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SOS Business Services

“Help when you need it.”

PO Box 720800, Piñon Hills, CA 92372 • (760) 868-0901
(866) 467-8TAX [(866) 467-8829]

Integrity  •  Accuracy  •  Experience

Business Insurance Basics

Need business insurance you can count on? SOS can help.

Things to Consider About Business Insurance

This is general information on business insurance and should not be construed to be advice regarding appropriate insurance lines or coverages, nor as an endorsement of any particular product or insurance line.

We will be happy to have our business insurance specialist discuss your needs with you with no obligation.

  • Insurance Terms
     
    • Endorsements — amendments to the insurance contract, usually those that extend coverage for additional premiums.
    • Perils — insurance jargon for the bad things that can ruin your day (or business) – (fire, earthquake, etc)
  • Types of Business Insurance
     
    • Errors & Omissions (Professional E&O)
      A type of professional liability insurance. Provides legal defense for lawsuits resulting from claims, whether baseless or not, for:
      • Errors — professional negligence
      • Omissions — failure to perform professional duties
      Sorry, fraud and illegal acts are not covered.
    • Homeowner’s (If you work at home)
      Your basic homeowner’s policy generally won’t cover business structures at all.
      Business personal property is only covered up to $2,500 ($500 if it’s not located on premises – e.g. someone steals your laptop out of your car). You may want to consider additional coverage for your business assets.
    • Business owner’s
      Package policies, designed for small to mid-size businesses. Serve as a one stop policy for small businesses that have neither the need nor desire to spend a lot more money for multiple commercial lines or a commercial package.
      A quick survey (see disclaimer above – these are ballpark figures), revealed that a basic policy (about $500 per year) includes:
      • $100,000 for business personal property (computers, printers, desks, etc) – covers most perils; earthquakes and terrorism generally have to be added by endorsement
      • $1,000,000 in liability – including bodily injury (like a slip and fall); property damage, personal injury liability (libel, slander, etc) and advertising injury liability (claims arising from your advertising)
      • Business interruption
        Covers continuing costs and loss of income resulting from a peril that prevents your business from continuing operations.

        An extra expenses policy also covers additional expenses needed to continue operations (If you have to invest in additional equipment, or lease additional space to keep your business going).
      • Transportation (say your laptop is destroyed in a traffic accident)
      • Coverage for outdoor signs, employee dishonesty, burglary and robbery, money and securities can generally be added by endorsement.
      Typically there are other coverages as well. It pays to work with a knowledgeable agent to get just the coverages you need.
      The Standard deductible with a Business Owner's policy is $250.00
    • Business Auto Policy
      Generally, business use of your own car is covered under your personal auto policy, however you may need a business use endorsement. Also, check with your insurance agent/broker if you have company owned cars.
    • Employee fidelity bonds
      You may have heard of these (probably from someone talking about dramatic rises in employee fraud). Ideally, they protect you, as an employer, from employee theft, embezzlement and fraud by paying a claim for losses.
      If you are considering one of these, read the fine print. For many bonds, not only do you have to catch the employee in the act and/or get a written confession, but you have to prosecute as well before a claim will be paid.

As you review this information, we hope you will recognize why an experienced, knowledgeable agent can be invaluable. Please let us bring our expertise to your business. We will do our best to make sure you have exactly the right coverage for your business at the lowest cost.

Feel free to contact us for a no-obligation analysis of your business insurance needs.

Sources:
California Department of Insurance www.insurance.ca.gov
Benchmark Education Corporation California Fire and Casualty Insurance Manual