be able to assist in covering the claim because it occurred after your retroactive date and the claim was reported during your policy period.
Extended Reporting Period
This helps to cover claims filed after your coverage has expired for a defined period of time. It usually lasts between 30 and 60 days. So, if your insurance expires in December 2024 and you have a 60-day extended reporting period. Your insurer may be able to assist you in covering claims made during this time period. This is also referred to as tail coverage.
Limits
When it comes time to buy your insurance coverage, you must decide on an aggregate limit. An aggregate limit is the highest amount of coverage that an insurer is willing to pay for the total amount of compensated losses during the policy period. In essence, you should consider how much coverage you wish to have.
Occurrence Limits
Policy limits apply only to situations that fall within the designated policy term. Only claims generated by events occurring during the policy term and eventually paid will count towards the available policy limits. It is important to remember that defense costs are normally covered outside of the policy limitations and have no bearing on the amount of insurance offered. Occurrence insurance limits, on the other hand, will be reset every year upon renewal.
As a result, if your limit is $1 million and $500,000 in claims were paid during the previous policy year, your renewal limit will be $1 million as well. However, you would still have $500,000 remaining on the last policy year for any later claims. As a result, you may have policy limits available for future use to insure previously unknown claims.
Claims-Made Limits
The essential factor in calculating claims-made limits is whether or not the policy covers earlier acts. Furthermore, unlike an occurrence policy, these insurance contracts usually include defense costs up to the set limit. As a result, as policies renew, the policy limit might be extended to cover longer periods of time than the standard 12 months. And defense costs will reduce the available insurance. As a result, if you buy a $1 million claims-made policy and pay $500,000 in claims that year, any future claims reported after the expiration date should be covered by the subsequent renewal via a Full Prior Acts Endorsement or a Retroactive Date Endorsement.
As a result, your renewal policy limit would cover both the prior policy’s past unknown claims as well as any events that occur during the current year. In this regard, your current claims-made insurance protects you for a period of more than a year. Unlike an event policy, the expired policy does not provide any residual limits to cover you from prior incidents. You must use your current policy limit to cover any unknown historical claims. However, if you obtained “tail coverage” under your expired insurance, your past claims would be addressed while your current policy limit would be unaffected.
Claims-made plans often establish premiums for the following policy year’s claims, however an occurrence contract will price for both current and future year claims. As a result, you should examine the premium dynamics listed below:
Step Rates
In the case of claims-made, both the event and the reported claim must occur during the coverage period. This indicates that the risk of loss in the first year of the policy is relatively low, and so the first-year premiums for claims-made coverage are often lower. As you renew your insurance policy, the period of coverage is extended through a Full Prior Acts or Retroactive Date endorsement, exposing the insurance company to extra risk. Because prior actions are included, premiums will change incrementally over the first four years of a claims-made policy, which is known as the claims-made step factor.
Mature Rates
By the fifth year of claims-made coverage, the risk of loss should have leveled out, indicating that the claims-made step factor has matured. Mature claims-made rates and regular occurrence coverage rates end up costing around the same.
Advantages and Disadvantages
Even when you understand the benefits and drawbacks of claims-made and occurrence plans. It’s difficult to prove that one is superior to the other. The truth is that the only way to decide which type to purchase is to determine which one best meets the needs of your company.
Convenience
One of the primary benefits of occurrence plans is that they need less work to own and manage them. This implies that if you change insurance companies, you won’t have to worry about being covered for incidents that occurred while you were insured by someone else.
If you transfer insurers or cancel your insurance, policies become a little more difficult. If you do decide to transfer carriers you must get a Retroactive Date or a Prior Acts Endorsement. As well as maybe “tail coverage” to protect yourself. On the other hand, if you do nothing, any past claims that arise will be lost, and you will be uninsured.
Coverage
Occurrence plans also provide better peace of mind because the limit is only imposed for a 12-month period. On the other hand, because it may apply to many years of risk, your limit may be exhausted sooner.
Cost
As we’ve noted above, claims-made policies are cheaper than occurrence policies. This is because occurrence policies still cover claims even after the insurer has stopped receiving premiums. So, the more expensive premiums help make up for the money an insurer may have to pay out for a future claim. With claims-made policies, you’re actively paying premiums when the insurer is taking on the risk. So, it costs them less and in turn costs you less.
Working With EZ
We understand that there is a lot to learn while shopping for commercial insurance. However, the effort spent studying is worthwhile. Getting the correct type of insurance for your business can make the difference between safeguarding it and losing everything you’ve worked for. Keep in mind that you don’t have to go it alone – EZ.Insure is here to assist you. Throughout the shopping experience, we focus on each customer individually and provide a helpful environment. To get a quote enter your zip code in the bad below. We want to assist you in making the best decision and saving the most money. There is no bother, no obligation to purchase, and no more worries. Best of all, everything is absolutely free. Call one of our agents immediately at (855) 694-0047 to get started.
Risk management is the core of commercial insurance. You know you have to protect your business from lawsuits, like if an employee is injured on company property, as well as from disasters such as fire or theft. However, not all damages are physical and not all claims are made by third parties. There are times when you will need errors and omissions (E&O) insurance or employee practices liability (EPLI) coverage. So, let’s examine what these policies cover and where they differ.
E&O Insurance
It’s easy to imagine a construction site requiring liability insurance in the event of an injury, or a supermarket needing a policy to cover a customer who slips and falls in the store. A general commercial liability insurance policy would cover these types of accidents. Product liability insurance would protect against a product’s failure. This is all damage that we typically hear about. However, what about damages that aren’t visible? If your company provides clients with advice or services, you likely need E&O (also known as professional liability). In the past professional liability was for professionals such as doctors or lawyers, whereas E&O was for semi-professionals such as accountants or financial advisors. But now, the terms are used interchangeably. E&O insurance protects you against claims of:
Bad advice
Many clients rely on professionals, such as lawyers and consultants, for sound, practical, and specialized advice. If a client receives advice from a professional and their expectations are not met, the client may sue. A client may file a lawsuit, for instance, if a personal trainer advises their client to do certain workouts or stretches that lead to muscle strains or injuries. Another example, say a hairdresser advises a client to use a certain product for their hair that leaves them with damaged hair or skin problems.
Negligence
When a professional fails to provide the standard level of care they are negligent. A judge may find a doctor negligent if, for instance, he or she fails to review a patient’s chart before prescribing an allergen-containing medication. If a financial advisor disregards all warnings about a company’s financial health and recommends stocks that ultimately fail, they can be sued for negligence.
Slander or libel
If a professional publicly expresses unfavorable or incorrect opinions about their client, they can be sued for slander. False or derogatory written statements are considered libel. Either scenario can lead to a costly lawsuit.
Omissions
An omission is the failure to provide important information that could alter a client’s decisions. For instance, if a real estate agent fails to mention that a home is in a flooding zone or has extensive damage from past problems the new homeowner could sue them for not giving them all of the facts.
Mistakes
Even the most professional people in the world can make mistakes. If a client is harmed or loses money due to an error made by a professional such as an attorney, doctor, accountant etc. They could file a lawsuit even though the error was not intentional.
Cost of E&O
The cost of E&O is determined by a number of variables, including the type of business, its location, and any prior claims you’ve had to pay out. Due to the increased underwriting risk, E&O insurance may be more expensive or have less than favorable terms for a person or business with a lengthy history of litigation issues. On average, E&O insurance can cost between $500 and $1,000 annually per employee.
What It Doesn’t Cover
E&O policies do not cover criminal prosecution and certain non-listed liabilities that may arise in civil court. This includes illegal acts, deliberate wrongdoing, and criminal activity. Typically E&O insurance does not cover bodily injury caused by your business, as this is covered by general liability insurance. E&O insurance also may or may not cover temporary employee’s claims resulting from work performed prior to the policy’s start date, or claims in different jurisdictions. It may also exclude cyber related information leaks, employee injuries, and discrimination claims.
EPLI
All of the above pertains to claims made by clients or customers against your company. However, how do you protect yourself from claims filed by your employees? Employers are protected by EPLI against lawsuits filed by current, former, or even prospective employees. In the same way that you have a duty to keep your customers safe and provide them with the best service, you also have a duty to treat all employees and potential hires fairly. This type of insurance kicks in when allegations are made such as:
Sexual harassment
Discrimination
Wrongful termination
Breach of employment contract
Negligent evaluation
Failure to employ or promote
Wrongful disciplinary actions
Deprivation of career opportunity
Wrongful infliction of emotional distress
Mismanagement of employee benefit plans
Keep in mind, however, that this type of insurance will cover owners, managers, and other employees if a claim is made against them, but will not cover anyone who has intentionally acted illegally.
The cost of EPLI depends on the nature of your business, the number of employees you have, and various risk factors. Such as whether or not your company has been sued in the past for employment practices. The policies will reimburse your business for the costs associated with defending a lawsuit and for any judgements or settlements. Whether your company wins or loses a lawsuit, the policy will cover legal fees. In addition, policies typically exclude coverage for punitive damages and civil or criminal fines. EPLI policies exclude liabilities covered by other insurance policies, such as workers’ compensation.
Preventing Claims
To prevent employee lawsuits, start with educating your managers and employees so that you minimize these problems in the first place. For starters:
Develop effective hiring and screening programs to prevent hiring discrimination.
Post corporate policies throughout the workplace and include them in employee manuals so that everyone is aware of them.
Show employees what to do if they experience sexual harassment or discrimination at the hands of a supervisor.
Make sure that supervisors are aware of the company’s stance on unacceptable behaviors.
Document everything that occurs and the steps taken to prevent and resolve employee conflicts.
What it Won’t Cover
EPLI would not cover claims resulting from intentionally dishonest or criminal conduct such as theft or intentional property destructions. It also does not cover employee illness or work-related injuries as these are covered with workers’ compensation. In addition to intentional or criminal acts, the following situations are typically not covered by EPLI:
Professional errors – If your company makes a professional error you’ll need malpractice or E&O insurance to protect these situations.
Unemployment insurance – Most states have a government agency dedicated to handling unemployment benefits claims, EPLI will not cover these.
Unpaid wages – Typically, failing to pay wages for owed or completed work will not be covered by EPLI policies.
Fines and penalties – EPLI will not cover civil or criminal fines.
Limited EPLI Coverage
In addition, you may find that your EPLI policy provides limited coverage or none at all for certain types of employment practice claims. Below we’ve listed the examples of these situations where coverage is typically limited.
Breach of written employment contract – If any employee alleges that you violated your employment contract, whether the agreement was written or implied (EX: made in conversation) can be important. While most EPLI policies will cover the cost of claims related to implied contacts, written contracts may be handled differently by some policies. Some EPLI policies may cover written contract claims whereas many others will only cover legal defense costs or nothing for them.
Wage and hourly claims – When an employee claims that their employer did not pay them in a timely manner. Since a number of costly and high-profile overtime pay claims have been filed in recent years, most EPLI policies will exclude or specify sub limits for wage and hourly claims because the risk exposure is too great.
Immigration violations – The majority of insurers do not offer EPLI coverage for federal, state, or local immigration-related violations (such as failing to check an employee’s immigration status). If so, it is typically a limited edition (or “endorsement”) to your EPLI policy.
Working With EZ
The world of commercial insurance can be extremely confusing, as it’s filled with a variety of policies that cover a variety of individuals and situations, as well as acronyms for a majority of policies. It’s important to evaluate your needs and get the best protection available. Remember that general commercial liability insurance does not cover everyone and everything, and you may need to supplement your policy with E&O and EPLI coverage.
If you need help making sense of the business insurance alphabet soup, we’re here to help! You will be assigned a personal agent by EZ.Insure, and you will never receive unwanted persistent phone calls. Our agents are highly trained and knowledgeable and will ensure you receive the exact coverage you need. Not to mention, we do all of this for free! To get your free instant quotes enter your zip code into the bar below. Or give one of our agents a call directly at (855) 694-0047.
Embarking on a business venture is an exciting journey filled with possibilities and opportunities. However, it’s essential to be prepared for the unexpected challenges that may arise. One crucial aspect of this preparation is securing the right business insurance. Each industry faces unique risks. So, understanding the types of insurance coverage needed is key to safeguarding your business. As well as ensuring its long-term success. In this article, we’ll explore common business industries and the types of business insurance they may need. Shedding light on why these policies are essential.
Types Of Business Insurance
Before we go over what types of insurance different industries need. Let’s look at the different types of business insurance policies available.
General liability insurance is a fundamental type of business insurance. It provides coverage for a range of common risks and liabilities faced by businesses. Also known as commercial general liability (CGL) insurance. It is designed to protect businesses from financial losses associated with third-party claims of bodily injury, property damage, and personal injury. General liability typically covers:
Bodily Injury
Bodily injury coverage helps protect your business in the event that someone is injured on your premises or as a result of your business operations. This coverage can help pay for medical expenses, and legal fees. As well as any potential settlements or judgments if your business is found liable for the injury.
Property Damage
Property damage coverage provides protection if your business causes damage to someone else’s property. This could include damage to a client’s home or office space. Or damage to other physical assets belonging to third parties.
Personal and Advertising Injury
Personal and advertising injury coverage is designed to protect against non-physical injuries, such as libel, slander, or infringement of copyright. If your business is accused of damaging another party’s reputation through advertising or other communications, this coverage can help cover legal costs.
Legal Defense
General liability insurance typically covers the costs of legal defense, including attorney fees, court expenses, and settlements or judgments. This is crucial for businesses facing lawsuits, even if the claims are ultimately determined to be groundless.
Product and Completed Operations
If your business manufactures, sells, or distributes products, or if you provide services, products and completed operations coverage can protect against claims arising from defects in products or services that cause bodily injury or property damage.
Medical Payments
Medical payments coverage helps pay for medical expenses if someone is injured on your premises. Regardless of who is at fault. This coverage is usually more limited than bodily injury coverage, but can provide swift reimbursement for minor injuries without the need for a lawsuit.
Business Property Insurance
Business property insurance, also known as commercial property insurance, is a type of insurance coverage that protects a business’s physical assets. Including buildings, equipment, inventory, furniture, and other property, against various risks and perils. This insurance is crucial for businesses to recover from financial losses that may result from damage or loss of property due to covered events. The key coverage of business property insurance are:
Physical Assets – Business property insurance provides coverage for the physical assets owned or leased by a business. This includes the building itself, if applicable, as well as contents such as inventory, equipment, furniture, fixtures, and signage.
Covered Perils – Policies typically specify the perils or events that are covered. Common covered perils include fire, theft, vandalism, windstorms, hail, explosions, and certain types of water damage. It’s important for businesses to carefully review and understand the specific perils covered by their policy.
Business Interruption – Many business property insurance policies include business interruption coverage. This component helps businesses recover lost income. And cover ongoing expenses if the business is temporarily unable to operate due to a covered event, such as a fire or natural disaster. It can include coverage for rental income, payroll, and other fixed costs.
Replacement Cost – Business property insurance policies may offer coverage based on either replacement cost or actual cash value. Replacement cost coverage reimburses the cost to replace or repair damaged property without deducting for depreciation, providing a more comprehensive form of coverage. Actual cash value coverage considers depreciation, resulting in a lower reimbursement amount.
Cyber liability insurance is a type of insurance coverage designed to protect businesses from financial losses and liabilities associated with cyber-related risks and events. As businesses increasingly rely on technology and digital assets. The exposure to cyber threats such as data breaches, hacking, and other cybercrimes has become a significant concern. Cyber liability insurance helps businesses mitigate the financial impact of these risks by providing coverage for various expenses and liabilities.
Data Breach Response – Coverage for expenses related to responding to a data breach. This may include the costs of notifying affected individuals, providing credit monitoring services, and managing public relations efforts to minimize reputational damage.
Legal and Regulatory Expenses – Protection against legal costs and regulatory fines that may result from a data breach or other cyber incident. Cyber liability insurance can cover the expenses associated with legal defense, investigations, and compliance with data breach notification laws.
Data Restoration – Coverage for the costs of restoring or recreating lost or damaged data as a result of a cyber incident. This may include expenses related to data recovery and reconstruction efforts.
Business Interruption – Compensation for financial losses resulting from a cyber incident that disrupts business operations. This coverage can help replace lost income and cover ongoing expenses during the period when the business is unable to operate normally.
Cyber Extortion – Protection against costs associated with cyber extortion attempts, such as ransomware attacks. This coverage may include payments made to cybercriminals to restore access to data or systems. As well as expenses related to negotiating with extortionists.
Forensic Investigations – Reimbursement for the costs of investigating a cyber incident to determine the extent of the breach, identify the source of the attack, and implement measures to prevent future incidents.
Professional Liability Insurance
Professional liability insurance, also known as errors and omissions (E&O) insurance, is a type of insurance coverage designed to protect professionals and businesses that provide professional services from claims of negligence, errors, or omissions in the course of their work. This insurance is particularly relevant for individuals and companies in service-based industries where clients rely on their expertise and advice.
Professional Negligence – Coverage for claims arising from alleged professional negligence, errors, or mistakes in the performance of professional services. This can include errors in judgment, faulty advice, or failure to meet the standard of care expected in the industry.
Legal Defense Costs – Reimbursement for legal expenses associated with defending against claims of professional negligence. This can include attorney fees, court costs, and settlements or judgments resulting from lawsuits.
Breach of Duty – Coverage for claims related to a breach of professional duty. This could involve a failure to perform services as promised, failure to meet contractual obligations, or other breaches of professional duty.
Defamation – Protection against claims of defamation, libel, or slander arising from the provision of professional services. This coverage can address legal costs and settlements associated with damage to a person’s reputation.
Copyright Infringement – Coverage for claims of copyright infringement related to the creation or dissemination of professional work. This is particularly important for professionals in creative industries where intellectual property is a significant concern.
Workers’ compensation insurance, commonly referred to as workers’ comp, is a type of insurance that provides financial and medical benefits to employees who suffer job-related injuries or illnesses. It is a crucial component of the social safety net and is designed to protect both employees and employers. It helps injured or ill employees by providing coverage for medical expenses, rehabilitation costs, and a portion of lost wages. At the same time, it protects employers from lawsuits related to workplace injuries.
Medical Benefits – Workers’ compensation insurance covers the costs associated with medical treatment and care for work-related injuries or illnesses. This includes doctor visits, hospital stays, surgeries, medications, rehabilitation, and other necessary medical services.
Income Replacement – If an employee is unable to work due to a work-related injury or illness, workers’ compensation provides partial wage replacement. Typically, a percentage of the employee’s pre-injury wages is paid to help cover living expenses during the period of disability.
Disability Benefits – Disability benefits are provided to employees who experience a temporary or permanent disability as a result of a work-related injury or illness. The level of disability benefits is determined by the severity and nature of the disability.
Death Benefits – In the unfortunate event of a fatal workplace injury or illness, workers’ compensation insurance provides death benefits to the surviving dependents of the deceased employee. This includes compensation for funeral expenses and financial support for the dependents.
Business Interruption Insurance
Business interruption insurance, also known as business income insurance, is a type of insurance coverage that provides financial protection to businesses in the event of a covered loss that disrupts their normal operations. This coverage is designed to help businesses recover from the financial impact of a temporary suspension of operations due to covered perils, allowing them to maintain financial stability during a challenging period.
Income Loss – Business interruption insurance covers the loss of income that a business may experience due to a covered event, such as a fire, natural disaster, or other insured peril. This coverage extends to the profits that would have been earned during the period of interruption.
Fixed Costs – In addition to income loss, the policy typically covers certain fixed costs that continue even when operations are temporarily halted. This can include rent or mortgage payments, utilities, and certain other ongoing expenses necessary for the business to resume normal operations.
Covered Perils – Business interruption insurance is triggered by specific perils or events that are covered by the policy. Common covered perils include fires, natural disasters, vandalism, and other events as outlined in the insurance contract. It’s important for businesses to understand the perils covered and, if needed, consider additional endorsements for specific risks.
Product Liability Insurance
Product liability insurance is a type of insurance coverage designed to protect businesses from financial losses and legal liabilities arising from claims related to defects or problems with products they manufacture, distribute, or sell. This insurance is crucial for businesses involved in the production and sale of goods, as it helps mitigate the financial impact of legal expenses, settlements, or judgments resulting from product-related claims.
Bodily Injury and Property Damage – Product liability insurance provides coverage for claims related to bodily injury or property damage caused by a defect in a product. If a product is found to be defective and causes harm to a consumer or their property, the insurance can help cover the associated medical expenses, repair costs, or legal fees.
Legal Defense – One of the primary benefits of product liability insurance is the coverage for legal defense costs. If a business faces a lawsuit related to a defective product, the insurance will typically cover the expenses associated with hiring attorneys, court fees, and other legal costs.
Manufacturing or Design Defects – Product liability insurance typically covers claims arising from both manufacturing defects and design defects. Manufacturing defects occur during the production process, while design defects are inherent flaws in the product’s design that make it unreasonably dangerous.
Employment Practices Liability Insurance (EPLI)
EPLI is a type of insurance coverage designed to protect businesses and employers from the financial consequences of employment-related lawsuits. These lawsuits can arise from various employment-related issues, such as wrongful termination, discrimination, harassment, retaliation, and other violations of employment laws. EPLI provides coverage for legal defense costs, settlements, and judgments associated with such claims.
Wrongful termination claims – Protection against claims of wrongful termination or dismissal, where an employee alleges that their termination violated employment contracts, implied contracts, or anti-discrimination laws.
Discrimination claims – Coverage for claims of discrimination based on factors such as age, gender, race, religion, disability, or other protected characteristics. EPLI helps businesses address allegations of discriminatory practices in hiring, promotions, and other employment decisions.
Harassment claims – Protection against claims of workplace harassment, including sexual harassment or other forms of harassment that create a hostile work environment. EPLI assists in covering the costs associated with investigations, legal defense, and potential settlements.
Third-party liability – Some EPLI policies may provide coverage for claims brought by non-employees, such as clients, customers, or vendors, alleging wrongful employment practices.
Commercial auto insurance is a type of insurance coverage designed to protect businesses and their vehicles used for business purposes. This insurance provides financial protection in the event of accidents, injuries, or property damage involving vehicles owned or operated by a business. Commercial auto insurance is crucial for companies that rely on vehicles for various business activities. Including transportation of goods, services, or employees.
Business Owned Vehicles – Commercial auto insurance covers vehicles owned or leased by a business and used for business purposes. This can include cars, trucks, vans, and other types of vehicles essential to the business’s operations.
Liability – Liability coverage is a fundamental component of commercial auto insurance. It provides protection against bodily injury and property damage that the business may be legally responsible for in the event of an accident. This coverage helps pay for medical expenses, repair costs, and legal expenses associated with third-party claims.
Collision – Collision coverage is designed to cover the cost of repairs to a business-owned vehicle in the event of a collision, regardless of who is at fault. This coverage helps businesses get their vehicles back on the road quickly after an accident.
Uninsurance/Underinsured Motorist – This coverage protects the business and its drivers in the event of an accident with a driver who either has no insurance or insufficient insurance to cover the damages. Uninsured/underinsured motorist coverage helps bridge the gap in such situations.
Industries
As we said, every industry is different. While most policies can help all of these industries there are certain policies that each industry needs more than the others.
Retail
The retail industry is a dynamic and ever-evolving sector that thrives on customer interactions, sales, and the management of diverse inventory. Amidst the excitement of running a retail business, it’s crucial for owners to prioritize risk management by investing in the right insurance policies. From protecting against potential liabilities to mitigating financial losses. A tailored insurance strategy can be the key to long-term success in the retail landscape. Retail companies typically need:
General liability insurance.
Commercial property insurance.
Workers compensation insurance.
Business interruption insurance.
Product liability insurance.
Cyber liability insurance.
Professional Offices
The professional office industry is a diverse and dynamic sector encompassing various professions. From legal and accounting services to consulting and creative endeavors. Amid the hustle and bustle of daily operations, it’s paramount for professionals in this industry to prioritize risk management by investing in the right insurance policies. From protecting against potential liabilities to mitigating financial losses, a well-tailored insurance strategy is crucial for ensuring the sustained success of professional offices. These types of companies need:
Professional liability insurance.
General liability insurance.
Cyber liability.
Business property insurance.
Workers’ compensation insurance.
Employment practices liability insurance (EPLI).
Construction
The construction industry is a powerhouse of growth and development, transforming blueprints into structures that shape communities. Amid the dynamism and innovation, construction businesses face a myriad of risks that can impact projects, finances, and reputations. To safeguard against unforeseen challenges, it’s crucial for construction companies to have a robust portfolio of business insurances. From protecting against accidents on the job site to addressing potential legal liabilities, the right insurance coverage is the cornerstone of a successful construction business.
General liability.
Commercial property.
Workers’ compensation.
Professional liability.
Commercial auto.
Food Service
The food service industry is a vibrant and dynamic sector, offering a myriad of culinary delights to consumers worldwide. While chefs and restaurateurs focus on creating exceptional dining experiences. It’s equally crucial for businesses in the food service industry to prioritize risk management through comprehensive business insurance. From protecting against liability claims to ensuring the safety of employees and patrons. The right insurance coverage is the key ingredient for sustained success in the food service realm.
General liability insurance.
Commercial property insurance.
Business interruption insurance.
Product liability insurance.
EPLI
Working With EZ
In every industry, the importance of business insurance cannot be overstated. These policies act as a safety net. Providing financial protection and peace of mind as you navigate the challenges of running a business. Whether you’re in retail, technology, construction, healthcare, or any other industry. Understanding your unique risks and securing the appropriate insurance coverage is a proactive step toward building a successful business. Consult with insurance professionals to tailor a policy that suits your specific needs. Ensuring that your business is well-prepared for whatever the future may hold.
No matter what type of business insurance you need, EZ can help. Our agents work with the top insurance companies nationwide to make sure you find the best insurance for your business. In fact, we can save you hundreds of dollars a year by working with your budget to find you the best coverage. If you have questions, feel free to give us a call at 877-670-3538 or enter your zipcode into the box below for free instant quotes.
