What Are Time Element
Insurance Endorsements?

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What Are Time Element Insurance Endorsements?

What Are Time Element Insurance Endorsements?

What Are Time Element Insurance Endorsements?. A time element insurance endorsement can either add, remove or exclude certain coverages. It's a form that becomes part of your insurance policy, altering your policy coverage.

For example, any changes made to the basic policy the commercial insurance carrier files with the state regulators is done by using endorsements. Common changes might include: Changing the business address, adding more coverage, excluding coverage for specific exposures. Time Element Endorsements allow you to make these changes - without having to buy another policy or take the chance of having risks go uninsured.

So what are time element insurance endorsements? Read on to discover the many types of endorsements available for time element insurance policies.

What are time element insurance endorsements? Endorsements modify the basic Commercial Property Policy to either add business income and/or extra expense, delete, or exclude certain types of coverage.

BUSINESS AUTO ENDORSEMENTS NUMBERING


So what are time element insurance endorsements?. It is arranged by form number and title and includes a brief explanation of the use of each form. This section does not include any state specific endorsements.

The ten-digit numbering sequence of ISO forms and endorsements has a very specific meaning:
  • The first two entries are alphabetical characters that indicate the line of insurance involved. For example, "CP" denotes "Commercial Property."
  • The next two digits designate the specific insurance category. Additional detail and information on these categories are in the next section below.
  • The next two digits are the form or endorsement number within the insurance category.
  • The last four digits are the edition date of the form or endorsement expressed in month and year format. These digits are not used in this analysis.

Form Endorsement
CP DSDeclarations and Schedules
CP 00Coverage Forms and Declarations
CP 01Amendatory Endorsements
CP 04Additional Coverage Endorsements
CP 10Causes of Loss Endorsements
CP 12General Endorsements
CP 15Time Element Endorsements
CP 60Leasehold Interest Factor Tables


What Are CP DS - Declarations and Schedules?

The CP DS - Declarations and Schedules are as follows:

CP DS 00-Commercial Property Coverage Part Declarations Page

CP DS 00-Commercial Property Coverage Part Declarations is an advisory form that ISO developed in 2000. It has not been updated since then. Most insurance companies modify it to meet their specific needs. However, many items remain as ISO placed them because the coverage form refers to them.

The Declarations provides information that relates directly to coverages and claims payments that are unique to them. However, it is designed for single location accounts. A multi-location risk would require a CP DS 01-Commercial Property Coverage Part Supplemental Declarations be attached for each additional location.

CP DS 01-Commercial Property Coverage Part Supplemental Declarations

CP DS 00 has space to enter only one premises. When there are more than one, an advisory supplemental declarations must be added to designate the premises and the coverages, mortgageholders, and endorsements that are specific to that scheduled premises.

CP DS 02-Commercial Property Policy Renewal Endorsement

This advisory endorsement is used to renew the policy as is except for the changes noted on the endorsement. Any forms and endorsements that are different from the ones on the expiring policy must be attached.

CP DS 04-Reported-Acquired-Incidental Locations Schedule

This schedule is required whenever CP 13 20-Additional Locations - Special Coinsurance Provisions is attached to the policy.

CP DS 05-Legal Liability Coverage Schedule

When Legal Liability Coverage is provided this advisory schedule is recommended in addition to the CP DS 00.

CP DS 06-Earthquake-Volcanic Eruption Coverage Schedule (Sub-Limit Form)

CP DS 07-Leasehold Interest Coverage Schedule

Unique information must be displayed when leasehold coverage is selected. This advisory schedule provides that necessary information.

CP DS 65-Flood Coverage Schedule

What Are CP 00 - Coverage Forms and Declarations?

The CP 00 - Coverage Forms and Declarations are as follows:

CP 00 30-Business Income (And Extra Expense) Coverage Form

The Insurance Services Office (ISO) time element coverage forms are similar to one another because all cover indirect losses.

CP 00 32-Business Income (Without Extra Expense) Coverage Form

CP 00 50-Extra Expense Coverage Form

CP 00 60-Leasehold Interest Coverage Form

CP 00 90-Commercial Property Conditions

CP 00 90-Commercial Property Conditions contain nine conditions that apply to the Commercial Property Program. These are in addition to IL 00 17-Common Policy Conditions and the Loss Conditions and Additional Conditions in the specific Commercial Property Coverage Form.

What Are CP 01 - Amendatory Endorsements?

The CP 01 - Amendatory Endorsements are as follows:

CP 01 40-Exclusion of Loss Due to Virus or Bacteria

This is a mandatory endorsement in a number of states. It is an absolute exclusion that eliminates all loss or damage caused by disease or illness that causes viruses and microorganisms. Most states use this version of the endorsement, but others may use a different version that has the same title but a different form number. The intent of all versions is similar.

What Are CP 04 - Additional Coverage Endorsements?

The CP 04 - Additional Coverage Endorsements are as follows:

CP 04 02-Increased Cost of Loss and Related Expenses for Green Upgrades

This endorsement allows the insured to anticipate replacing existing non-green construction with green construction following a loss. A percentage of the limit of insurance must be entered on the endorsement schedule, along with the maximum limit to be paid for such upgrades. In addition, business income coverage period of restoration can be extended for the additional time needed for such upgrades. Changes made in the 10 12 edition mesh with changes in CP 00 10 to add flexibility in scheduling on the endorsement and to address deductible concerns.

CP 04 08-Higher Limits

This endorsement is available to increase Coverage Extensions, Additional Coverage, and Theft Limitations limits in the coverage form. Any limit entered replaces the existing limit within the coverage form. It is not added to the existing limit. It can be used only if the coverage form states that the limit can be increased.

CP 04 10-Electrical Apparatus

This coverage form is mandatory on policies that cover public service light, power, and utility property. It modifies the artificially generated exclusion in the causes of loss form by expanding the exception for resulting fire to resulting fire, explosion, or electricity to covered property electrical apparatus. This endorsement includes a $1,000 minimum deductible.

CP 04 11-Protective Safeguards

This endorsement applies only for the fire cause of loss and replaces IL 04 15. It is required when the insurance company provides a premium credit because of any listed protective safeguard. This endorsement lists and describes the various scheduled services or protective safeguards on the insured's premises and requires that the insured keep them in working order which includes being maintained in an “on” position. Protective safeguards are identified by a symbol for automatic sprinkler systems, automatic fire alarms, security services, and service contracts with private fire departments.

Important Note: This is a warranty. If a fire loss occurs and the described systems are not in proper working order at the time, the insurance company will not pay for the loss.

CP 04 14-Limited Coverage for Unmanned Aircraft (Scheduled and/or Blanket Coverage)

Unmanned aircraft that are used off premises are considered Property Not Covered unless this endorsement is attached. The aircraft must be described with a scheduled limit of insurance. Valuation can be either ACV or RCV. Coverage can be blanketed. Business income and extra expense coverages can be purchased. This is available only with CP 10 30-Causes of Loss-Special Form. An important limitation is that coverage does not apply when the aircraft is used to deliver goods to others.

CP 04 30-Electronic Commerce (E-Commerce)

CP 04 30-Electronic Commerce (E-Commerce) fills the gap created because electronic data is considered property not covered in the property coverage forms. This endorsement applies to both direct and indirect loss.

CP 04 31-Changes-Fungus, Wet Rot, Dry Rot, and Bacteria

This endorsement replaces the $15,000 limit for Additional Coverage-Limited Coverage for Fungus, Wet Rot, Dry Rot and Bacteria in any of the causes of loss forms with the limit on the endorsement schedule. The limit can apply per location.

What Are CP 10 - Causes of Loss Endorsements?

The CP 10 - Causes of Loss Endorsements are as follows:

CP 10 10-Causes of Loss-Basic Form

he Insurance Services Office (ISO) Commercial Property Program Causes of Loss Forms are designed to work with a coverage form. The separate causes of loss forms allow the insured to customize its coverage. After selecting the appropriate coverage, the insured then selects a causes of loss form for each insured property. This provides maximum flexibility in arranging insurance coverage.

The Causes of Loss Forms answer the question, "What must happen in order for coverage to apply?" The more causes of loss provided, the more expensive the policy.

CP 10 20-Causes of Loss-Broad Form

CP 10 28-Earthquake and Volcanic Eruption Coverage with Flat-Dollar Deductible

All of these provide the same basic optional cause of loss. The differences are the manner in which it is provided, the way the deductible is computed, and the limit of insurance provided.

Throughout this discussion it is important to realize that none of these endorsements eliminate the Earth Movement exclusion in the Causes of Loss Form. They provide very specific coverage. When the earthquake/volcanic eruption coverage provided in this endorsement conflicts with the earth movement exclusion, only the specific part of the exclusion related to earthquake and volcanic eruption is eliminated.

None of these endorsements are stand-alone causes of loss forms. One of the other causes of loss forms (CP 10 10, CP 10 20, or CP 10 30) must also be included.

CP 10 29-Earthquake and Volcanic Eruption Coverage (Sub-Limit Form with Flat-Dollar Deductible)

CP 10 30-Causes of Loss-Special Form

CP 10 32-Water Exclusion Endorsement

This endorsement is withdrawn because its language was incorporated into the 10 12 Causes of Loss Forms.

CP 10 33-Theft Exclusion

(Use with CP 10 30)

This endorsement restricts coverage. It allows the named insured to have all the advantages of the Causes of Loss-Special Form without paying the price for theft coverage. It may be used as an underwriting tool, as a cost savings device, or to prevent duplicate coverage because an inland marine coverage form provides theft coverage. It excludes all theft losses except those that occur during looting that accompanies a riot. Coverage also applies to loss or damage caused by or that result from burglars attempting to enter or exit the premises. The 10 12 edition adds a schedule to the endorsement.

CP 10 34-Exclusion of Loss Due to By-Products of Production or Processing Operations (Rental Properties)

A tenant's operations may produce vapor, gas, smoke, or other substances as a regular part of the production. In such cases, this endorsement can be added to the property owner's coverage form to exclude any damage those releases cause. Examples of such releases are meth-house situations, grease residue, and other legal or illegal substances. This applies to only the buildings and locations on the endorsement schedule.

CP 10 35-Watercraft Exclusion

(Use with CP 10 30)

This endorsement excludes loss or damage to retaining walls, bulkheads, pilings, piers, wharves, and docks that a watercraft strikes. It is mandatory only if such waterfront property has been added to the coverage using CP 14 10-Additional Property.

CP 10 36-Limitations on Coverage for Roof Surfacing

This endorsement restricts coverage. It contains two potential limitations. The first changes roof valuation from replacement cost to actual cash value. The second excludes wind or hail damage to the roof that is considered only superficial or cosmetic. The premises must be scheduled along with the limitation(s) selected.

CP 10 37-Radioactive Contamination

This endorsement adds limited or broad radiation coverage to the property and/or income on the endorsement schedule. The limited coverage provides coverage only if another cause of loss triggers the contamination. The broad coverage does not require that another cause of loss be involved.

CP 10 38-Discharge from Sewer, Drain or Sump (Not Flood-related)

This endorsement covers direct damage and/or business income caused by sewer, drain, or sump water or waterborne discharge. The discharge cannot be the result of a flood. A limit must be entered on the endorsement schedule that may or may not be subject to an annual aggregate based on the entries made on the endorsement schedule.

CP 10 39-Sprinkler Leakage-Earthquake Extension

This endorsement was withdrawn in 2001. CP 10 40-Earthquake and Volcanic Eruption Endorsement now provides this coverage.

CP 10 40-Earthquake and Volcanic Eruption Coverage With Percentage Deductible

CP 10 41-Earthquake Inception Extension

CP 10 44-Theft of Building Materials and Supplies (Other than Builders Risk)

(Use with CP 10 30)

This endorsement adds equipment breakdown to CP 10 30-Causes of Loss-Special Form as a separate cause of loss. It is not a unique coverage form and does not provide additional limits of insurance. It may be an excellent product for many insureds. However, if the insured currently has equipment breakdown or boiler and machinery coverage, comparisons should be made to identify potential gaps in coverage before eliminating the coverage form and replacing it with this endorsement.

Building materials intended to become part of the named insured's building are covered for theft when this endorsement is used. However, the coverage is subject to the limit and the deductible on the endorsement schedule. This endorsement is needed because theft coverage under CP 10 30 does not apply to this property.

CP 10 45-Earthquake and Volcanic Eruption Coverage (Sub-limit Form with Percentage Deductible)

CP 10 46-Equipment Breakdown Cause of Loss

(Use with CP 10 30)

CP 10 47-Suspension or Reinstatement of Coverage for Loss Caused by Breakdown of Certain Equipment

CP 10 51-Grain Properties-Explosion Limitation

(Use with CP 10 10, CP 10 20, and CP 00 99)

This restrictive endorsement is mandatory when insuring grain properties. It excludes coverage under the explosion cause of loss for any explosion due to changes in temperature.

CP 10 52-Broken or Cracked Glass Exclusion Form

This endorsement excludes loss or damage that is the result of existing breaks or cracks listed and described on the endorsement schedule.

CP 10 54-Windstorm or Hail Exclusion

This endorsement excludes windstorm and hail as covered causes of loss at the locations listed on the endorsement schedule.

CP 10 55-Vandalism Exclusion

This endorsement excludes vandalism as a covered cause of loss at the locations listed on the endorsement schedule.

CP 10 56-Sprinkler Leakage Exclusion

This endorsement excludes sprinkler leakage as a covered cause of loss at the locations listed on the endorsement schedule.

CP 10 60-Molten Material

(Use with CP 10 10, CP 10 20, and CP 00 99)

This endorsement adds Molten Material as a covered cause of loss. This means that loss or damage caused by molten material accidentally discharged from equipment is covered.

CP 10 65-Flood Coverage Endorsement

CP 10 65-Flood Coverage Endorsement is an optional causes of loss form. It is important to note that this endorsement does not eliminate the water exclusion in any of the causes of loss forms. It provides very specific coverage. When that coverage conflicts with the exclusion, only that specific part of the exclusion is eliminated.

This endorsement is not a stand-alone causes of loss form. One of the other causes of loss forms, CP 10 10, CP 10 20, or CP 10 30, must also be included.

CP 10 70-Pier and Wharf Additional Covered Causes of Loss

(Use with CP 10 10, CP 10 20, and CP 00 99)

The coverage this endorsement provides is specific to damage to piers and wharves. It should be used only if piers and wharves have been added as covered property using CP 14 10-Additional Covered Property. This additional cause of loss is for damage caused by floating ice as well as if a vessel or floating object collides with the pier or wharf.

What Are CP 12 - General Endorsements?

The CP 12 - General Endorsements are as follows:

CP 12 01-Commercial Property Coverage Part Policy Changes

This general-purpose endorsement is used to list and summarize endorsement and premium changes to a commercial property coverage form or policy.

CP 12 11-Burglary and Robbery Protective Safeguards

This endorsement applies only for the theft cause of loss. It excludes all coverage for theft if, at the time of the loss, the scheduled burglary and robbery protective safeguards are not in working order. In working order includes that the system be turned on and active during non-work hours and while the premises is not occupied.

Important: This is a warranty that voids theft coverage if the described systems are not in working order at the time of loss.

CP 12 70-Joint or Disputed Loss Agreement

This endorsement should be attached when property covered under the commercial property coverage form is also covered under a boiler and machinery or equipment breakdown coverage form. It is especially important when different carriers provide the property and equipment breakdown coverage. It details how a loss that potentially involves both coverage forms are to be settled. The intent of the endorsement is to compensate the named insured promptly and to encourage the carriers providing the coverages to resolve the coverage dispute without delaying the insured's settlement.

What Are CP 15 - Time Element Endorsements?

The CP 15 - Time Element Endorsements are as follows:

Many businesses rely on other businesses to provide materials, supplies, services, or component parts, to purchase their products, or to attract customers. They are often referred to as dependent properties because the named insured depends on them for its financial success. Standard unendorsed business income and extra expense coverage forms limit coverage to suspension of operations that a covered direct loss causes at the named insured's location.

CP 15 01-Business Income from Dependent Properties Limited International Coverage

CP 15 02-Extra Expense from Dependent Properties Limited International Coverage

CP 15 03-Business Income-Landlord as Additional Insured (Rental Value)

This endorsement is used to meet a tenant's contractual obligation to provide coverage for the landlord's rental value. The limit, business income coverage form number, coinsurance, and causes of loss form that applies must be entered on the endorsement schedule. The tenant is not required to carry any other type of business income coverage.

CP 15 04-Discretionary Payroll Expense

This endorsement includes payroll expenses for the listed job classifications or employees without requiring that those expenses be necessary for operations to resume. An option is available to limit coverage to a maximum number of days.

CP 15 05-Food Contamination (Business Interruption and Extra Expense) (10 12 addition)

This endorsement provides expenses to pay for the cleanup following closure by a government authority. It also covers advertising to restore the business's reputation, loss of income, replacement of contaminated food and employee vaccinations that are related to the closure.

CP 15 06-Off-premises Interruption of Business - Vehicles and Mobile Equipment

Businesses that depend on mobile equipment or vehicles to sustain their operations can purchase this endorsement. Extra expenses and loss of business income coverage is provided when the scheduled equipment and/or vehicles are damaged by a covered cause of loss.

CP 15 07-Expanded Limits on Loss Payment

This endorsement customizes the extra expense period of restoration. The number of time periods and the percentages that apply to each time period can be modified to suit a specific operation's needs.

CP 15 08-Business Income from Dependent Properties-Broad Form

CP 15 09-Business Income from Dependent Properties-Limited Form

CP 15 10-Payroll Limitation or Exclusion

This endorsement allows the insured to completely exclude payroll expenses for selected groups of employees. The expenses may be totally excluded or be limited to only a selected number of days. The 10 12 edition eliminates the term “ordinary payroll.” It also increases flexibility by introducing scheduling options. This approach means that the insured can carry a lower limit of insurance in return for a premium surcharge.

CP 15 11-Power, Heat and Refrigeration Deduction

This endorsement excludes the costs of power, heat, or refrigeration used in production operations from continuing business expenses. If utility obligations do not continue after a loss, the named insured might include this endorsement and deduct the cost of power, heat, and refrigeration from its business income limit of insurance. This approach means that the named insured can carry a lower limit of insurance in return for a premium surcharge, but the result is usually a lower net premium.

CP 15 13-Seasonal Leases-Monthly Limits on Loss Payment

This endorsement recognizes that many rental properties are seasonal. Coverage applies only for the months and limits entered in the spaces provided. Coverage applies if the named insured occupies the property or rents it to others.

CP 15 15-Business Income Report/Work Sheet

Insurance Services Office (ISO) CP 15 15-Business Income Report/Worksheet is required whenever the Agreed Value Option is selected, or the Premium Adjustment Form is included with any of the business income coverage forms. Using it for other applications is optional. It is recommended that any business that has business income coverage written on a coinsurance basis complete and use it to assist in analyzing operations and determining the proper limit of insurance.

CP 15 20-Business Income Premium Adjustment

CP 15 15-Business Income Report/Worksheet is an excellent tool to use to develop a realistic business income limit of insurance. It is important to remember that it is just an educated guess because the business income coverage limit is only an estimate of future income based on past performance and figures. The insured that seriously approaches properly insuring its hard-earned assets may decide to select a limit high enough to cover its maximum possible projected income and continuing expenses. However, this means paying a higher premium than necessary.

The Insurance Services Office (ISO) developed CP 15 20-Business Income Premium Adjustment to provide a way to for an insured to select the highest limit necessary while only paying for the amount of insurance actually needed. The named insured can plan for and write a limit of insurance that reflects a best-case exposure scenario but pay only the premium that reflects its actual exposure.

CP 15 24-Mining Properties-Business Income

The Insurance Services Office (ISO) CP 15 24-Mining Properties-Business Income is mandatory when a mining operation purchases business income coverage. Mining operations must select one of three underground coverage options provided under CP 15 24.

CP 15 25-Business Income Changes-Educational Institutions

Each school has its own academic year. It expects to begin and end its academic term on specific dates and to operate during certain time frames. If it cannot open and begin instruction on the first day of the term, it loses its income for the entire term. In addition, it may incur a significant business income loss if there is any concern or “fear” that it may not open at the appointed time.

CP 15 31-Ordinance or Law-Increased Period of Restoration

The common understanding of business income coverage is that it provides the insured with the income lost while the damaged covered property is being repaired. It begins when the property is damaged and ends when the property is fixed. Unfortunately, as with most common understandings, an insured may be very surprised with the coverage gaps revealed when a loss actually occurs.

CP 15 32-Civil Authority Changes

The Civil Authority Additional Coverage in the CP 00 30, CP 00 32, and CP 00 50 covers time element losses when access to the covered business is denied by order of a civil authority. The reason for the order must be due to damage to a non-owned structure from a covered cause of loss and the civil authority must either require continual access to the area or the area must be considered too dangerous to allow public access.

The good news is that coverage applies for up to four weeks.

The bad news is that the coverage is available only for businesses that are located one mile from the damaged structure that triggered the civil order.

CP 15 34-Extra Expense from Dependent Properties

CP 15 45-Utility Services-Time Element

Most businesses depend on utilities that provide water, electricity, heat, air conditioning, and communication services to conduct their operations. Many experience a major indirect loss of income or incur substantial extra expenses to continue operations in different ways or at other locations when any of these critical utility services is interrupted.

Many businesses incur extra expenses to resume operations quickly in an attempt to reduce the amount of their business income loss. They may change to an auxiliary power source or physically move to a temporary location to continue operations or provide services.

The Insurance Services Office (ISO) time element coverage forms do not insure these indirect (and often costly) exposures to loss when the interruption of power is due to a cause of loss that occurs off premises. However, coverage can be added by including CP 15 45-Utility Services-Time Element. It can apply to the Business Income Coverage Forms CP 00 30 or CP 00 32 or CP 00 50-Extra Expense Coverage Form.

CP 15 50-Radio or Television Antennas-Business Income or Extra Expense

Business income coverage forms exclude loss of income due to damage to radio or television antennas. This endorsement eliminates that exclusion. The 10 12 edition included minor editorial changes that do not affect coverage.

CP 15 56-Business Income Changes-Beginning of the Period of Restoration

A deductible is usually defined as a fixed dollar amount that is the named insured's share of a covered loss. However, that definition does not apply to time element coverage. Instead, its deductible is expressed as a period of time. It is a certain period of uncompensated time that must pass before loss payments begin. It is a deductible that is hidden in a definition.

CP 15 57-Business Income and/or Extra Expense Coverage for Year 2000 Computer-Related and Other Electronic Problems

This endorsement can be added only if IL 09 35-Exclusion of Certain Computer-Related Losses is attached. It softens that exclusion by providing an annual aggregate of $25,000 for such computer-related losses.

What Are CP 60 - Leasehold Interest Factor Tables?

The CP 60 - Leasehold Interest Factor Tables are as follows:

Each of these endorsements provides supplementary information to be used with CP 00 60-Leasehold Interest Coverage Form. Each contains a schedule of factors at the stated percentage for use with the coverage form.

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CP 60 05-Leasehold Interest Factors For 5.0%

CP 60 06-Leasehold Interest Factors For 6.0%

CP 60 07-Leasehold Interest Factors For 7.0%

CP 60 08-Leasehold Interest Factors For 8.0%

CP 60 09-Leasehold Interest Factors For 9.0%

CP 60 10-Leasehold Interest Factors For 10.0%

CP 60 11-Leasehold Interest Factors For 11.0%

CP 60 12-Leasehold Interest Factors For 12.0%

CP 60 13-Leasehold Interest Factors For 13.0%

CP 60 14-Leasehold Interest Factors For 14.0%

CP 60 15-Leasehold Interest Factors For 15.0%

What Are Time Element Insurance Endorsements? - The Bottom Line

What are time element insurance endorsements? An endorsement alters the Commercial Property Policy and becomes part of your commercial insurance agreement, and it remains in force until the contract term expires.

The only exception to the above rule is if the time element endorsement has a specific or limited term to which the endorsement is valid. It may renew under the same terms and conditions of the rest of your policy.

Additional Commercial Insurance Endorsements Information

Learn about small business commercial endorsements that add, remove, or change your policy's coverage by altering the standardized coverage form.


Commercial Insurance Endorsements

So commercial insurance endorsements allow you to customize your policy to better fit your business insurance needs without having to buy a new policy.

So business insurance endorsements can either modify the basic policy by removing coverages that you don’t need, or remove one or more exclusions, adding those coverages back into the policy.

There are many types of commercial insurance endorsements - and while some favor the insurer (by excluding coverage) and some benefit the insured (by adding coverage), below is a list of some of the most common uses for business insurance endorsements:


  • Additional Insured: This is one of the most common endorsements that adds someone other than you to your insurance policy. It is typically required by some sort of contract. Common additional insureds are landlords, general contractors, vendors or customers.
  • Administrative Changes: Newly issued policies can include mistypes, misspellings, or missing words altogether. To correct these errors, the insurer would add an endorsement, rather then having to cancel and issue a new policy. If a policyholder changes their name, an endorsement would reflect that too.
  • Changing Or Adding Addresses: This endorsement covers any change to the insured's property like moving your office to a new location, or expanding to a another location.
  • Deductible Changes: This endorsement manages who can change your deductible as well as when and how much it can be changed.
  • Increased Limits: Occasionally companies need to add endorsements to increase the limits of insurance. For example, you'd use an endorsement to extend workers' compensation benefits not covered by state law. Or, to get a contract you need higher limits on your general liability policy.

Making a policy change usually affects your insurance premium. Anytime coverage is altered there is likely a cost associated with how the policy premium is calculated. Adding coverage usually makes the premium increase, while excluding coverage can reduce the premium you pay.


Types Of Small Business Insurance - Requirements & Regulations

Perhaps you have the next great idea for a product or service that you know will appeal to your local area. If you've got a business, you've got risks. Unexpected events and lawsuits can wipe out a business quickly, wasting all the time and money you've invested.

Operating a business is challenging enough without having to worry about suffering a significant financial loss due to unforeseen and unplanned circumstances. Small business insurance can protect your company from some of the more common losses experienced by business owners, such as property damage, business interruption, theft, liability, and employee injury.

Purchasing the appropriate commercial insurance coverage can make the difference between going out of business after a loss or recovering with minimal business interruption and financial impairment to your company's operations.

Small Business Information

Insurance is so important to proper business function that both federal governments and state governments require companies to carry certain types. Thus, being properly insured also helps you protect your company by protecting it from government fines and penalties.

Small Business Insurance Information

In the business world, there are many risks faced by company's every day. The best way that business owners can protect themselves from these perils is by carrying the right insurance coverage.

The The National Association of Insurance Commissioners (NAIC) is the U.S. standard-setting and regulatory support organization. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer review, and coordinate their regulatory oversight.

Commercial insurance is particularly important for small business owners, as they stand to lose a lot more. Should a situation arise - a lawsuit, property damage, theft, etc. - small business owners could end up facing serious financial turmoil.

According to the SBA, having the right insurance plan in place can help you avoid major pitfalls. Your business insurance should offer coverage for all of your assets. It should also include liability and casual coverage.

Types Of Small Business Insurance

Choosing the right type of coverage is absolutely vital. You've got plenty of options. Some you'll need. Some you won't. You should know what's available. Once you look over your options you'll need to conduct a thorough risk assessment. As you evaluate each type of insurance, ask yourself:

  • What type of business am I running?
  • What are common risks associated with this industry?
  • Does this type of insurance cover a situation that could feasibly arise during the normal course of doing business?
  • Does my state require me to carry this type of insurance?
  • Does my lender or do any of my investors require me to carry this type of policy?

A licensed insurance agent or broker in your state can help you determine what kinds of coverages are prudent for your business types. If you find one licensed to sell multiple policies from multiple companies (independent agents) that person can often help you get the best insurance rates, too. Following is some information on some of the most common small business insurance policies:

Business Insurance Policy Type What Is Covered?
General Liability InsuranceWhat is covered under commercial general liability insurance? It steps in to pay claims when you lose a lawsuit with an injured customer, employee, or vendor. The injury could be physical, or it could be a financial loss based on advertising practices.
Workers Compensation InsuranceWhat is covered under workers compensation insurance? This type of insurance protects a business and its owner(s) from claims by employees who suffer a work-related injury, illness or disease. Workers comp typically provides the injured employee with benefits to cover medical expenses, a portion of his/her lost wages, rehabilitation costs if applicable, and permanent partial or permanent total disability.
Product Liability InsuranceWhat is covered under product liability insurance? I pays an injured party's settlement or lawsuit claim arising from a defective product. These are usually caused by design defects, manufacturing defects, or a failure to provide adequate warning or instructions as to how to safely use the product.
Commercial Property InsuranceWhat is covered under business property insurance? General liability policies don't cover damages to your business property. That's what commercial property insurance is for. It protects all of the physical parts of your business: your building, your inventory, and your equipment, giving you the funds you need to replace them in the event of a disaster. If you work from home, you might consider a Home Based Business Insurance policy instead.
Business Owners Policy (BOP)What is covered under a business owners policy (BOP)? This is a policy designed for small, low-risk businesses. It simplifies the basic insurance purchase process by combining general liability policies with business income and commercial property insurance.
Commercial Auto InsuranceWhat is covered under business auto insurance? This type of insurance covers automobiles being used for business purposes. This could include a fleet of business-only vehicles or a single company car. In some cases it might cover your car or your employee's car while they're being used for business. These policies have much higher limits, ensuring you can cover your costs if one of these vehicles gets into an accident.
Commercial Umbrella PoliciesWhat is covered under commercial umbrella insurance? This type of policy is a sort of "gap" insurance. It covers your liability in the event that a court verdict or settlement exceeds your general liability policy limits.
Liquor Liability InsuranceWhat is covered under liquor liability insurance? It covers bodily injury or property damage caused by an intoxicated person who was served liquor by the policy holder.
Professional Liability (Errors & Omissions)What is covered under professional liability insurance? This type of business insurance is also known as malpractice oe E&O. It covers the damages that can arise from major mistakes, especially in high-stakes professions where mistakes can be devastating.
Surety BondWhat is covered under surety bonds? Bonding is a contract where one party, the SURETY (who assures the obligee that the principal can perform the task), guarantees the performance of certain obligations of a second party, the PRINCIPAL (the contractor or business who will perform the contractual obligation), to a third party, the OBLIGEE (the project owner who is the recipient of an obligation).


Who Needs General Liability Insurance? - Virtually every business. A single lawsuit or settlement could bankrupt your business five times over. You might also need this policy to win business. Many companies and government agencies won't do business with your company until you can produce proof that you've obtained one of these policies.

Business Insurance Required by Law
Small Business Commercial Insurance

If you have any employees most states will require you to carry worker's compensation and unemployment insurance. Some states require you to insure yourself even if you are the only employee working in the business.

Your insurance agent can help you check applicable state laws so you can bring your business into compliance.

Other Types Of Small Business Insurance

There are dozens of other, more specialized forms of small business insurance capable of covering specific problems and risks. These forms of insurance include:

  • Business Interruption Insurance
  • Commercial Flood Insurance
  • Contractor's Insurance
  • Cyber Liability
  • Data Breach
  • Directors and Officers
  • Employment Practices Liability
  • Environmental or Pollution Liability
  • Management Liability
  • Sexual Misconduct Liability

Whether you need any or all of these policies will depend on the results of your risk assessment. For example, you probably don't need an environmental or pollution policy if you're running an IT company out of a leased office, but you would need data breach and cyber liability policies to fully protect your business.

Also learn about small business insurance requirements for general liability, business property, commercial auto & workers compensation including small business commercial insurance costs. Call us (855) 767-7828.

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