Answers to frequently asked questions from our Business insurance customers

This ongoing series of informational brochures is intended to share with you, our valued customer, some of the frequently asked questions (FAQs) we receive about Business Insurance.

It was compiled from various surveys and responseswe have received from customers just like you.

Please take a few moments and look through it. we think you’ll find the information interesting and hope you come across something particularly useful. Subjects are easy to find and cover several common questions. However, if you need additional information, don’t hesitate to call your agent.

As your business grows and insurance needs change,you may want to refer back to these FAQs again.

Keep the information handy by filing it with your policy and be sure to look for information on other subjects in future mailings.

Commercial Umbrella

Q: I already have Business insurance. Why would I need Umbrella coverage?

A: No one expects to encounter a loss that exceeds the limits of his or her policy, but unfortunately in today’s business environment, liability lawsuits – which often result in large jury awards – do happen. As the name implies, Commercial Umbrellas goes “over the top” of your existing business liability coverage, offering $1 million or more of added coverage for your business.

Q: Can a large loss affect my company’searnings?

A: The truth is that it’s not just your current assets which are at risk, but your potential future earnings as well. Look down the road and picture where your business will be five or 10 years from now. A large loss now could easily destroy any hopes of a bright future.
Insolvency courts’ records are filled with examples of companies that thought they weren’t at risk!

Q: Is this additional coverage expensive?

A: Umbrella limits, often many times those provided by your current policies, are available for a fraction of the cost of the primary policies. When most business owners examine the facts, they find that a Commercial Umbrella offers them a low-cost way to assure their assets remain theirs – even in the face of a multi-milliondollar loss.

Surety Bonds

Q: Does We provide Surety Bonds?

A: Absolutely! Your agent is able to write both Commercial Surety and Contract Bonds. You can take comfort in knowing that, should you need a bond, there to meet your need is the expertise and commitment to service of your agent.

Q: What types of Commercial Surety Bonds are available?

A: Over 150 classesand types of bonds are available. Here are some examples.

Bonds for the legal field include:
• Administrator/Executor
• Trustee in Liquidation
•Indemnity to Sheriff
• Guardian/Conservator
• Trustee in Reorganization
•Appeal, Stay of Execution

Bonds for license, permit and miscellaneous needs include:

• Agriculture
• Brokers, Agents, Adjusters
• Motor Vehicle
• ProfessionalLicenses
• Regulatory/Compliance
• Excise,Sales,Use, and ConsumerTax
• Lost Instrument
• Notary Public
• Public Official

Q: What types of Contract Bonds are available?

A: Contract bonds for the construction field include:
• Bid
• Labor and Material Payment
• Maintenance
• Performance
• Subcontract Performance

Pollution Liability

Q: Should I be concerned about pollution liability?

A: Under the doctrine of “cradle to grave responsibility,”you maybe held liableeven when you havefollowedthe rules.Simplyput, anyonedealingwith the care,custody,or control of hazardousmaterialsmay be responsiblefor that material- forever!It is the waythe environmentalprotection lawsare set up.

Q: What are the financial implications and how might my business be affected?

A: The financial obligations stemming from pollution liability claims vary widely, depending on the nature of the event. Needless to say, they are usually expensive!

A recent settlement on the West coast brought to a close a tragic story of eight families whose liveswere permanently altered by contaminated soil and ground water from a factory adjacent to their children’s elementary school. The COuttawarded settlement exceeded $2 million dollars and state investigators were forced to shut down the factory operation due to the extent of the contamination.

Although this example may demonstrate a worst-case outcome, many similar cases of environmental claims litigation and settlements are placing a financial hardship on businesses like yours across the country.

Q: What can I do?

A: One of the best ways to protect yourself and your business is with a Pollution Liability Policy. This policy offers the protection your company needs to help mitigate costly litigation and damages toclay’senvironmental protection laws may impose.

Q: What does eachpolicy cover?

A: Pollution Policies for Storage Tank Systems covers:*

• Leaks, spills or releases from scheduled storage tanks
• The EPA financial responsibility for storage tanks
• The cost of remediation to contaminated property
• Bodily injury and property damage
• Defense costs within the policy limits

Pollution Policies for Dealer and Repair may includes storage tank systems and offers the following additional features:*

• Coverage for an event occurring on-site from other than a storage tank
• Liability for transportation of materials off-site
• Coverage for an event at a non-owned, scheduled disposal site

* Certain restrictions may apply

Employment Practices Liability

Q: Employment practices lawsuits – why should I worry?

A: You’ve read the headlines. You’ve heard about big settlements awarded in wrongful termination and employee harassment cases.They only apply to big business, right? Wrong! You may just as easily find yourself faced with a similar lawsuit from a current or former employee.

Q: What would the financial implication be and will it affect my business?

A: Legal expenses to defend an allegation of improper employment practices (even if you prove the charges groundless) average $100,000 and related jury awards are rising annually. For many small businesses, the unanticipated expense can have multiple effects ranging from an impact on cash flow to having to close your doors for good.

Q: What can I do?

A: One of the best ways to protect yourself and your business is to acquire an Employment Practices Liability Insurance (EPLI) policy. This policy offers the protection your company needs to help mitigate costly litigation and damages today’s employment environment can produce.

Q: What will the policy cover?

A: EPLI policies are designed to cover your businessin the event of claims brought by employees,board members,leasedworkersand temporaryworkersas a resultof any of the followingacts,whether realor alleged:*

• Wrongful-refusal to hire; failure to promote; demotion or reassignment.
• Wrongful termination (including breach of implied contract)
• Employment related misrepresentation
• Harassment, coercion, discrimination
• Slander, defamation, libel or invasion of pnvacy

Q: How can I reduce my risk of a claim?

A: EPLI policies often provide you with complimentary risk management services, which include instant access to human resources professionals who are able to offer guidance and information. These services are designed to help you and your employees avoid the situations that may lead to claims of this nature.

* Certain restrictions may apply

Flood Insurance

Q: Do I need flood insurance?

A: Here are a few facts that you may want to consider before deciding:

• Flood damage- unlike wind damage- is not covered by business or homeowners insurance policies.
• Approximately 30 percent of all flood claims occur in low to moderate risk areas.
• In high-risk areas, there is a one-in-four chance of being flooded in a 30-year period, and you are four times more likely to be damaged by flood than fire.
• Federal Disaster Loans, if available, must be repaid with interest – flood insurance does not.
• Flood insurance is affordable.
• Flood damage is not.

Q: Who writes this coverage?

A: The National Flood Insurance Program (NFIP) provides the coverage. It is sold through private insurers as part of an agreement with the federal government and can be purchased even if you have experienced prior flooding.

Q: What coverage is available?

A: Businesses can purchase coveragewith limits up to $500,000 for buildings and $500,000 for contents; condominium associations can obtain building coverage up to $250,000 (times the total number of units); unit owners can buy a separate contents policy for up to $100,000; homeowners can purchase a maximum of $250,000 for buildings and $100,000 for contents; and coverage is also available to renters.

Since the U.S. government sets annual flood insurance premiums, your rate is the same from any insurer – so why not go with a name that will provide you with the quality service you enjoy today!

Q: What are the program requirements?

A: Anyone can buy flood insurance if his or her property is located in a community that participates in the National Flood Insurance Program. Condominiums, business enterprises, homes and apartments are all eligible. Even renters may purchase flood insurance for their possessions.