Commercial Insurance Primer

So…you took your inheritance from Aunt Flo and built a new start-up company with several employees.  Congratulating yourself on your smarts, you bought commercial general liability insurance for your small business.  But, as you sat one night working late in your new office, you started to wonder…”what exactly does commercial liability cover? and what else does my small business need?”

While you were correct, general liability insurance is a key component of your insurance portfolio, there are several other kinds of insurance your business needs.  Following is a basic list of commercial insurance categories with links to the relevant application forms provided by Acord.  Acord is a nonprofit insurance industry organization that supplies standard forms, which help to increase efficiency and encourage compliance.  Using PDFfiller to fill out the relevant Acord form is quick and easy, and will be one less thing for you to worry about.

Commercial liability insurance – Acord 126 shields you from the expense of out-of-court settlements, litigation and judgments awarded by courts. Commercial liability policies protect you from bodily injury or property damages resulting from accidents on your premises or from your products, your operations or advertising for your business.  Liability insurance can also cover things you may not have thought about, such as advertising injury in the event your company’s marketing violates someone’s copyright.

Workers Compensation is the insurance you need to protect your employees from injury on the job.  It provides wage replacement and medical benefits to employees injured in the course of employment (in exchange for relinquishment of the employee’s right to sue for negligence), reimbursement or payment of medical expenses, and benefits payable to the dependents of workers killed during employment. To apply for worker’s compensation, fill out Acord 130 – Workers Compensation Application and in the event of an accident, Acord 4 Workers Compensation – First Report of Injury or Illness.

Professional liability – Acord 187 ensures against mishaps that may occur as you offer your opinion, solution, service or recommendation in the course of business.  Often used interchangeably with Errors and Omissions insurance – Acord 180, it is a form of liability insurance that helps protect professional advice- and service-providing companies from bearing the cost of defending against a negligence claim made by a client. The coverage focuses on alleged failure to perform, financial loss caused by, and error or omission in the service or product sold by the policyholder. These are not covered by more general liability insurance policies which address more direct forms of harm.  The type of professional liability policy you apply for will sometimes depend on your profession.  To find out if there is a more specific form which applies to you, check Acord’s form index here.

Commercial Auto Insurance – Acord 137  Business liability coverage does not protect you against auto accidents – you need to purchase a separate auto policy to protect automobiles used by your business.  Many states will have state specific forms which is the same form title followed by the state abbreviation, for example, Acord 137 FL – Florida commercial auto insurance.

Property Insurance – Acord 140, provides protection against most risks to property, such as fire, theft and some weather damage. This includes specialized forms of insurance such as flood insurance, earthquake insurance, home insurance, or boiler insurance.

Business owner’s policy (BOP) – Acord 160, is a special type of commercial insurance designed for small and medium-sized businesses. By bundling general liability insurance and property insurance into a single policy, BOPs typically offer a reduced premium, which makes them a more cost-effective option than separately purchased policies.

Directors and Officer’s Liability – Acord 807, is what it sounds like: insurance payable to the directors and officers of a company as reimbursement for losses in the event of a legal action brought for alleged wrongful acts in managerial capacity. Such coverage can extend to defense costs arising out of criminal and regulatory investigations/trials as well.

So now you have a basic commercial insurance primer, which can be supplemented depending on the specific needs of your business. Don’t stay up nights wondering if you are adequately covered.  Get started filling out Acord forms with PDFfiller and get some peace of mind for yourself!