Q. How do I go about obtaining business insurance?
A. The first step in obtaining proper business insurance is tofind and contact a reliable insurance agent or broker. Businesscontacts can often refer you to someone that they have had goodexperience with. When looking through the yellow pages, look forspecialization in commercial insurance, and membership in one ofthe professional agents or brokers associations. When dealingwith the agent initially, they should do their own analysis orsurvey of your exposures, and then ask to review any presentcoverages. To do otherwise could perpetuate any errors, gaps oroverlaps that may exist in your present program.

Q. What kind of insurance do I need?
A. There are six broad areas of exposure:

1. Property
2. Time Element
3. Crime
4. Automobile
5. Liability
6. Workers' Compensation

Not every business will have exposures in every area, which iswhy an analysis must be done. The State requires Workers'Compensation insurance if there are any employees. Variousgovernmental agencies may require certain types of insurance. Forexample, the Contractors State License Board requires bonds forcontractors, and the Public Utilities Commission requiresCommercial Automobile insurance. Most other insurance is abusiness decision on your part. However, contracts you may enterinto, such as leases, loans, etc., may contain, insurancerequirements you have to comply with, and of which you should beaware.

Q. Can any exposures be reduced or eliminated?
A. You can order an inspection by a Loss Control Engineer touncover hazardous conditions. Recommendations from this reportcan benefit you by helping to reduce premiums and making yourbusiness more attractive to insurers.

Q. What are some of the specific exposures and how arethey covered?
A. Following is a table of common exposures and appropriatecoverages:

Q. In Commercial Insurance, are there policies thatprovide or combine the various kinds of coverages like aHomeowners policy does with personal insurance?
A. Yes there are various "package" policies available.Programs such as the Business Owners Policy (BOP), Special MultiPeril (SMP) and insurance company designed packages areconstantly being marketed. Many insurers design packages to meetspecialized needs. Such as Auto Garages, Auto Dealers, Jewelers,Furriers, Barbers and Beauty Salons, and Apartment Buildings.Competent Commercial Agents and Brokers are prepared to offerthese programs.

Q. Can I obtain Earthquake insurance for a business?
A. The insurance companies are not required to offer earthquakeinsurance on commercial property. The availability is thereforedetermined by the market place and individual companyunderwriting decisions. Here again, the agent can do thesearching for you.

Q. How much does business insurance cost?
A. Your cost will be unique to your exposure; that is, it will besimilar risks insured by the same company, but since this is acompetitive market, different companies will have differentpremiums. You should know the basis for the premiums. Propertyinsurance premiums are based on a rate per $100 coverage. Factorsthat go into making the rate are construction of building,occupancy and use, public protection, neighboring exposures andinternal protection, such as sprinklers, etc.

The premium basis for liability insurance depends on the typeof business. Stores and manufacturing are based on gross sales.Contracting and service businesses are based on payroll.Apartments are based on the number of units, hotels, on grosssales, and office space and property owned and leased to othersare based on square footage area.

Anything based on sales or payroll is auditable and can resultin additional or return premium. Companies have minimum anddeposit premium requirements, which can and do vary, and shouldbe considered when shopping.

Q. How can I find out about insurance companies thatare presented to me?
A.First, ask the agent for background on the company. Then call the Department of Insurance for your state to find out status in your state, how long in the state etc. You may then want to go to the library and obtain detailed financial information and ratings by reviewing rating service reports published by A.M. Best, Standard & Poors, Moodys or other rating services.

Q. After I agree to purchase insurance, complete theapplications and pay money, how do I know I have insurance?
A. You should be given a "binder" signed by the agent,showing you as the insured, effective date of coverage, theinsurance company, location and description of property insured,amounts of coverage, limits of liability and other pertinentinformation. A binder may be valid for up to 90 days pendingissuance of the policy.

Q. Can an insurance company cancel my insurance?
A. A company has a 60 day underwriting period, during which theyreview the application and other information submitted, possiblyhave an inspection done, and verify the rating and premiumcalculation. The company may cancel your insurance within that 60day period. They must give you at least 10 days notice ofcancellation.

After 60 days, the reasons a policy may be cancelled are verylimited. The reason and a 30 day notice must be given. When thereason is nonpayment of premium or fraud, 10 days notice isrequired.

Q. When I receive my policy(s), how can I be sure theycontain what I agreed to?
A. Ask your agent to deliver the policy(s) in person, review themwith you and answer any questions you might have.

Q. How would I know if the insurance company isnonrenewing my insurance?
A. The insurance company must give at least 60 days, but not morethan 120 days notice of nonrenewal, and the reasons.