Orange County FAQs
Business General Liability Coverage:
Q: What is the purpose of General Liability Coverage?
A: General Liability Coverage, in its simplest form, is designed to protect an organization or a business in case of an adverse financial consequence of certain unpredictable events.
Q: Why does my business need general liability insurance coverage?
A: When operating any business venture, one of the first and most important things you can do to protect your Orange County business is to acquire Commercial General Liability Coverage. In fact, when renting a space almost all landlords require their tenants to carry it. Having General Liability Insurance protects your business from potential injury and property damage claims that could seriously affect the survival of your business. Each claim could cost you money by not only paying out on legitimate ones but also by defending your company against the fraudulent ones. General liability coverage protects you from these lawsuits up to the limits of the policy and provides you the kind of basic peace of mind needed to be an effective business owner.
Q: What is umbrella insurance coverage?
A: Commercial Umbrella Insurance coverage is a policy that adds an additional amount of liability insurance coverage which is designed to give you, as an insured, an additional level of protection over your general liability, auto liability, and employers’ liability coverage. If a claim is filed against you, and if the limits of your primary policies are exhausted, the umbrella policy takes over to cover the extra cost up to the limits of the umbrella policy. An example would be, say your general liability policy provides a limit of $1,000,000 in coverage, but your claim settles for $1,750,000, your umbrella policy could cover the additional $750,000.
Q: Why do I need umbrella coverage?
A: In the current business environment we work in, having a lawsuit judgment or a claim exceed your underlying primary policy liability limits is a real possibility. If this were to happen, you could be at risk of losing your personal assets. Having an umbrella policy will give you additional coverage above the limits of your primary policies and with it a little more peace of mind. One thing to keep in mind is that most umbrella policies cannot be used to supplement a professional insurance liability policy.
Q: What is professional liability coverage?
A: Professional liability insurance, which is also known as Errors & Omissions coverage, is a specific type of insurance that protects your business against loss from a claim of alleged negligent acts, errors or omissions in the performance of your professional services. Just as surgeons, dentists, and all types of doctors have medical malpractice insurance to defend themselves against lawsuits, many other types of professionals, including but not limited to, architects, engineers, real estate agents, and technology professionals also need protection in case they make an error or omission on the job. Professional Liability Insurance coverage could pay the insured’s defense costs and damages in the event of a claim.
Q: Why do I even need professional liability coverage?
A: Even when professionals try to do their best for their clients, sometimes mistakes do happen; and in a litigious society, lawsuits have become an inevitable part of life. Professional liability coverage can cover judgment costs and defense costs. Please remember that even a fraudulent claim can cost your business money.
Q: Explain just what is inland marine coverage?
A: Having Inland Marine coverage can protect your company against damage to property such as valuable papers, accounts receivable, computers including laptops, fine arts, tools, contractors equipment, or other specialized equipment.
Q: Why do I need inland marine coverage?
A: In most every case, a business depends on some kind of specialized property to conduct their daily business, and having inland marine coverage can protect you or your company against loss of or damage to these essential pieces of your business.
Pollution Liability Insurance
Q: What is pollution liability coverage?
A: Pollution Liability coverage can protect professionals from liability if they cause an environmental incident on the job, such as bursting a sewage pipe or spilling pollutants.
Q: Why would I need pollution liability coverage?
A: Unfortunately, accidents will happen. Think about all the environmental exposures there can be on the job. Another area when accidents happen quite frequently is spills on a highway or freeway from a truck overturning and spilling gallons of whatever they were carrying. This type of claim could sink a company if they had no coverage. Pollution coverage can provide a layer of security in case something does happen.
Directors & Officers Liability
Q: What is directors and officers liability coverage?
A: Directors and officers liability insurance provides financial protection for the directors and officers of your company if they are sued in conjunction with the performance of their duties as they relate to the company.
Q: Why do I need Directors and Officers Liability coverage?
A: Almost all business organizations have a general liability insurance policy that protects its directors and officers against negligent acts that could result in bodily injury or property damage. Please note, however, your general liability insurance does not protect against alleged wrongful acts or omissions, including breach of duty, which do not result in bodily injury. By having a Directors and Officers liability policy, it protects your executives from potential lawsuits resulting from key decisions or management practices-lawsuits that could target their personal assets. When assembling a board of directors for your company, this is one policy you will need which is extremely important in order to attract competent directors and officers. More than likely, before anyone agrees to be part of your company’s board of directors, they will likely make this coverage a requirement, since a director can be held personally responsible for the acts of the company and will want to be protected rather than putting their personal assets at risk. In addition, having employees leaves management open to employment practices lawsuits which are often covered under D&O policies.
Employment Practices Liability/EPLI
Q: What is employment practices liability coverage?
A: An Employment Practices Liability Insurance policy protects an employer against an employee’s claims of discrimination, which may include such things as age, sex, race, disability, wrongful termination, and sexual harassment, just to name some of the things that could result in a lawsuit.
Q: Why do I need employment practices liability coverage?
A: In the past few years, claims arising from Employment practices have been on the rise with the average payout approaching $100,000 per claim. In today’s economy, terminations and layoffs have become increasingly common, therefore, resulting in a potential for costly lawsuits. Employment practices suits now constitute the single largest area of claim activity under D&O policies which include employment practices liability. Employment practices liability coverage is a practical way to reduce your potential exposures to these lawsuits even when the claims are without merit.
Builder’s Risk Insurance
Q: What is builder’s risk insurance?
A: This is a type of specialized property policy that is designed to provide coverage for buildings while under construction mainly used in new custom homes and commercial buildings. Coverage is generally written on an inland marine form. It can provide coverage for the contractor’s interest in materials at the job site before they are installed, materials in transit intended for the job, and the value of the property being constructed until it is completed. This type of policy may be written to cover the whole structure for new construction or rehab projects. It can also be written to cover specific projects such as a new room addition or a remodeled room in your house, like a bathroom or kitchen.
The named insured of a Builder’s Risk policy is usually the contractor or the developer of the property. However, it may be the building owner or homeowner if they are responsible for insuring the property while under construction. A mortgagee or lien holder may be added to the policy if required.
The most the insurer will pay for loss or damage in any one occurrence is the limit of insurance stated in the policy declarations. Limits are stated for each location. Claims are settled on an Actual Cash Value basis.
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