These are some of the insurance terms that all business owners should know.
If you are a business owner, then you know how important it is to have your company protected by the right small business insurance. However, with all the policy options out there, it can be difficult to secure the right coverages to fit your needs. When you are looking for the right commercial insurance, it helps to understand the industry jargon that insurance companies tend to throw around. Here are some of the insurance terms that will help you understand what you’re getting as you look for the right coverage.
- General Liability Insurance
This type of insurance offers coverage for bodily injuries, property damage, and other losses to third-parties. For instance, if a customer were to slip and fall on your business’s property, then this insurance would cover the cost of the customer’s medical treatment. Should the injured party attempt to sue, then this insurance would cover your legal fees and, if necessary, your settlement costs.
- Professional Liability Insurance
Also known and Errors and Omissions (E&O) Insurance, this type of insurance provides coverage in the event that your company makes a misstep when providing professional services. For instance, this type of insurance covers you in the event that you are accused of negligence, copyright/trademark infringement, libel, slander, and so on.
If a customer or third-party feels that your business has caused them to experience a loss, then they will make a claim for damages. A claim is the first step in the negotiation process between the injured party and your business, or the insurance company if you are covered for the claim. If your insurer determines that the claim is legitimate, then they will negotiate a settlement with the injured party on your behalf based on the details in your policy.
A deductible is the amount of money you agree to pay towards a claim before your insurance steps in and covers the rest. For example, say that you have a claim of $5,000 and a deductible of $1,000. You would have to pay the $1,000 before your insurance coverage would kick in and pay the remaining $4,000. Deductibles and premiums have an inverse relationship, meaning that the higher your deductible, the lower your premiums will be. However, it’s important not to set your deductible too high as this would risk not having access to your coverage when you need it the most.
- Certificate of Insurance
Sometimes called a “cert,” a certificate of insurance is proof that you have insurance for your business. Your certification will show what type of insurance you have, your policy limits and deductibles, the name of the insured, the name of the insurer, and the policy’s effective dates.
These are some of the small business insurance terms that every business owner should know. Do you have further questions or concerns regarding your business’s insurance coverage? Then don’t hesitate to contact the professionals at PMC Insurance Group. Contact us today to learn more about getting competitive coverage for your small business clients.