Basic Property & Casualty

Coverage Descriptions                                         Go to Commercial Insurance Glossary

MULTI-PERIL POLICY: Provides comprehensive Property and General Liability insurance, tailored to the needs of the insured, subject to a package discount from premiums for similar insurance written under separate policies. Building coverage and Personal Property coverages are available on a named peril basis or an all risk basis. Loss of earnings, rents, extra expense, scheduled glass and signs as well as computer equipment may also be covered by endorsement. Liability coverage is included in the "package policy" to properly cover your liability risks. Employee dishonesty, extortion and money is covered separately by the broadest protection available for these risks under a Comprehensive Bond policy. Boiler equipment, telephone, fax and copier equipment, electrical apparatus, air conditioning equipment and machinery of all kinds are eligible for coverage under separate "Boiler and Machinery" or systems breakdown policy. Insurance may be provided to include Machinery breakdown under the package. Business Interruption insurance and Extra Expense insurance may be included for loss arising from covered accidents.

PROPERTY COVERAGE: Property coverage not only includes the buildings you own or lease.  Insurance on real property may be insured for:

DEMOLITION INSURANCE: For an additional premium, the property policy may be extended to cover a loss resulting from the enforcement of any state or municipal law or ordinance which necessitates, in rebuilding, the demolition of any part of the insured building not damaged by fire or other hazard.

GLASS INSURANCE: Insures replacement of plate glass windows and structural glass broken or accidentally or maliciously damaged by acid or chemicals, including supporting frames and bars and cost of lettering and ornamentation if covered specifically-or a cash payment covering actual cost of replacement.

SPRINKLER LEAKAGE: For buildings equipped with sprinklers. Insures against all direct loss to building or contents as result of leakage, freezing or breaking of sprinkler installations.

FLOOD INSURANCE: Covers buildings and/or their contents on an actual cash value basis against direct loss by flood, and is written in areas declared eligible by the Federal Flood Program.

EARTHQUAKE INSURANCE: Covers damage caused by earthquake by attachment of an Earthquake Extension endorsement or form to a Package policy. The peril is basically excluded in standard provisions Property insurance forms.

BUSINESS PERSONAL PROPERTY: Contents coverage of a Building and Contents form takes care of this exposure to loss, with special attention to improvements and betterment's to non-owned buildings. Forms and endorsements for use with the property policy in this category includes personal business property of the Insured coverage applies to all contents and personal property belonging to the insured, located as described. Tenant's improvements and betterment's are included unless specifically insured or indicated to be excluded. Coverage also includes the insured's use interest in personal property of others for the value of labor charges furnished, performed or incurred by the insured. Personal Property of Others coverage may be made effective under the form to insure personal property of customers and others in the insured's care, custody or control.

REPLACEMENT COST ENDORSEMENT: Provides coverage on the basis of replacement cost for owned property consisting of furniture, fixtures, machinery and equipment of the nature of personal property as distinguished from real property, including incidental supplies, and improvements and betterment's made to a building structure by its tenant.

INLAND MARINE INSURANCE: Protection against loss of paper having a high monetary value, especially while in transit, is the principal need that any business would have for Inland Marine insurance. This is a good example of how Inland Marine underwriters, with their flexible procedures, can handle specialized activities. Policies that are available for this business classification include:

SIGN COVERAGE: Insures electrical and neon signs against direct loss or damage, except loss of use, internal explosion or blowout, short circuit, wear and tear, deterioration and damage sustained while being worked upon.

VALUABLE PAPERS: Covers loss or destruction of valuable papers, notes, records, loan lists. This is all risk insurance that covers at the premises, in transit and temporarily at the premises of others.

REGISTERED MAIL: For insuring shipments of bonds, coupons, notes, legal tenders, gold and silver coin, bullion and gold dust, certificates of stock and similar securities, including currency and postage stamps, from time of deposit and registration at post office until delivered at place of address. This is of utmost importance to most business.

PARCEL POST INSURANCE: Covers packages shipped by registered or unregistered mail or parcel post against all risks of transportation, from time property is placed in custody of post office until arrival at stated address. A first class mail policy covers loss of bonds, coupons, stock certificates and other securities, on an all risk basis, when shipped by first class mail and first class air mail.

TIME ELEMENT INSURANCE: Applicable Time Element coverages include:

EXTRA EXPENSE INSURANCE: This form attaches to the standard property policy, insuring against payment of additional expense while operating from temporary quarters due to damage by fire or other insured hazard. A very practical coverage for most businesses which could continue operations, even at increased cost, regardless of damage to permanent quarters.

BUSINESS INTERRUPTION: Covers loss of gross earnings as a result of interruption of operations by damage or destruction, due to specified perils, of building or contents. The measure of recovery is the reduction in gross earnings directly resulting from interruption of business by perils insured against, less charges and expenses that do not necessarily continue. Payroll expense may be fully covered, covered for a specified number of days, or excluded.

RENTAL VALUE INSURANCE: For owners of buildings. It protects building owner against loss of income where rentals have been interrupted or rental values impaired by occurrence of any of the hazards insured against The building itself may often has numerous tenants and is a considerable income factor each month.

DATA PROCESSING EQUIPMENT POLICY: Covers electronic data processing equipment on an all risks basis. Indemnifies for: Damage to processing equipment; cost of reproduction of records; extra expense resulting from damage by covered peril. Coverage is available for desktop computers, terminals, printers, readers, computerized cash registers and word processing equipment.

LEASEHOLD INTEREST: Indemnifies the insured for loss of appreciated rental value or use value of the covered premises due to cancellation of a lease by the lessor, if such cancellation is directly due to damage to the premises caused by fire or other covered peril.

GENERAL LIABILITY INSURANCE: Everyone should have the complete protection against third party claims with high limits of coverage for Comprehensive General Liability insurance. Even the smallest business should be made liability coverage conscious. GL covers such additional hazards as contractual liability, personal injury, advertising injury, premises medical payments, host liquor law liability, real property fire legal liability, broad form property damage exposures, incidental medical malpractice, non-owned watercraft liability, worldwide exposures, protection for employees as insureds, bodily injury resulting from intentional act, and newly acquired organization exposures.

WORKERS COMPENSATION AND EMPLOYERS LIABILITY: Insures against claims for work-related injuries or diseases suffered by employees that are compensable by statute and/or are imposed by law as damages. Other States insurance is incorporated in the "plain language" policy and is activated by appropriate entry. Voluntary Workers Compensation and Employers Liability coverage may be made effective for workers not subject to a Workers Compensation law. International exposures must be addressed separately.

UMBRELLA LIABILITY INSURANCE: Provides Excess General Liability, Employers Liability and Automobile Liability limits and, if desired, Excess Aircraft and Watercraft Liability limits and also protects the business from the exclusions and gaps of primary Liability insurance. High limits and defense protection are very important here.

COMMERCIAL AUTOMOBILE LIABILITY: Insures against loss or damage claims for bodily injury or property damage arising from the operation of owned automobiles.

EMPLOYERS' NON-OWNERSHIP LIABILITY: Covers liability of the insured for use, in its interest, of autos owned by others, especially employees. Most businesses have a definite liability exposure from the use of employee owned cars in their interest. Any of the following coverages may apply, depending on the nature of the risk and whether or not autos are owned in the business name:

HIRED AUTOMOBILES: Protects the business against bodily injury and property damage claims arising from the use of automobiles hired by it, but not those registered in its name or that of an employee.

MEDICAL PAYMENTS: Reimburses passengers for their medical expenses arising out of accidents while riding in an insured car, or entering or alighting. Does not indemnify when a Workers' Compensation law applies to a situation in which an injury occurs.

FIDELITY BOND:  Affords, under a single policy, the broadest coverage against the crime hazards available on a package basis. It provides coverages that are available against employee dishonesty, faithful performance of duty, loss inside and outside the premises, money orders and counterfeit paper currency, transit, robbery, theft, forgery, embezzlement, extortion, kidnap and ransom, wrongful abstraction or willful misapplication, stop payment or dishonor liability, mortgage fraud, voice and fax fraud. Safe depositor's liability is available separately.

ELECTRONIC AND COMPUTER CRIME COVERAGE: Protects the business against loss resulting from illegal access to computer systems, including private networks, on-line cash management systems, outside data processing service bureaus and contractors, and public networks. Dovetails with the Blanket Fidelity Bond, which covers loss caused by an employee or with collusion of an employee. Non-aggregated, high limits and broad protection are important.

WELFARE AND PENSION PLAN BONDS: Protects funds and property in employee (labor-management) welfare and pension plan funds against loss by reason of acts of fraud or dishonesty on the part of administrators, officers and employees of such plans. Bonding is required to safe guard these funds under the terms of the ERISA, passed several years ago to require disclosure and reporting of financial and other information concerning operations of plans subject to the Act.

DIRECTORS AND OFFICERS LIABILITY: Insures Directors and Officers against claims, generally alleging loss arising from mismanagement. Regulatory and stringent standards imposed by courts indicates significant risk. Regulatory coverage can be added to Protect the insureds from claims against them in respect to actions brought by regulators. High limits and defense protection are important.

FIDUCIARY LIABILITY INSURANCE: Pays on behalf of the insured, legal liability arising from claims for alleged failure to prudently act. "Insured" is variously defined as a trust or employee benefit plan, any trustee, officer or employee of the trust or employee benefit plan. The employer who is sole sponsor of a plan and any other individual or organization designated as a fiduciary. Group Life and Medical Expense plans, as well as Pension and Retirement plans are within the scope of the law.

EMPLOYMENT PRACTICES LIABILITY COVERAGE: Protects an employer against discrimination, sexual harassment lawsuits and/or administrative proceedings. Coverage is available for failure to hire or promote, wrongful discipline, wrongful review and wrongful discharge. Federal law including the Americans with Disabilities Act holds employers responsible for a variety of employment issues. High limits and defense protection are important.

EQUIPMENT COST MANAGEMENT: Under the "Maintenance Saver Program", you can establish a Self-Insured Retention, essentially a large deductible, under which you'll pay for the many ordinary repairs and ongoing maintenance expenses you incur. You'll immediately see savings over the costs of "first dollar" service programs, because you'll be paying no service commissions to an agent or broker, no fees or bonuses to consultants and no associated insurance company or provider expenses. An insurance policy premium for coverage against major or catastrophic breakdowns or losses will be added to protect you over and above your Self-Insured Retention. But even combining your retention and your policy premium, you will discover an immediate savings, usually 25 percent or more compared with the combined costs of your existing service contracts.

ELECTRONIC RISK PROTECTION: Protecting yourself against claims made by others who rely on your business activity services is a crucial component of a well thought out risk management plan. The initial step is a thorough assessment of your electronic business exposures. The second step is to apply operational and technical risk management tools to mitigate or eliminate the risks uncovered. The third step is to place insurance protection for loss event exposures related to E-Business activities such as unauthorized access and theft of data, computer viruses, attacks to your systems such that you lose performance or access to them, unauthorized ecommerce transactions, and often coverage for inadvertent, unintentional, non-fraudulent or non-malicious programming and processing errors as well as the destruction or damage of electronic data caused by authorized personnel! Coverage can often be placed for qualifying insureds to cover legitimate loss of business income as well as investigation expenses, public relations coverage to help build reputation, development cost coverage for loss of software or proprietary data, interruption of service liability coverage and electronic publishing liability.