Valuable Papers Insurance: Certain businesses such as design firms, law offices, investment firms or accounting firms handle and produce critical documents. Some property and casualty policies will allow you to schedule or list such critical documents, other policies do not. Some policies have a blanket limit covering such documents that may not be sufficient. It may be necessary to procure a separate policy to guard against the loss of such documents.

Scripted Policies: Some things or operations are so unique that an insurer will write a policy specifically for that risk. If your operation owns or operates something unique ask your professional if it is covered or if it can be covered.

Maritime Operations: If your business operates water vessels that dock at United States harbors, you will need Maritime Operations coverage. This coverage will include a specialized form of workers compensation coverage that covers employee claims under the Jones Act and the Longshoremens Act.

Railroad Operations: Most commercial policies exclude coverage for operations taking place within a certain distance of railroad tracks or in a railroad yard. You will need to secure this coverage if your business will be operating around railroads.

Kidnap & Ransom Insurance: If your personnel travel overseas, this coverage may be necessary to aid and reimburse the business in case of a kidnapping.

These policies are unique and complicated. If your business is involved in some of the things identified here, talk to your professional and make sure you are covered.

 Casualty insurance is typically combined with property insurance and often referred to as “property and casualty” insurance. However, there is a difference in the type of coverage. This is especially true after the events on September 11, 2001 and the hurricanes in 2004-2005.

Property insurance insures the location of the business while casualty insurance insures the business.

For example, if your business is on the seventh floor of a building and a natural disaster, such as a flood, occurs that wipes out the first floor, but causes no damage to the seventh floor, then any loss would not be covered by your property insurance because there is no direct loss to the location of the business. However, if you have business continuation or business interruption insurance you may have coverage for the indirect loss to your business.

Many of these products are developing in today’s world. Insurers are making it necessary to carry additional casualty insurance to cover certain types of losses. These types of coverage include:

• Terrorism Coverage –

Acts of terrorism or war are not covered by traditional insurance policies – or, so claims the insurers. The attacks on September 11, 2001, resulted in claims exceeding $30 billion. Insurers now specifically exclude terrorism and require the purchase of a terrorism policy.

• Flood Insurance –

Floods are generally not covered by typical property insurance policies and a separate flood insurance policy is necessary to protect against that risk.

• Political Risk or Government Liability –

If you do business overseas or have substantial government contracts, then you may want to look into this type of coverage. It protects against a sudden loss due to a sudden political change in a country or withdrawal of a contract without recourse.

• Other Types –

There are other types of casualty insurance that seem to be developed in response to the latest news: Cyber-Liability, Identity Theft, Cyber-Fraud, Employee Theft, etcetera.

Some of these casualty policies may be critical for the safe operation of your business. More often though, standard casualty coverage offered with a business owners’ policy will be enough casualty coverage and these types of policies are ‘flavors of the month.’

Casualty insurance also includes certain types of bonds or other limited insurance that have been long standing products and may be very necessary to your business.

• Employee Theft and Dishonesty –

This coverage protects your business from loss or damage caused by employee theft. If your employees have access to company funds or handle cash transactions you may want to consider this coverage for the employees.

• Surety Bonds / Movie Bonding /Completion Bonding

This form of casualty coverage referred to as a bond insures someone you will contract with that you will complete the contract. If you are in construction or plan on bidding for government jobs, then you will be required to obtain a surety bond to insure your work. 

A motion picture or television production bonding company is really a specialized insurance company. Whereas the typical insurance company might insure your car or your life, these companies insure your production. But they don't protect the cast or the equipment. In fact they don't even insure you! But they do insure your investors, a bank, the distributor, a labor union, or anyone else who has a financial interest in the outcome of your production. They only insure for one thing: the completion of your film. So the bonding company should be properly called aCompletion Guarantee Company.

Casualty insurance is a different type of insurance than property insurance. We will review different forms of casualty insurance and how these can work within your business plan.

 Types of Business Insurance Policies

“Business insurance” is a broad description that can be broken down into a list of nine types of insurance policies and here I will briefly explain the coverage and expand on these as individual topics. For now, these are general descriptions so that we are talking about the same thing when I use these terms in later articles.

• Property Insurance
  Property insurance insures against loss or damage to the location of the business and its contents. It can also insure the property of others in your control when the loss occurs. Property insurance can be for a specific risk. For example, a fire insurance policy insures only against a fire loss to the location. A tornado is not a fire and, therefore, that loss would not be covered. The insured location can be owned, leased or rented.
• Casualty Insurance
  Some insurers will lump property and casualty insurance together and refer to the coverage as “property and casualty” insurance. In fact, “packaged” policies of property and casualty are often the best purchase a business owner can make. However, to have an understanding of the difference between the coverage, I will discuss this as a separate type of insurance. Casualty insurance insures against loss or damage to the business.
• Liability Insurance
  Liability insurance insures against liability legally imposed upon your business because of the negligence of the business or its employees. Put another way, it protects your business when the business is sued for negligence.
• Commercial Auto
  Your personal automobile policy does NOT cover vehicles used by your business. If your business uses vehicles or anything that is required to be titled by your state, then you need a commercial auto policy. Commercial auto coverage insures against property damage to vehicles and damage caused to others by those vehicles.
• Workers’ Compensation and State Specific Insurance for Employee Injuries (e.g., Stop-Gap)
  You will need to insure your employees against on-the-job injuries. Every state is different. But, most states have put into place some form of workers’ compensation system. Workers’ compensation is a system where the employee is not allowed by statute to sue their employer for on-the-job injuries; but, in return, the employer must participate in a system that provides nearly automatic payment to the employee in case of injury for medical bills and damages. There are many options for workers’ compensation coverage. Some states allow an employer to opt-out of the system if the employer is self insured, some run the system through private insurers while others use state agencies. Finally, some states, by virtue of case law or statute, require additional insurance above workers’ compensation such as “stop-gap” coverage or “scaffolding liability” as just two examples.
• Business Interruption Insurance
  Business interruption insurance insures against loss or damage to the cash flow and profit of a business caused by the business being unable to operate because of interruption. The easiest example is to think about a critical piece of machinery being struck by lightning. The repairs to the machine may be covered by other coverage such as property or casualty insurance. But, if you can’t make widgets for three months, then there is no replacement of that income without this coverage.
• Health Insurance
  To be competitive, most businesses need to offer their workers health insurance. This insurance offers a health coverage benefit to your employees (and you).
• Life and Disability
  Life and disability insurance protects the business against the death or disability of key employees. For example, one partner carries a life insurance policy naming the partnership as a beneficiary. If that partner dies, and the business has planned properly, the proceeds of the policy can be used by the business to buy out the share of the decedent’s partnership interest from the estate.