In this article, we will talk about how to get the best commercial insurance in Arizona so that you can have the right coverage for your business. We will talk about the various kinds of commercial insurance that are available and the areas of your business that they cover.
We will also give you an understanding about how to get the best commercial policy for the best price and the difference that the right agent can make in your search for the very best insurance protection.
But, first, why do you need commercial insurance in the first place? Is this just another unnecessary expense for businesses or will it have a positive impact on your company and its future?
Imagine for a moment that you have owned a company that butchers and delivers meat to customers.
There is a huge monsoon storm that knocks out the power to your facility and water floods the back-up generators.
Without refrigeration all your meat spoils and you have a significant loss in income as well as the expense of restoration and clean-up.
Or perhaps you are real estate agent. On the way to do a showing with a client, you get in a car accident and your client is injured.
Or think about what would happen if you have a commercial space that sells handmade wedding dresses. A disgruntled bride throws a rock through the glass door and looters take off with dozens of wedding dresses, depleting your inventory and leaving your current customers with nothing to wear on their wedding days. They sue you for breach of contract.
If you stop and think about it there are a million things that could go wrong in your business. There are accidents and thefts, there are natural catastrophes and unforeseen expenses, and there are lots of opportunities to be held liable or financially responsible. This is why it is so critical for everyone who owns a business, regardless of the nature of that business, be properly protected with the appropriate commercial insurance policy which will protect you in the case of everyday mishaps and unbelievable circumstances.
Having the right commercial insurance policies are critical to the profitability and the future of any business. Acquiring the right protection is the best thing you can do to ensure the continued success and growth of your company.
WHAT ARE THE TYPES OF COMMERCIAL
Every type of commercial insurance has its place. Depending on the nature of your business and the risks that your company is exposed to, you may need one or two of them, or you may need all of them.
We will start by giving you an overview of all the different types of commercial insurance that are available to provide protection for you and your business and discuss why they might be useful to you.
Obviously, there are a variety of different types of commercial insurance because there is a multitude of different risks that are unique to each individual business. We will talk about nine of them in this article, but you should be aware that sometimes you will find them differentiated by different names, but their basic purposes and coverages are the same.
The main types of commercial insurance are:
Most common property and general liability claims for small business
Water & Freezing
Wind & Hail
Slip and Fall
1. General Liability
General commercial liability insurance gives coverage to any business or company in the case of bodily injury, personal injury, and property damage. If your any damage occurs that is caused by the operation of your business or by one of your products, this is covered under a general liability policy.
Additionally, if someone is injured on your company premises, this is also covered by a general liability policy.
A general liability claim is only triggered by either property damage (PD) or bodily injury (BI).
2. Professional Liability
Professional liability differs from general liability in that it covers your business from any damages that are caused by mistakes made in the performance of a job.
For example, if someone is injured or property is damaged because of the way you did your work or because of neglect of your job, this falls under the coverage of professional liability.
Keep in mind that if your job performance created the injury or damage it will not be covered under your general liability policy.
Essentially, professional liability coverage protects against damage from errors or omission in performing your professional services or doing your trade.
To make this more clear, consider this example:
If a carpenter is working on your kitchen cabinets and he knocks over a Ming vase sitting on the kitchen table this would be covered by his general liability policy. However, if he hangs the cabinets, but they fall off the wall during the night and shatter the Ming vase and scratch up your wood floors, this would be covered under a professional liability policy.
In the first scenario, an accident occurred because he was there working in your home. In the second, the accident occurred because he did not do his job properly.
3. Commercial Property
Commercial property insurance covers the business property as well as all the personal business contents on the property from loss.
These losses may occur because of theft, fire, storms, accidents, or other physical destruction.
These policies can often be created to cover the loss of income that may result from having to do repairs on the property as well as increases business expenses that may result from any of the property damage.
These policies also cover outside fences, signage and landscaping of the property.
When you acquire a commercial property insurance policy, it is very important to understand that while the policy will cover your personal business contents, it only does so while those contents are on the actual property. If you move the contents, like tools or a laptop or photography equipment or whatever you use to do your work, off the property more than 100 feet, it will no longer be covered by your standard commercial property insurance policy.
In order to cover your business contents off your property, you will need to acquire an inland marine policy which covers the transport of any of your business contents from any damage, theft, or loss. Be sure to think about the nature of your business and the way you perform your work to make sure that you have inland marine coverage if you move your business contents regularly from your business premises.
4. Commercial Auto
Commercial auto insurance provides coverage for any vehicles used in the performance of a job or any business-related automobile transportation or travel. These policies cover bodily injury (BI) as well as property damage (PD) that is inflicted on others involved in a commercial vehicle accident.
5. Commercial Umbrella
For most commercial property, liability and auto insurance policies there are limits to how much coverage they will provide. Often this coverage is not adequate to cover business in the event of a serious accident.
Commercial umbrella policies increase the limits of liability for a company or business and offer more protection from risk and lawsuits.
6. Workers Compensation Insurance
Sometimes called “workers’ comp,” this insurance provides coverage for the medical expenses and sometimes a portion of lost wages, for employees that are hurt while at work.
Coverage also includes rehabilitation provisions and a death benefit when necessary.
It’s important to understand that almost every state has laws requiring businesses to carry workers’ comp insurance, the requirements and exemptions vary from state to state and you will need to talk to an Arizona commercial insurance agent to help you get exactly what you need to protect your employees and meet the state requirements.
7. Employment Practices Liability
Employment practice liability is a type of commercial insurance that protects a business owner from any wrongful acts that occur during the employment process or against claims of misconduct or unfair employment practice.
This type of policy covers your business from liability any time workers claim their rights have been violated by your company, either in the hiring process or in the course of employment.
The most common kinds of employment practice claims include: sexual harassment, discrimination based on sex or race, and wrongful termination or retaliation.
Additionally, these policies also cover claims of wrongful discipline, failure to promote, defamation, invasion of privacy, deprivation of career opportunities, negligent evaluation, emotional distress, and mismanagement of employee benefit plans.
8. Cyber Liability
Cyber liability is a relatively new form of commercial insurance that has really only been necessary over the last decade. These policies are used to cover both liability and property losses that may occur because a business is involved in online and electronic activities and are susceptible to cyber theft or fraud.
If your company collects and stores the sensitive personal and financial data of its customers, a cyber liability policy will protect you in cases of theft or hacking.
Cyber liability gives coverage to cover the costs and damages of illegal data breaches, including customer notification costs, defense costs, ongoing credit monitoring, government fines or penalties, additional industry fines, or other losses following any identity theft.
9. Business Interruption Insurance
This type of insurance, also sometimes known as business income insurance, provides coverage for any income that is lost when a company suffers a loss or damage that inhibits their ability to continue providing service or run their business.
The loss of income loss can be because of damage itself or for the loss of income during the rebuilding or restoration process that follows.
These insurance policies cover any potential profits that the company was not able to earn because the business was closed.
If your business had to close for a few days or for an extended period of time, how would you cover your personal and business expenses, pay your employees, or pay your vendors? Business income insurance covers all of these concerns.
Occasionally business interruption insurance is included within other policies and it is not always necessary to have a separate interruption insurance policy In these cases.
GETTING THE RIGHT COMMERCIAL INSURANCE MEANS GETTING THE RIGHT COMMERCIAL AGENT
Your business is unique. It doesn’t work like anybody else’s company and it doesn’t have the same risks as another business, even in the same industry.
When you choose a commercial insurance policy, you need to make sure that your policy is written and negotiated by someone who knows your business and exactly what you need to be protected.
For example, I provide insurance for a guy named Miguel, that has a thriving landscaping business. His customers love him and he does great work all over the Phoenix valley. But before, he came to me for his commercial insurance needs, he had a one-size-fits-all policy and it was written by someone who didn’t take the time to understand his business or properly explain the risks that were unique to him.
One day, when Miguel’s trailer was parked away from his business address, someone stole the trailer which had thousands of dollars worth of equipment on it—from mowers to leaf blowers, trimmers and clippers, rakes, shovels, hoes. You name it, it was on that trailer.
Everything Miguel needed in order to run his landscaping business was gone.
To make things even worse, Miguel was not properly insured. His insurance agent had written the policy to cover Miguel’s business, but had not included inland marine coverage to cover his tolls when he was away from his business address. Miguel was away from his business address every single day. His equipment was hardly ever at his business address. It was all over the valley from Goodyear to Mesa and everywhere in between.
Basically, the insurance policy that Miguel was paying for was utterly useless at protecting him. Miguel’s agent hadn’t taken the time to understand the nature of his business or explain the kind of protection he needed. It was a complete loss and the worst part was that it could have been easily avoided.
When you are choosing a commercial insurance policy, keep in mind that you need to choose the right one. Without the right coverage, it’s exactly like having no coverage at all.
Work with a commercial insurance agent that cares about you and your business, that understand the kind of work you do and the risks that your company has so that they can write a policy that protects you from the losses that your particular business might face.
CAPTIVE VS. INDEPENDENT AGENTS
In addition to finding an agent that knows your business and cares about getting you the exact coverage you need, you need to think about how many options your agent will have when it comes to commercial policies and whose best interest they have in mind.
There is a big difference between captive and independent insurance agents. We will take the time to explain each.
Captive insurance agents work for one insurance company only.
This means that they can only offer you policies from one insurance company and their options are limited.
While they are experts about the company they represent and the products and services they provide, they cannot give you alternative choices or compare rates for you.
Additionally, because these agents work for one company, they are loyal to that particular company’s insurance products. Their goal is to sell you a policy from their company, even if they think there may be a cheaper policy available elsewhere with another company.
Alternatively, Independent agents represent many different insurance companies that don’t use captive agents to sell their products. At our company, Insurance Professionals of Arizona, for example, we sell insurance products from over 40 different companies. Because independent agents are not tied to or obligated to use the products of one insurance company, they can work with a variety of companies and comparison shop to get the best deal for their clients.
This gives their clients incredible flexibility in designing their insurance policies. They have dozens and dozens of coverage options and premium rates to choose from. If you choose to use an independent agent, you give yourself a myriad of options to customize to your specific insurance needs.
Independent brokers are motivated, careful and personable with their clients. They care about their client’s businesses. They don’t work for a large corporation, meaning that they are 100% responsible for generating their own income. Independent agents will work to get your business because they are dependent on your commission.
You can expect your independent agent to:
Explain all your commercial insurance policy options in easy-to-understand terms
Negotiate with several insurance companies in order to get you the best value in terms of coverage and premium rates
Develop a personal relationship with you and understand your business and how you do your work, so that you can always be adequately covered.
Always keep your best interests in mind as they work hard to earn your business
When you select an independent agent to help you find the commercial insurance policies you need, you exponentially increase your ability to get the right coverage at a reasonable rate.
THE IPA DIFFERENCE
At Insurance Professionals of Arizona, we understand how important your business is to you, to your family, to your employees, and to your customers.
We are an independent insurance agency that was built and has grown on the idea that we could provide a better insurance product and a better insurance experience for our customers.
Every day we use our expertise, our knowledge, and our understanding of dozens of different insurance carriers and their products to help our clients get exactly what they want.
We are not a national insurance company—we are a local company that understands the concerns of running a small business. We know firsthand the expenses and risks you face each day in your business and we care about helping you succeed. We want to alleviate any possible gaps in coverage while removing exorbitant insurance premiums so that you can concentrate your time, energy and resources on building the best business you can.
The best businesses need the best insurance coverage and at IPA that’s exactly what we help you find.
Contact us today and we will assess your current coverage to make sure you have exactly what you need to protect your business. We will run comparisons to make sure that you aren’t paying more than you need to for your coverage. We’re here to understand and handle your commercial insurance so that you can concentrate on what you do best—build your business!
We’re here to help! Call us today.
Now It’s Your Turn
I hope this guide showed you how to get the Best Commercial Insurance for your business and property.
And now I’d like to turn it over to you:
Did you learn something new from this guide?
Or maybe you have a question.
Either way, leave a comment below right now.