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Business Insurance Terms & Glossary - GetInsuranceQuotes.ca

May 20, 2013

Insurance terms are sometimes hard to understand. However, it is very important to have sound knowledge of what a policy's coverage entails when buying insurance to protect a business. Additionally, getting familiar with the terms used in the business insurance industry helps people make shopping for policies easier so they can avoid paying more than they should.

Understanding business insurance terms also helps people design their own unique insurance package that provides the protection to meet individual needs. Insurance can mean valuable protection against risk if the policy holder knows how to use it to its fullest potential. There are several important terms a policy holder must understand before purchasing business insurance.


Liability Insurance Terms

· Public Liability

This type of liability insurance covers injuries that the company causes to any members of the public in business activities. This insurance also covers damages to personal or communal property. Employers should also remember that public liability insurance does not cover any kind of injury to employees who are doing their jobs.

· Professional Liability

This form of liability insurance defends professional practitioners such as architects, physicians and lawyers against errors and negligence that are committed while performing their duties. Malpractice and errors and omissions are the most common types of professional liability coverage. Potential clients include accountants, appraisers and brokers or individuals whose professional activities may bring about damages due to unfair dealing, inaccurate devices or misinterpretation.

· Product Liability

Product Liability Insurance is a coverage that protects manufacturers from liabilities that result from defects or malfunctions in the products that they provide. The rate of premiums paid with this insurance depends on the volume of sales, product types and the role of the policy holder in the supply and production process.

· Employer's Liability

This insurance provides protection against injuries and illness that employees might obtain while performing their jobs. Legislation often requires every business owner who employs individuals other than themselves to purchase employer's liability insurance. However, there are no restrictions concerning the rates of premiums. In general, this protects employees from liabilities that may arise due to injury, disease or fatality.

· Premises Liability

Property owners purchase this insurance to protect them in the event that an individual is injured on real estate that they own or occupy. The insurance will also pay for most damages and cover legal fees.

· Personal Liability

These insurance policies protect policyholders when their personal actions cause unintentional property damage and bodily injury. The insurance provider will pay part or all of the damages if a claimed is filed. The amount paid depends on the terms stated in the policy.

· Personal and Advertising Injury

Personal injury is liability insurance that covers an injury that is not physical. This includes slander, libel or any form of defamation that a company or an individual might be held accountable for. Advertising injury provides for injury or damage done to an individual or a company's reputation due to statements and advertising claims.

· General Liability

This insurance policy is designed to cover a wide range of potential liability risks. It also provides for court costs to cover damages that are claimed against an individual or company if they are proven negligent in some way.

· Employment Practices Liability

This insurance provides coverage for businesses that are sued for actions taken in the daily management of employees and in the hiring and termination process. It also includes things such as wrongful termination, sexual harassment, discrimination and much more. The relief sought from this insurance coverage may include compensatory or monetary damages, reinstatement and apologies.


Property Insurance Terms

· Property Insurance

Property insurance protects the assets that a policyholder owns. This includes homes, building and equipment. Broad form and the specific or single peril form policies are available. Broad form provides coverage against loss from a range of identified cause stated in the policy. Specific or single peril only covers loss from a single identified cause.

· Contents Insurance

This insurance policy provides protection for business equipment from various perils such as theft or fire. It can include anything from desks, office supplies and stock. It also includes manufacturing and office equipment. However, certain types of devices may require special coverage.


Commercial Auto Insurance Terms

· Commercial Auto

Commercial auto insurance helps provide protection for businesses against damage or loss to company vehicles. It also covers damage that company vehicles cause. Vehicles that fall under this policy are those that employees use while on company business.

· Non Owned and Owned Auto Coverage

Non owned auto coverage is an insurance policy that is designed for situations where employees drive company-owned vehicles. Owned auto coverage protects an individual from liability when a vehicle that they own and are driving is involved in an accident.

· Hired Auto Coverage

Hired auto coverage provides protection from liability when an individual drives a vehicle that a business does not own. This policy protects businesses from liability claims from individuals that have been injured due to an accident that involves a vehicle the company has rented.


Other Commercial Insurance Terms

· Business Interruption Insurance

This insurance policy protects businesses from losses when they are forced to temporarily shut down due to natural disasters or other insured peril. It also provides necessary continuing expenses and lost net profits. Additionally, it also includes extra expense coverage. This feature is useful when a business owner decides to carry on with their business at a different location due to insured damage incurred at their original place of business.

· Business Income Coverage

Business income coverage provides protection against contingencies that might interfere with the everyday running of a business. This enables businesses to pay for costs that they incur if they are not operating at full capacity. Additionally, extra costs that may be incurred as a result of the loss are also needed to be covered.