Frequently Asked Questions

General liability insurance provides insurance protection for a company’s assets, financial obligations, legal defense, and any settlements or judgments awarded to an injured party. It may also include claims for copyright infringement, false or misleading advertising, or libel and slander. If a patron is injured in some way in the course of doing business with your company, your general liability insurance can provide coverage.

 

Depending on the nature of your business and any insurance which you are legally obligated to carry, the following types of business insurance should be considered essential:

 

• General liability insurance: Coverage against accidents, injuries and negligence claims
• Product liability insurance: Coverage against product defects
• Professional liability insurance: Covers professionals against malpractice, negligence or errors
• Commercial property insurance: Covers against damage to your business property, such as from fire or a severe storm
• Business interruption insurance: Protects your business if you are no longer able to conduct your business because of a loss
• Home-based business insurance: Covers against general or professional liability.

Because commercial insurance needs to be tailored to each business based on risks, it is critical to work with your agent who will get to know your company and ensure that your coverage adequately protects your business investment.

Business insurance includes a broad range of policy options designed to protect a business from financial loss. Every commercial operation has its own unique set of risks, which means a commercial insurance policy must be tailored to the business. Many factors, from the size of your company, to the number of workers you employ, the materials they handle and whether you have business vehicles, will determine the specific coverage you need to mitigate risk and protect your company’s financials.

 

Many business owners find that they must turn to a number of different insurance companies to get all of the coverage needed to cover their risks. If you work with an independent agent in the Trusted Choice^® network, you can get all of your business insurance policies from one office.

When choosing your coverage limits, consider three things:

 

1. The risks you may face. Consider risks as a homeowner or renter, the risk of causing an accident during your work commute, and any potentially dangerous activities you participate in that could put those around you at risk.
2. The value of your assets. These include properties, possessions, stocks, bonds, savings and retirement funds. The more assets you have to protect, the higher the umbrella policy limit you should consider.
3. The potential loss of future income. Because liability lawsuits can result in loss of both current assets and future income, even those with few assets to protect may want to consider the long-term ramifications of a serious claim.

When you review your future income, consider your earning potential. You not have many assets now, but if you’re on track for a high paying career, you could be involved in a lawsuit that can target money you haven’t earned yet.

Speak with your agent to determine your specific risk factors and learn more about how to protect your current and future assets.

Your car, house, investments and retirement accounts, as well as your normal checking and savings accounts and even future income, are all considered assets. It is important to know that if you are sued for a lot of money and do not have enough liability insurance or an umbrella policy to cover those costs, all of your assets are exposed. People typically choose to buy an umbrella policy because they want to prevent the possibility of financial ruin due to one misstep or unforeseen accident. Umbrella insurance can provide the protection to prevent such an outcome.

 

An umbrella policy provides additional coverage or “excess liability” above the limits of your basic policies. It can protect you from bodily injury liability claims and property damage liability claims. Umbrella policies also provide a broader form of coverage and can help cover legal fees, false arrest, libel, and slander.

 

Umbrella insurance is a form of liability insurance that will supplement your basic liability policies, such as your auto, home or renters insurance. An umbrella liability policy covers a much higher limit and goes above and beyond claims directly relating to your home and auto.

 

The main purpose of your umbrella policy is to protect your assets from an unforeseen event, such as a tragic accident in which you are held responsible for damages or bodily injuries. If another party files a lawsuit against you, your umbrella coverage can pay for the covered damages you’re legally responsible for up to the policy limit.

Condo association coverage will only cover the exterior of the condominium. For the interior and for your possessions, condo insurance will cover potential losses, such as theft of or damage from fire.

 

You also need to protect yourself from liability claims and lawsuits if someone is injured in your condo or you are responsible for damage to someone else’s property. Note that liability often covers your responsibility for personal injury and bodily injury claims. Because liability claims can lead to lawsuits, it is important to evaluate the amount of coverage you need to protect yourself financially.

For complete protection, many people purchase umbrella liability policies. An umbrella policy provides liability protection that will exceed what your condo and auto policies will cover.

Condo insurance policies typically cover what the condo association’s master policy doesn’t cover. A condo association master policy can be of two types:

 

• An “all-in” condo master policy: Also known as a “single-unit” master policy, this type of policy covers the fixtures in your condo such as the appliances, wiring, plumbing, and carpets, but does not cover personal property that you own.
• A “bare walls-in” condo master policy: This policy does not cover anything contained within your walls. It may or may not cover your condo’s plumbing and electrical systems. Be sure to carefully review the association’s master policy to determine what your condo insurance policy needs to cover.

You will need to buy more of your own condominium insurance if your association has a “bare walls-in” condo master policy than if it has “all-in” condo master policy.

Your condo insurance policy will cover you for loss or damage to your unit, personal possessions, and provide coverage for personal liability and medical payments. Additionally, it will often cover loss of use in the event that your condominium becomes badly damaged by a fire or storm and you need to live elsewhere during repairs.  Insurance for a particular condo is known as an HO-6 policy. HO-6 policies typically provide you with coverage for a range of causes of loss. You may have to purchase additional coverage for specific items such as artwork, jewelry and other items of value.

Condo insurance provides coverage for the inside of your condominium; the external areas fall under the jurisdiction of your condo association and must be covered under the association’s insurance policy. Depending upon the specifics of your condominium association’s master policy, your condo insurance may include coverage for:

 

• The interior walls, floors, cabinets, fixtures
• Your appliances
• Your personal property and valuables

In addition to covering your belongings in the event of a loss, your condo insurance also protects you against liability claims if you are responsible for another person’s injury or property damage, or you have legal fees to pay due to a lawsuit.

You can get the insurance you need for your condo and your valuable possessions by contacting your agent.  Your agent will help you compare rates from multiple insurance companies and choose the most suitable coverage for your needs.

Renters insurance will help to pay your costs if you suffer a loss, such as a burglary. The amount of compensation you will receive depends on the type of loss and the amount of coverage you have in place. For example, you can buy “actual cash value” (depreciated) coverage for your personal property, or you can buy replacement cost coverage for your personal possessions.

 

Certain items such as jewelry, collectibles or other valuable items may have a value limit or require additional insurance coverage to provide full coverage for loss, theft or damage. You will also be responsible for a deductible, which is an out-of-pocket expense.

Renters insurance is important because your possessions are not protected by the landlord’s insurance policy. Landlord insurance covers damage to the building but does not protect your possessions.

 

Another good reason to have renters insurance is for protection against liability claims. The liability portion of your renters insurance will provide compensation if a visitor to your rented home is injured. If that person files a lawsuit against you, your renters liability insurance will also help to cover the costs of your legal defense.

Renters insurance can also cover temporary accommodations in the event that you have to live elsewhere while your rental is being repaired due to fire, smoke or water damage.

Renters insurance provides coverage for your lost, damaged, or stolen personal possessions. It also provides coverage for injuries to another person that might occur in your rented home or apartment. For example, if someone is hurt in your apartment, and the injury is deemed to be your fault, that person can file a liability claim with your insurance company to cover the costs associated with the injury.

 

If the injured person chooses to file a law suit against you, your renters liability insurance would pay for your legal defense and any judgment, up to the limits set on your policy. If you do not have renters insurance, these costs would be your responsibility to pay out of pocket.

To learn more about renters insurance and the amount of coverage that makes sense for you, talk to your agent.

Homeowners insurance is important for a variety of reasons:

 

• If you’re insured, any significant repairs or even rebuilding after a disaster can potentially be covered by your insurance policy, up to your set limits.
• If you owe money on your mortgage and your home is completely destroyed, you will still be required to pay your home loan, unless you have adequate homeowners insurance. Homeowners insurance can help pay for the rebuilding cost. Insuring your house at full replacement cost value, you should have the means to fully rebuild, if needed.
• Liability/Medical coverage is arguably the most important aspect of homeowners insurance. If something happens to a visitor on your property, your liability coverage can cover that person’s medical costs, as well as your legal fees if you are sued. Lawsuits are expensive and hiring a lawyer can cost thousands of dollars. If you’re found responsible, you could be ordered to pay large sums of money in a personal injury suit, a cost that can be off-set by your liability coverage.

When you buy home insurance, you’re buying a safety net for your home. If your home is damaged or destroyed, it can cost thousands of dollars to repair or rebuild.

 

Without home insurance, that money has to come out of your pocket. If you’re insured, you can file a claim to pay for the damage and help rebuild your home. Your homeowners insurance will also cover theft of your personal belongings. Not only does it cover your belongings within your home, it covers them if you take them with you in your car or while you travel.

In the event you suffer a loss, call your insurance agent or insurance company to begin the claims process. An adjuster will work with you to assess the damage and determine your compensation.

The benefits you receive will depend upon several factors, including:

1. The limits set on your policy, both for your structural property and your belongings.
2. The deductible amount you pay before your coverage kicks in.
3. Whether you have chosen coverage for the actual cash value (depreciated) or replacement value of your home and belongings.

Homeowners insurance provides coverage for a variety of risks that homeowners may face that otherwise can be financially challenging to cover out of pocket. These include:

 

• Property damage: This includes damage and destruction to your residence and/or detached structures. You will receive compensation, up to the limits of your policy, if your house or storage shed is damaged due to a covered hazard. Standard covered circumstances include things like hurricanes and vandalism, however, other hazards such as earthquakes and floods are excluded. Be sure to check your homeowners policy for exclusions.

• Personal property loss: Includes damage or theft of personal property, up to your set policy limits for covered circumstances, which typically excludes flooding, earthquakes, and personal negligence. If your personal property is very valuable (such as collectibles or antiques) you’ll likely need additional “riders” or special endorsements on your policy. Be sure to talk your agent about your personal belongings and valuables, as standard limits may not be adequate to cover a major loss.

• Personal liability: If you, another family member, or even your pet causes an accident, injury or property damage, your homeowners insurance can protect you. Whether someone requires medical care or repair of property, you will typically have coverage up to your liability limits. There are exclusions, such as aggressive acts against a neighbor. It is important to fully understand your liability coverage. Be sure to talk with your agent about how to choose adequate policy limits that protect your finances in the event of a lawsuit.

• Added living costs: If your house is uninhabitable, your homeowners insurance can pay for alternative living arrangements while your home is repaired or rebuilt. Depending upon your homeowners insurance company and the specifics of your policy, this may be included or may be an optional coverage. You will typically have daily and total limits for this coverage.

Homeowners insurance provides coverage for your private home that will compensate you in the event of a loss. If your home is partially or totally destroyed by a cause that is covered by your policy, homeowners insurance will help you replace your belongings, repair your home, or even rebuild.

 

Homeowners insurance also provides liability coverage which protects the homeowner in the event that someone is injured on your property or you are responsible for injury or property damage through negligence.

The amount of compensation you will receive in a claim, or that the claimant will receive from your insurance company when filing a liability claim against you, depends on the limits set for your policy. Your insurance agent can help you to determine the amount of coverage that makes the most sense for your home and your risks.

Commercial auto insurance is needed for any vehicle that your company uses for business purposes, any vehicle that has a commercial license plate or tag, and any vehicle that is registered as a commercial auto.

 

You must also get commercial auto coverage if your employees will be driving or using vehicles in the course of doing business, whether making deliveries, driving people to the airport, or running errands on behalf of the business.

If you use your vehicle for any of the following functions, you may also be required to get commercial coverage:

• Using the vehicle to carry equipment
• Transporting flammable or hazardous material
• Transporting housekeeping equipment for business use
• Using, carrying or transporting cranes, or a winch or plow
• Hiring your vehicle out to tow other vehicles
• Delivering any goods such as pizza or any form of wholesale or retail products
• Delivering newspapers
• Trucking and freight transportation
• Transporting people as a chauffeur, limousine service or taxi service

Some situations and certain occupations may be covered under standard auto policies; however, you should always ask your insurance agent if your vehicle use warrants a commercial policy.

Commercial auto insurance provides insurance coverage for any vehicle that you use for business purposes and for your commercial drivers. Business owners may choose commercial vehicle coverage for a single vehicle or a fleet of vehicles. A commercial auto policy can include several different types of optional coverage, allowing you to adjust the policy coverage to your particular business circumstances and the use of your vehicles.

 

In the event of an incident, such as damage to one of your commercial vehicles from weather, an accident or other incident, you can file a claim and receive compensation that will help to cover the cost of repairs. If you or one of your drivers is at fault in an accident that injures another person or damages their property, that person can file a claim with your insurance company. In this case, your commercial vehicle liability insurance will cover the costs of the claim, up to the limit of your policy.

*Many business owners choose to buy a commercial umbrella policy to cover the costs of large liability claims that exceed the limits of the vehicle liability policy. This strategy can provide much higher limits, in $1 million dollar increments, to cover the costs of liability claims and lawsuits and protect the business financially.

Commercial auto insurance covers a variety of situations. Options and terms vary from one insurance company to another, so be sure you fully understand what is included in the policy. Your insurance agent will work with you to create a customized policy that matches your business needs, complete with all available discounts.

 

Several types of coverage may be included in your commercial auto policy; others are options that you can purchase separately. You will also need to choose the coverage amounts (“limits”) and deductibles.

Typical coverage available includes:

• Property damage liability
• Liability for bodily injury to others
• Optional bodily injury coverage for injuries that occur outside of the state in which you reside
• Personal injury to you, your employed drivers or passengers including medical expenses and lost wages
• Collision coverage for costs associated with an accident, regardless of who is at fault
• Comprehensive coverage for damage other than collision
• Medical payments coverage for the cost of hospitalization, treatment and funeral expenses
• Uninsured and underinsured motorist coverage
• Non-owned auto coverage for when you or your employees drive a rented or borrowed vehicle
• Loading and unloading liability
• Substitution transportation when your commercial vehicle is being repaired and you use a loaner from the repair shop
• Towing and labor costs

Commercial auto insurance provides protection for any vehicle designated for business use against both property damage and liability. Whether you drive a vehicle that is for dedicated business use or drive a personal vehicle for business, it is important to have commercial auto insurance, as your vehicle will not be covered under a personal auto policy.

 

No. Almost every state requires you to have auto liability insurance. All states also have financial responsibility laws. This means that even in a state that does not require liability insurance, you need to have sufficient assets to pay claims if you cause an accident. If you don’t have enough assets, you must purchase at least the state minimum amount of insurance. However, insurance exists to protect your assets. Trying to see how little you can get by with can be very shortsighted and dangerous.

 

If you’ve financed your car, your lender may require comprehensive and collision insurance as part of the loan agreement.

Your auto policy may include several coverages. Each is priced separately.

 

Liability
If you are deemed at fault in a car accident, liability coverage will pay for repairs, medical costs for injuries suffered by people in the other vehicle, plus other expenses related to the accident, such as legal fees. There are two parts to liability coverage:  Bodily Injury liability and property damage liability.

It is important to have enough liability insurance, because if you are involved in a serious accident, you may be sued for a large sum of money.  Consider buying more than the state-required minimum to protect assets such as your home and savings.

Medical Payments or Personal Injury Protection (PIP)
This coverage pays for the treatment of injuries to the driver and passengers of the policyholder’s car regardless of who is at fault.  At its broadest, PIP can cover medical payments, lost wages and the cost of replacing services normally performed by someone injured in an auto accident. It may also cover funeral costs.

Collision
This coverage pays for damage to your car resulting from a collision with another car or object after you pay a deductible (up-front amount). Collision coverage is generally sold with a deductible. The higher your deductible, the lower your premium.

Comprehensive
Comprehensive coverage, which is also known as “other than collision” pays for losses to your vehicle if it suffers damage from something other than an accident, such as theft, fire, falling objects, missiles, explosion, earthquake, windstorm, hail, flood, vandalism, riot, or contact with animals such as birds or deer.  Comprehensive insurance will also cover a cracked or shattered windshield.  Like collision, comprehensive has a deductible attached to it.

States do not require that you purchase collision or comprehensive coverage, but if you have a car loan, your lender may insist you carry it until your loan is paid off.

Uninsured and Underinsured Motorist Coverage
This coverage pays for injuries and property damage you suffer in an accident when the driver at fault either is uninsured or does not have enough insurance to cover your injuries. It will also cover you in the event of a hit-and-run when the driver flees the scene and you cannot file a claim against the other driver’s insurance company.

There are several categories of auto insurance, covering different aspects of a driver’s risk.  Auto insurance provides property, liability and medical coverage:

 

• Property coverage pays for damage to or theft of your vehicle.
• Liability coverage pays on your behalf for your legal responsibility for bodily injury or property damage others.
• Medical coverage pays for injuries that you, a family member or anyone else riding in vehicle may suffer in an auto accident, regardless of who is at fault. It also pays for injuries you or your family members incur while riding in other vehicles.

Auto insurance is a contract between you and the insurance company that protects you against financial loss if you have an accident. You agree to pay the premium and the insurance company agrees to pay your losses as defined in your policy.  The amount you receive in compensation is based on several factors, including your deductible and the limit you choose for your policy.