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Insuring Contractors and Commercial Operations

Deanie Canales

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Business insurance is an indispensable element when establishing or owning your own company. This kind of insurance provides protection from unanticipated losses. Calamities such as fires, floods, hurricanes and tornadoes are some of the most devastating factors that can end many businesses regardless of its size. There are also other factors such as lawsuits and employee injuries that can impact the financial health of a company. Business owners often fall into a trap of leveraging the business capital assets when needing to pay compensation for these types of tragedies if not properly insured. A well crafted BOP or business owner’s policy will protect the company assets in the event of a calamity, small or large.

By getting a quality commercial insurance policy, a business owner shares the risks of protecting his company’s finances with the insurer and perhaps a 3rd party lender. In an agreement, the owner agrees to pay a premium in exchange for the insurer’s protection from losses from the following events:

Commercial Property Damage

Most business liability insurance policies provides coverage for Commercial Property Damages brought about by:

  1. Natural catastrophic losses
  2. Theft
  3. Vandalism

Aside from the structure, many small business liability insurance policies also include furniture, computers, files, inventory and several other components integral to a business’s operations.

General Liability

Business Liability Insurance provides protection against lawsuits resulting from product defects, employee injuries, company management negligence lawsuits as well as property damages to exterior structures. Should the company be found liable in these claims, the General Liability policy will cover the legal expenses, medical payments and other costs brought about by the lawsuits. General contractor insurance would be best for construction operations that hire independent contractors and should safeguard that business from financial losses resulting from accidents at construction sites.

Worker’s Compensation

With a few state exceptions, Worker’s Compensation Insurance is required for all businesses operating in the US. A workmans comp coverage provides for the worker’s lost income and medical expenses from work-related injuries or illness.

Professional Liability

Professional Liability Insurance policies are appropriate for businesses that render services in the health care field, business consulting, architectural design and other professional fields of expertise. These businesses can be susceptible to professional liability claims should their clients file lawsuits against the business for physical injuries, property damages or even misrepresentation. Professional Liability insurance will cover legal, court, and investigation costs as well as other necessary costs. Medical malpractice insurance is an additional coverage for medical practitioners.

Surety Bonds

A Surety bond is nothing more than a contract between three business parties where the principle party is made whole for contracted services should the contractor fail to meet his or her obligations. An insurance underwriter or reinsurance entity is often the one offering the Surety. Government agencies established this policy to regulate companies while protecting the interests of the consumers. The bond’s terms typically vary based upon specific industry regulations.

Business owners should realize that surety bonds, though an insurance product, are different than typical general contractor insurance in Philadelphia and has nothing to do with commercial auto insurance for Bucks Co businesses that have business vehicles. However, surety bonds in Philadelphia are required to bid on most municipal and state funded construction projects. Not just any insurance broker in Bucks County can issue surety bonds. It is a specialized application process limited to those brokers that have a partnership with specialized reinsurers and underwriters.

Having an understanding of the importance of commercial ins in Phila and its surrounding counties is key to any business owner interested in protecting his business assets for the long term.


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