While you may be familiar with your own residential insurance policy, it’s important to understand that not all insurance policies contain the same terms. Commercial insurance policies have a few key differences to keep in mind when filing a claim.
There may be several named insured parties. On a residential policy, the named insured are usually a married couple or an individual, but on a commercial policy, any number of parties could be listed depending on the ownership structure of the business or property. It is not uncommon that disputes under a commercial insurance policy center on who and what was covered. Make sure you understand exactly who and what is covered under your commercial insurance policy.
A commercial policy will generally include several types of liability insurance. In a residential policy, the insured are generally covered against claims for premises liability, but a business requires additional coverage for its operations, products, and operations liability.
You can receive compensation for lost business income. If you run your business out of your home, your residential homeowners insurance policy doesn’t cover lost business income. However, if an accident causes your business to shut down or interrupts your work, business interruption coverage can pay for the income you lose when you are unable to operate. The insured needs to be able to show the income it was generating both before and after the incident to receive compensation under its business interruption coverage.
You may need different policies for multiple business Residential policies generally cover one property, but operating a business may involve several properties. While one policy can cover multiple properties, it will typically only do so if the properties have similar uses. If your business includes an office space and a factory as separate buildings, you may need different policies to adequately cover each.
You can tailor your coverage to address specific risks. Residential insurance is much more standardized than commercial policies because businesses have a variety of different needs. You can choose coverage options to cover additional costs like valuable papers and records reproduction, meeting local ordinance codes when rebuilding, replacement of employees’ personal property, and more.
While most residential policies are written by insurance companies admitted and fully licensed to conduct the business of insurance within the state, most commercial policies are now written by surplus lines insurers. Surplus lines insurers are not admitted in the state in which they are doing business, and are generally either loosely regulated or unregulated by the department of insurance. They are not backed by a state guarantee fund in the event they become insolvent, and often are just a fronting scheme for unauthorized offshore reinsurers who carry the real risk without any regulation or oversight. Buyers of commercial surplus lines insurance need to be very aware of what they are getting themselves into, and what the risks may be.
Commercial insurance claims are often much more complex than residential claims because the policies are often tailored to each business. Regardless of which coverage you choose for your commercial insurance, you have the right to hire an attorney to assist you with commercial insurance claims. The attorneys at Raizner Slania can examine your insurance policy to determine your available coverage and any payments you may be owed. If your commercial insurance claim has been denied, delayed, or undervalued, contact us today for a free consultation.