Never really paid too much attention to your insurance policy and you want to understand it now. I’m going to go very quickly through coverages and provide you with a form that you can download that really is going to organize your insurance world no matter where you get your insurance from. So let’s dig right into it.
What we’re going to learn is the four basic parts. The first is what’s called liability coverage. The second is property coverage. The third is workers’ compensation coverage, sometimes called work comp. And the third is commercial auto insurance. So we’re going to break those four things down for you very quickly.
I want to show you the coverage details form that I really think you should download and have in front of you while watching this video. We have two options. You can look down below the video in the show notes and download that link. I would stop this video right now and download both options.
The first one is a blank form so it has all the coverages I’m going to talk about but it doesn’t have any of the limits in it so that you can fill them in yourself. And then the next one has some example limits.
So I’ve filled it in with something that I might provide or offer to a client so you can see some common coverage limits and examples of what those different coverages might look like so you can compare them to your own policy and get a sense of kind of what it should look like. So the blank one I would download and then the example one I would download.
The blank one obviously is for you to complete and the example one is one that I’ve put. Sample coverage limits in there so you can see what your coverages might look like. The rest of this video is going to go through these line by line and just say what they are. So you can have that in front of you and understand each line so you know what’s going on there.
So let’s dig right into it. We’re starting with liability coverage. What liability coverage is is coverage for bad things that happen to other people because of you or more specifically in this video because of your business. Bad things that happen to other people because of you.
That could be coverage for medical bills or lawsuits associated with injuries to patrons at your place of business. This is the trip and falls or someone had something bad physically happen. They slipped or anything like that. Those are going to have general liability coverage is going to be what you have for those types of coverages.
So a common limit for these is a million dollars per occurrence and two million dollars per year. Oftentimes it’s separated out by how much your insurance company would pay out in any given occurrence. One bad thing that happened in this example it’s a million dollars.
And then the most your insurance company would pay out period for the whole year. So if they got to that two million dollar limit then they would not pay out no matter what other bad things happened at your place of business. So that’s a common limit. What is general liability not? Well it’s not for sickness or injuries caused by your product or finished operations.
It’s not for bad advice that you give to people and it’s not for injuries to your employees. We’ll cover where those coverages come from as we move along. But general liability is not for either of those three things. Medical expenses is the next thing. It’s a small and super accessible coverage for injuries to business patrons.
It’s very much like general liability but it’s a tinier amount usually five or ten thousand dollars. It’s very easy to access where general liability coverage sometimes can be after all the medical bills are paid out or even through a lawsuit process. Medical expenses is much more quick.
It’s much more quickly accessed. Essentially it’s there to avoid a bigger liability situation. So medical expenses is an important coverage. Products liability. This is where coverage for sickness or injury from your finished products or your completed operations comes from.
Especially if you’re a food provider or a food manufacturer or something like that. Products liability is super important to you and this is where it comes in. Employment practices liability. This is coverage for lawsuits associated with your hiring practices, with your firing practices, with your workplace behavior practices.
If something bad happened and someone decides to sue you because of any of those things then you could have employment practices liability coverage and incredibly important coverage to have on your business insurance policy. I hope I’m not moving too fast here.
There are videos for a lot of these that are in much more detail but the point of this video is just to cruise on through and get you through as quickly as possible. So that’s what I’m trying to do right now. Employee benefits liability. Not a commonly known coverage but super important. You provide benefits to your employees, oftentimes health benefits or life benefits or things of that nature.
If for some reason the benefits package didn’t come through in the situation where someone needed it, you do have liability coverage.
Because of any of those things then you could have employment practices liability coverage and incredibly important coverage to have on your business insurance policy hope i’m not moving too fast here uh there are videos for a lot of these that are in much more detail but the point of this video is just to cruise on through and get you through as quickly as possible so that’s what i’m trying to do right now employee benefits liability not a commonly known coverage but super important you provide benefits to your employees oftentimes health benefits or life benefits or things of that nature if for some reason the benefits package didn’t come through in the
situation where someone needed it you do have liability coverage for that if you have employments employee benefits liability cyber liability becoming much more important uh for businesses uh it’s a package of coverage options associated with a cyber breach of your patrons personal
information especially if you collect social security numbers uh visa card information even birthdays and things of that nature if you have a any of that kind of information it could be breached then cyber liability is incredibly important for you to have the coverage for you to have there and then professional liability coverage is coverage for lawsuits resulting from
errors omissions or bad advice provided by your business so if you’re a financial advisor an insurance agent these are coverages that you need for sure but lots of different types of businesses need this coverage because you provide advice all different kinds of advice has coverage
here and professional liability is where you find that coverage again not general liability but professional liability finally on the liability coverage hired and non-owned auto oftentimes this is just thrown in as a part of the package but it’s super important it’s coverage for auto liability
associated with your business in vehicles not owned by your business so if someone uses their own car to run an errand and is clearly doing business work but gets in an accident during that time your hired and non-owned auto policy may be what comes into play as a part of the coverage
needed in that situation so hired and non-owned auto coverage is the final liability coverage all right let’s move on to property coverage property coverage is very simply coverage for damage to the physical assets of your business this could be a lot of different physical assets
that your business owns property coverage is what covers them so let’s check it out we start with building coverage building coverage is simply coverage for damage to the building itself if you own your building or if you have a lease that’s like a triple net net lease where you’re responsible
for ensuring your building even if you don’t own it then the building coverage on your policy is incredibly important the next one is business personal property sometimes referred to as bpp coverage for damage to the equipment furniture and belongings owned by the business so this
is kind of like everything else the stuff you own inside of your structure you have office furniture you may have equipment specific to the business that you run all those kinds of things are covered by business personal property coverage that’s an important coverage on your
policy and it can be set up based on a payout of either replacement cost or acv won’t dig deep into these details but replacement cost is definitely what you want and not acv another property coverage is data compromise this is connected with cyber liability oftentimes the package
cyber liability and data compromise are together but this case is if your hardware or your software is damaged or lost in a cyber attack so you have physical assets that are ruined or need to be replaced need to be re-downloaded need to be re-put together and data compromise coverage can
help specialized equipment coverage also called inland marine coverage is coverage set up for incredibly valuable or specialized or hard to replace business equipment particularly if you have vintage equipment or things that are just very very specialized for your business you want
to make sure that they’re on your policy specifically and the coverage is set up properly insurance agent can help you with that money and securities coverage for the loss of physical assets like money or securities business income coverage super important coverage for lost income
because of a covered business shutdown so something bad happened your business can’t run for that month or whatever it is you’ve lost the income associated with people coming in your front door and doing business with you your insurance policy can actually cover some of that lost income if you have business income coverage employee dishonesty is coverage for assets stolen by an
employee that happens more than we want to think about but it certainly happens and forgery is an alteration very much similar to the previous one is coverage for assets improperly manipulated by an employee finally on property coverage we have equipment breakdown this is a great
coverage to have coverage for temporary and permanent replacement of equipment that fails unexpectedly there’s lots of examples where a heating or air conditioning unit stops working and a business needs to keep running and a lot of these policies will actually cover a temporary replacement so that you can get your business back running and make sure that you don’t
lose income associated with your business being closed and then can help with the replacement of the actual item too now it’s important to note if your heating and air conditioning just got old this is not a coverage that would would take care of that that’s more like a maintenance issue something you need to update on your own so that’s equipment breakdown coverage all right
let’s dig into work compensation workers compensation sometimes called workers comp or work comp simply means coverage for injuries to your own employees coverage for injuries to your employees now there’s a coverage limit that’s generally set up for three separate numbers so
100 500 100 one you know is an example so let’s break down what those numbers means a lot a lot of times that’s confusing and the first number is the policy limit that most the insurance company will pay out for physical injuries to your employees while they’re working pretty simple
right the second is the policy limit for sickness caused by the workplace and that’s for the whole claim so the second one is for the whole claim the policy limit for sickness caused by the workplace the third is a per person limit for sickness caused by the workplace so you’re going to have
a limit per person and then a total limit for the entire claim caused by sickness sickness those are two different numbers so let’s look at the example of one hundred thousand five hundred thousand one hundred thousand see what that means the first number 100 is what the insurance company would pay per physical injury they would pay no more than a hundred thousand dollars per physical injury
obviously if it was less than a hundred that’s what we would pay we would pay up to a hundred thousand they would pay no more than five hundred thousand total per sickness caused by the workplace or one hundred thousand per person for sickness caused by the workplace so that would be a one
hundred five hundred one hundred situation and that would be the coverage limits that you would have there the premium is paid in kind of a weird way with workers compensation and employee and businesses get confused by this all the time what you pay for this coverage is based on two things the type of work your employees do which is like your employee category and your actual annual
payroll how much you pay out in payroll the thing is that you don’t know at the beginning of the term the policy term exactly what you’re going to pay out in payroll so you make an estimate so we make an estimate with you of what you think you’re going to pay in payroll and what jobs you think
people are going to do at the beginning of the term and we set a premium based on that but at the end the company’s going to come back and they’re going to audit your payroll and they’re going to see what the actual numbers were and that’s where people get really confused and sometimes really frustrated if you overpaid if you paid for more payroll or different jobs than
actually happened then the company will actually send you a refund check but if you underpaid if you underestimated your payroll or if you said someone was clerical when they were actually up on roofs doing you know risky things then the insurance company is actually going to send you a
bill and that’s after the fact so you could get a bill and it’s for the previous year’s workers compensation because of the audit so that can be very confusing i have another video out there that describes that even more but just wanted to lay it out a little bit here all right last part is commercial auto pretty straightforward this is coverage for vehicles owned by your business
vehicles are covered you know they’re your fleet of vehicles it could be one vehicle it could be 100 vehicles it could be a car it could be trucks it could be all different kinds of vehicle but obviously we’re going to cover just the fleet of vehicles that you your business actually owns there’s two parts of this the first is auto liability this is damage and injuries to
others by your vehicle so you got an accident the accident was your fault another car was smashed other people were injured that’s where your commercial auto liability coverage is going to come into and then physical damage coverage this is simply for damage done to your own vehicle usually has deductibles associated with it for comprehensive and collision two different kinds
of physical damage that can happen to your vehicles commercial auto is very state-based so you really want to make sure you understand how auto insurance works in your state again we have other videos on on the details of no fault insurance versus at fault insurance and things of that nature but commercial auto is something that you should understand your insurance agent
should be explaining to you based on the state laws that you experience okay that was it so here’s that example of our form our blank form i just went through really really quickly all the different coverages that are on that form hopefully you’ll download it you’ll use it to compare to your
current insurance policy or talk to your insurance agent about it if you have questions about any of those specific coverages you can go back into this video and find my very quick explanation of that particular thing and then we’ve got the other one that has coverage examples as well again
you can download those in the notes below this video okay what did we learn well we talked about four different types of business coverage we talked about liability coverage there’s lots of different liability coverages in your business policy we talked about property coverage coverage for your physical assets workers compensation coverage coverage for injuries to your employees
and finally commercial auto auto coverage coverage for your fleet of vehicles and damage that they could do to other people as well as damage that could happen to them themselves would you like more from our channel we would love to provide it for you i already mentioned it but our workers comp audit you can click right here and get access to that video we describe in detail how paying for your workers comp policy works it’s a video i would definitely recommend i recommend to all my clients so that you understand how work comp insurance works and you don’t get burned by it we’ve got a great podcast called scratch entrepreneur where i interview different business owners and talk to them about their businesses talk to them about their success es.
their failures and how they took their business from scratch to the place it is right now and finally if you want to check more out about shine insurance we’d love to have you over at our website at shineinsurance.com so that’s it and as always the last steps in this video if you haven’t some.
so already please click that subscribe button we’ll get more great videos out to you like this video if you thought it helped you definitely give us a little shout out we’d like to know and finally if you think this video could help other people please share it with them good information is only great if it’s shared with others all right this is Jeremy.
from shine insurance and until the next time have a wonderful day.
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