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Commercial Insurance
Wednesday, March 5th, 2014

What extra coverage should I be aware of?

Special policies can cover the risks unique to your business.

Business Interruption

This form of insurance provides you with the funds required to protect your business’ financial position if your operations are interrupted by an insured loss such as a fire.  Features and costs will vary considerably depending on whether you insure for named perils, a specific time frame, specific costs or just a portion of the income you lose.  This form of insurance is highly customizable and can include coverage for extra business expenses, rental income lost, gross earnings lost, payroll and professional fees.

Consequential Loss

A consequential loss is not caused directly by damage to property, but is a consequence of other damage.  For example, a cold storage facility might experience significant inventory losses if an on-site transformer station failure cuts out electricity supply or a fire damages the refrigerators.  A greenhouse operation or winery might require constant temperature and humidity to be maintained.  Consequential loss coverage would insurance the resultant damage caused to stock by an insured peril that changes these factors.
Equipment Breakdown

Many named perils and broad commercial property insurance policies will exclude coverage of breakdown or damage to highly sensitive or specialized equipment including high-pressure boilers, control systems and computers, diagnostic equipment and more.  Special machinery policies can be obtained to cover equipment for sudden and accidental breakdown, which is advisable if loss of use is a significant risk for your business.

Errors and Omissions and Director’s and Officer’s Liability

It is common practice to protect company directors and senior managers from personal liability for actions that are the responsibility of the company they direct.  While insurance does not remove their fiduciary duty; it does provide some financial protection from legal liability for a claim made against them for an alleged or wrongful act.  A wrongful act is any error, misstatement, misleading statement, act omission, breach of duty or neglect allegedly committed or attempted.  Errors and omissions insurance is usually used in professional services firms such as law, accounting and consulting to protect professional staff from the impact of errors and omissions in their work.

Specialized Coverages

There are as many forms of specialized coverage as there are risks to your business. A broker can help you access the probability of experiencing a loss and determine whether or not you should purchase specialized coverage. Talk to your broker to see if there are risks unique to your business that requires extra protection.  For example:

Crime – designed to protect against loss of money or securities, may include theft overnight or on the way to the bank.  This also includes employee dishonesty.

Electronic Data Processing Systems – protects your computer and its data.

Sewer Back-up – covers loss or damage caused by the backing up of sewers, sumps, septic tanks or drains.

By-law Coverage – covers additional expenditures resulting from by-laws regulating construction when rebuilding a building after a loss.

These are just a few of the special coverage’s available for special situations. Contact us today to learn more special coverage’s that are specific to your business.


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