Business Insurance FAQ

These are brief responses to complex questions. Please contact an agent for more information.

Bonds

Q : “What does my financial condition have to do with obtaining a bond?”

: Bonds are similar to a line of credit. When you ask for a bond whether it is for $1000 or $100,000 you will be required to provide similar information to what a bank would require for a loan of the same size.

Liability

: “What is commercial general liability and who needs it?”

: CGL provides coverage for third-party bodily injury or property damage which arises from any type of business venture. It is an important coverage for any business venture, even home businesses as your homeowners liability has exclusionary language with regard to all business exposures.

Q:”Why does the insurance company require financial statements and business plans for new ventures?”

: Insurance underwriters need historical information, such as prior insurance and prior claims history, in order to decide if they will provide coverage for any business venture. On a new venture we need to show the underwriter that the business has a good chance of surviving. Financial information and business plans show that this new venture is going to start on a strong foundation.

: “Why do you need to know my gross sales or payroll in order to quote general liability coverages?”

: In order to calculate liability premiums, the insurance companies need a basis to establish how much exposure they have to pay a potential loss.

: “How can we protect our non-profit directors and officers from a lawsuit individually and as a group?”

: Directors and Officers Liability provides coverage for the directors and officers individually or as a board, for claims arising out of fiduciary responsibilities and decisions made by the board.

These are brief responses to complex questions. Please contact an agent for more information.

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