Insurance Company Insurance Policy Information
Insurance Company Insurance.Insurance companies play the vital role of helping individuals, commercial ventures, and other organizations gain financial security even in the event of unforeseen circumstances.
Insurance companies provide compensation to their customers for losses they have experienced if covered as specified in a written contractual agreement. Property and casualty insurers can offer many types of coverage to businesses and individuals, including aviation coverages, automobile liability and physical damage, bonds, crime, errors and omissions, general liability, inland and ocean marine, professional liability, real and personal property, and workers compensation.
Life and health insurers offer accident, health, and life insurance to individuals or to businesses on a group basis for their employees. Policies may be sold to customers directly by phone or the internet, by employees, agents, or through other financial institutions such as banks or credit companies.
Insurance companies earn their income through policy premiums paid by customers and profits on investments. Insurers are regulated at both the federal and state level and are limited as to the type and kinds of insurance that can be sold, the premiums charged, the underwriting rules determining eligibility for each type of coverage, and the wording of contracts.
Financial regulations require adequate capital to fund losses and unearned premium reserves. Insurance companies may offer a variety of support services to their customers, such as financial planning, loss control inspections, premium financing, risk management, and safety programs.
Some offer services such as health screenings at public venues such as street fairs or festivals, highway roadside services, or sponsoring of public events to gain name recognition.
While some insurers offer a wide spectrum of coverage options, others specialize in certain types of insurance, such as life insurance, health insurance, or excess and surplus insurance policies.
Despite what many who are unfamiliar with this branch of commerce believe, the insurance industry is a relatively predictable, safe, and stable one - both investment strategies and pooled funds from policyholders who do not need to make claims ensure that making insurance payments to those who fulfill the requirements does not stand in the way of making a profit.
Insurance companies still, however, face many of the same risks that any other business would. As such, they too need to be insured. What types of insurance company insurance might insurers require? Discover more in this brief guide.
Insurance company insurance protects insurers from lawsuits with rates as low as $47/mo. Get a fast quote and your certificate of insurance now.
Below are some answers to commonly asked insurance company insurance questions:
- What Is Insurance Company Insurance?
- How Much Does Insurance Company Insurance Cost?
- Why Do Insurance Companies Need Insurance?
- What Type Of Insurance Do Insurance Companies Need?
- What Does Insurance Company Insurance Cover & Pay For?
What Is Insurance Company Insurance?
Insurance company insurance refers to the type of insurance policies purchased by insurance companies to protect themselves from potential financial losses. This type of insurance can include coverage for errors and omissions, professional liability, workers compensation, and property damage, among others.
Insurance company insurance is designed to safeguard the interests of the insurance company and its employees, and to protect against potential losses that may arise from claims made by policyholders.
How Much Does Insurance Company Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small insurers ranges from $47 to $79 per month based on location, size, revenue, claims history and more.
Why Do Insurance Companies Need Insurance?
Insurers need insurance for the same reason any other company does - to meet their legal requirements and to protect their business interests as well as their staff, their property, and third parties who might suffer a harm.
The commercial properties of insurance companies can be impacted by acts of nature - ranging from storms and hailstorms that cause fairly minor damage to earthquakes or hurricanes that devastate the entire locality - just like any other building can. Like other companies, insurers, too, face the risk of theft in all its forms, including cyber theft, theft and fraud on the part of an employee, and burglary or robbery.
Like other businesses, insurance companies may face lawsuits. Personal injury or property damage claims are one example, along with allegations of professional negligence or malfeasance. Employees may be injured in the workplace, or fall victim to auto collisions in company vehicles on their way to a meeting.
Insurance companies are no different than any other financial institution, or any business for that matter, in that they operate in the shadow of hazards that may on any day translate to perils. For that reason, insurers companies, too, need to shield themselves with insurance company insurance.
What Type Of Insurance Do Insurance Companies Need?
Insurance companies of any type would need to equip themselves with similar insurance coverage as any other financial institution.
The exact nature of the policies an insurer would carry depends on variables that include the jurisdiction within which their premises are based, the size of their business, their number of employees, and the value of their assets. Even for insurance companies, commercial insurance brokers can play a role in designing the perfect coverage.
Examples of the types of insurance company insurance needed are:
- Commercial Property: In the event that the commercial venue of an insurer is impacted by perils such as acts of nature, theft, vandalism, or fire, commercial property insurance helps to mitigate the resulting costs. Insurance professionals will already know that flood coverage typically needs to be purchased separately.
- Commercial General Liability: Third party bodily injury or property damage claims can arise from mishaps that occurred on the premises or as a result of the company's activities, and this type of insurance company insurance reduces the legal costs the company will have to pay out of pocket.
- Errors And Omissions: This form of professional liability insurance safeguards financial professionals if they are accused of negligence or wrongful acts, by covering legal costs.
- Cyber Liability: In the event that an insurance company's sensitive digital data are breached or stolen, cyber liability insurance helps manage the resulting expenses.
- Workers Compensation: When an employee sustains a workplace injury or occupational illness, whether resulting from a physical trauma or exposure to harmful substances or dire mental stress, workers' comp steps in to cover the costs if the company could have been held responsible for the injury.
- Commercial Auto: Any company that owns and uses vehicles for professional purposes further needs to obtain commercial auto insurance.
Insurance professionals will be aware that these examples of insurance company insurance policies insurers might need do not represent an exhaustive list, and they will be better placed than anyone to assess their risk profile.
Insurance Companies' Risks & Exposures
Premises liability exposure is limited as most transactions are carried out by the internet, mail, phone, or at the customer's or claimant's business or home. If clients visit the premises, they should be confined to designated areas to reduce the potential for injury from slips or falls. Floors, stairs, and elevators need to be in good condition, with steps and uneven floor surfaces prominently marked.
The number of exits must be sufficient and well-marked, with backup lighting in the event of a power failure. Steps should have handrails, be well-lighted, marked, and in good repair. Parking lots and sidewalks need to be in good repair with snow and ice removed, and generally level and free of exposure to slips and falls.
There should be security in the parking lot equal to or better than the surrounding area. Off-site exposures are extensive as claims adjusters and inspectors visit customers' premises and job sites, including access to sensitive areas. They may be involved with customers of the client to understand all aspects of the operations.
There must be training, procedures, and policies regarding appropriate off-site conduct and methods of ensuring confidentiality. Complaints about adjusters and inspectors should be dealt with quickly.
Personal injury exposure arises from breaches of customers' privacy and release of confidential information and discrimination in underwriting practices.
Product liability exposure is very low as insurance products sold to customers are intangible. There may be some minor exposure if the company sells items like tee shirts or advertising novelties to agents or customers.
Directors' and officers' exposures can be substantial due to competing priorities of numerous stakeholders such as stockholders, policyholders, claimants, employees, and regulators. Directors and officers are more likely to be sued for results of their decisions in times of economic downturn and well-publicized excesses within the financial services industry.
Officers must be thoroughly knowledgeable about the insurance business, able to operate competitively while maintaining profitability, and able to oversee ongoing operations effectively. Directors should include representation from a wide variety of business interests with no conflicts of interest.
Professional liability exposures can be high for insurance companies from their accountants, actuaries, attorneys, auditors, claims adjusters, and inspectors. There must be checks and balances in place to quickly catch and fix errors that are made.
The educational background, training, and licensing (if required) of all professional-level employees must be thorough and continual to keep up-to-date with industry changes.
Workers compensation exposures are moderate due to the wide variety of positions in an insurance company. Office employees spend most of their time on computers and are subject to eye strain, neck strain, and repetitive motion injuries such as carpal tunnel syndrome. All workstations should be ergonomically designed to reduce the chance of such injuries.
Employees traveling outside the office encounter over-the-road exposures, particularly in high-density traffic areas. Claim representatives and inspectors are subject to a variety of unknown exposures from the operations of customers and claimants that they service.
Loss sites may be particularly hazardous due to work in damaged buildings or under compromised conditions. Safety equipment, such as eye or ear protection, hard hats, or non-skid ladders, may be necessary.
Property exposures are primarily from fire due to the electrical wiring for computers, printers, mail sorters, and other electronic office equipment, heating, and air conditioning systems. All wiring must meet current codes, be well maintained, and adequate for the company's operations. Circuit breakers must not be accessible to be overridden.
Circuitry for electronic equipment may be easily damaged from smoke, water, and heat, which will cause a total loss even with a small fire. Although most insurance companies now use paperless record systems, any paper files should be kept in fireproof file cabinets. Fire suppression systems designed for the equipment and paper should be in place.
If the company has an on-site cafeteria for employees, cooking surfaces should be protected with automatic extinguishing agents, alarms, and shut-off valves. Grease filters should be regularly cleaned. Protective equipment should be maintained and serviced on a regular basis.
Appropriate security measures should be taken, including physical barriers to prevent entrance to the premises after hours and an alarm system that reports directly to a central station or the police department. Customers expect prompt service after a claim, so disaster planning for potential interruptions is vital.
Extra expense coverage should be considered as the insurer must continue operations after a loss.
Crime exposures are primarily from employee dishonesty. There may be a money and securities exposure if the insurer accepts premium payments on premises. Insurers need a Financial Institutions Bond to cover these exposures. Background checks should be conducted for anyone who will have access to the company's accounts.
There should be a division of duties between persons handling monetary deposits and receipts and reconciling bank statements. There must be regular monitoring and auditing of the books by outside auditors to prevent and identify problems. Controls and programming to prevent computer fraud should be reviewed.
Extortion is a growing concern due to the large financial assets held by most insurers.
Inland marine exposure is from accounts receivable as premium payments may be spread out over the life of policies, computers for processing policies and claims, and valuable papers and records for customers', claimants', and regulatory information. Backup copies of all records, including computer records, should be made and stored off premises for ease of restoration in the event of a loss.
If adjusters take a claimant's property for salvage, bailees coverage should be considered. Fine arts coverage may be needed if there are paintings or statuary in key areas such as conference rooms or lobbies. There may be signs requiring more comprehensive coverage than available on property forms.
Property in transit coverage will be needed for items claims adjusters or inspectors take to inspection or loss sites such as a catastrophe area.
Business auto exposures may be limited to hired and non-owned for employees running errands. If employees drive their own vehicles for business activities, the company should annually verify that the employee has insurance with adequate limits of coverage.
Larger insurers will have fleets of vehicles regularly assigned to officers, inspectors, claims and sales representatives. There may be pool cars available for employees who are not assigned a company vehicle.
Policies should be in place for personal and permitted use of any owned vehicles by employees and their family members. Any driver must have a valid driver's license and acceptable MVR. Vehicles must be well maintained with records kept in a central location.
What Does Insurance Company Insurance Cover & Pay For?
Insurance companies can be sued for various reasons, and insurance policies are designed to provide protection against potential financial losses arising from such lawsuits. Here are some examples of why insurance companies may be sued, along with how insurance can help pay for the lawsuit:
Breach of contract: Insurance companies can be sued for breach of contract if they fail to fulfill their obligations as stated in the insurance policy. For example, if an insurance company denies a legitimate claim or fails to provide coverage as outlined in the policy, the policyholder may sue for breach of contract.
In such cases, the insurance company's professional liability insurance or errors and omissions (E&O) insurance can help pay for legal defense costs and any damages awarded.
Bad faith: Insurance companies have a duty to act in good faith and deal fairly with their policyholders. If an insurance company unreasonably denies a claim or acts in bad faith, policyholders may sue for damages.
In such cases, the insurance company's professional liability insurance or general liability insurance may cover legal defense costs and any damages awarded.
Negligence: Insurance companies can be sued for negligence if they fail to exercise the level of care and diligence expected in their industry. For example, if an insurance company fails to properly investigate a claim or provide accurate information to a policyholder, they may be liable for damages resulting from their negligence.
In such cases, the insurance company's professional liability insurance or general liability insurance can help pay for legal defense costs and any damages awarded.
Regulatory violations: Insurance companies are subject to various regulations and laws, and can be sued for regulatory violations. For example, if an insurance company fails to comply with state or federal regulations regarding claims handling, marketing practices, or financial reporting, they may face legal action.
In such cases, the insurance company's professional liability insurance or general liability insurance may cover legal defense costs and any fines or penalties imposed.
Employment practices: Insurance companies can be sued for employment practices-related issues, such as wrongful termination, discrimination, harassment, or wage and hour violations.
In such cases, the insurance company's employment practices liability insurance (EPLI) can help pay for legal defense costs and any damages awarded.
It's important to note that insurance policies may have limits, deductibles, and exclusions, so it's crucial for insurance companies to carefully review their insurance policies and work with their insurance providers to ensure they have appropriate coverage to protect against potential lawsuits. Coverage details can vary depending on the specific insurance policy and the jurisdiction in which the insurance company operates. Consulting with legal and insurance professionals is recommended to fully understand the coverage and protection provided by insurance policies.
Commercial Insurance And Business Industry Classification
- SIC CODE: 6311 Life Insurance, 6321 Accident And Health Insurance, 6324 Hospital And Medical Service Plans, 6331 Fire, Marine, And Casualty Insurance, 6351 Surety Insurance, 6361 Title Insurance, 6371 Pension, Health, And Welfare Funds, 6399 Insurance Carriers, Not Elsewhere Classified
- NAICS CODE: 524113 Direct Life Insurance Carriers, 524114 Direct Health and Medical Insurance Carriers, 524126 Direct Property and Casualty Insurance Carriers, 524127 Direct Title Insurance Carriers, 524128 Other Direct Insurance (Except Life, Health and Medical) Carriers, 524130 Reinsurance Carriers
- Suggested Workers Compensation Code(s): 8723 Insurance Companies - Including Clerical & Salespersons, 8720 Inspection of Risks for Insurance or Valuation Purposes NOC
Description for 6311: Life Insurance
Division H: Finance, Insurance, And Real Estate | Major Group 63: Insurance Carriers | Industry Group 631: Life Insurance
6311 Life Insurance: Establishments primarily engaged in underwriting life insurance. These establishments are operated by enterprises that may be owned by stock-holders, policy holders, or other carriers.
- Assessment life insurance organizations
- Benevolent insurance associations
- Burial insurance societies
- Cooperative life insurance organizations
- Fraternal life insurance organizations
- Fraternal protective associations
- Funeral insurance
- Insurance carriers, life
- Legal reserve life insurance
- Life insurance
- Life insurance funds, savings bank
- Life reinsurance
- Reinsurance carriers, life
Description for 6321: Accident And Health Insurance
Division H: Finance, Insurance, And Real Estate | Major Group 63: Insurance Carriers | Industry Group 632: Accident And Health Insurance And Medical
6321 Accident And Health Insurance: Establishments primarily engaged in underwriting accident and health insurance. This industry includes establishments which provide health insurance protection for disability income losses and medical expense coverage on an indemnity basis. These establishments are operated by enterprises that may be owned by stock-holders, policy holders, or other carriers. Establishments primarily engaged in providing hospital, medical and other health services on a service basis or combination of service and indemnity bases are classified in Industry 6324.
- Accident and health insurance
- Assessment associations, accident and health insurance
- Disability health insurance
- Fraternal accident and health insurance organizations
- Health insurance, indemnity plans: except medical service
- Insurance carriers, accident
- Insurance carriers, health
- Mutual accident associations
- Reciprocal interinsurance exchanges, accident and health insurance
- Reinsurance carriers, accident and health
- Sick benefit associations, mutual
Description for 6324: Hospital And Medical Service Plans
Division H: Finance, Insurance, And Real Estate | Major Group 63: Insurance Carriers | Industry Group 632: Accident And Health Insurance And Medical
6324 Hospital And Medical Service Plans: Establishments primarily engaged in providing hospital, medical, and other health services to subscribers or members in accordance with prearranged agreements or service plans. Generally, these service plans provide benefits to subscribers or members in return for specified subscription charges. The plans may be through a contract under which a participating hospital or physician agrees to render the covered services without charging any additional fees. Other plans provide for partial indemnity and service benefits. Also included in this industry are separate establishments of health maintenance organizations which provide medical insurance. Establishments providing these services through their own facilities or employed physicians are classified in Major Group 80.
- Dental insurance (providing services by contracts with health
- Group hospitalization plans
- Hospital and medical service plans
- Medical service plans
Description for 6331: Fire, Marine, And Casualty Insurance
Division H: Finance, Insurance, And Real Estate | Major Group 63: Insurance Carriers | Industry Group 633: Fire, Marine, And Casualty Insurance
6331 Fire, Marine, And Casualty Insurance: Establishments primarily engaged in underwriting fire, marine, and casualty insurance. These establishments are operated by enterprises that may be owned by stock-holders, policy holders, or other carriers.
- Agricultural (crop and livestock) insurance
- Assessment associations: fire, marine, and casualty insurance
- Associated factory mutuals, fire and marine insurance
- Automobile insurance
- Boiler insurance
- Burglary and theft insurance
- Contact lens insurance
- Federal Crop Insurance Corporation
- Insurance carriers: fire, marine, and casualty
- Mutual fire, marine, and casualty insurance
- Plate glass insurance
- Property damage insurance
- Reciprocal interinsurance exchanges: fire, marine, and casualty
- Stock fire, marine, and casualty insurance
- Workers'compensation insurance
Description for 6351: Surety Insurance
Division H: Finance, Insurance, And Real Estate | Major Group 63: Insurance Carriers | Industry Group 635: Surety Insurance
6351 Surety Insurance: Establishments primarily engaged in underwriting financial responsibility insurance.
- Assessment associations, surety and fidelity insurance
- Bonding for guaranteeing job completion
- Bonding of employees
- Bonding, fidelity or surety
- Credit and other financial responsibility insurance
- Fidelity insurance
- Financial responsibility insurance
- Liability insurance
- Mortgage guaranty insurance
- Reciprocal interinsurance exchanges,
- Surety and fidelity insurance
- Surety insurance
- Warranty insurance, home
Description for 6361: Title Insurance
Division H: Finance, Insurance, And Real Estate | Major Group 63: Insurance Carriers | Industry Group 636: Title Insurance
6361 Title Insurance: Establishments primarily engaged in underwriting insurance to protect the owner of real estate, or lenders of money thereon, against loss sustained by reason of any defect of title.
- Guaranty of titles
- Real estate title insurance
- Title insurance
Description for 6371: Pension, Health, And Welfare Funds
Division H: Finance, Insurance, And Real Estate | Major Group 63: Insurance Carriers | Industry Group 637: Pension, Health, And Welfare Funds
6371 Pension, Health, And Welfare Funds: Establishments primarily engaged in managing pension, retirement, health, and welfare funds.
- Pension funds
- Union trust funds
- Union welfare, benefit, and health funds
- Welfare pensions
Description for 6399: Insurance Carriers, Not Elsewhere Classified
Division H: Finance, Insurance, And Real Estate | Major Group 63: Insurance Carriers | Industry Group 639: Insurance Carriers, Not Elsewhere Classified
6399 Insurance Carriers, Not Elsewhere Classified: Establishments primarily engaged in underwriting insurance, not elsewhere classified, such as insuring bank deposits and shares in savings and loan associations.
- Bank deposit insurance
- Deposit or share insurance
- Federal Deposit Insurance Corporation
- Federal Savings and Loan Insurance Corporation
- Health insurance for pets
- Warranty insurance, automobile
Insurance Company Insurance - The Bottom Line
To learn more about the specific types of insurance company insurance policies insurers need, and how much coverage to have and the premiums, consult with a reputable broker that is experienced in commercial insurance.
Additional Resources For Financial Institutions Insurance
Discover the types of commercial insurance that banks, finance companies and other financial institutions need to protect their asset management, deposit, lending, investment and other operations.
- Check Cashing
- Credit Union
- Currency Exchanges
- Finance Companies
- Insurance Company
- Mortgage Broker
- Specialty Financial Institutions And Services
- Specialty Insurance Services
Financial institutions, including banks and finance companies, are responsible for managing and handling large amounts of money on a daily basis. With this responsibility comes a certain level of risk and potential for financial loss due to unexpected events such as natural disasters, cyber attacks, or employee theft.
Business insurance can help protect these financial institutions from financial loss due to unexpected events. For example, a natural disaster such as a flood or earthquake could result in physical damage to a bank's property or equipment, leading to costly repairs and lost revenue. Insurance can cover these costs and help the bank get back up and running as quickly as possible.
In addition, financial institutions are also at risk for cyber attacks and data breaches. These types of incidents can lead to significant financial loss, as well as damage to the institution's reputation. Insurance can provide coverage for the costs associated with responding to a cyber attack, including legal fees, notification and credit monitoring services for affected customers, and public relations efforts to repair any damage to the institution's reputation.
Finally, financial institutions must also consider the risk of employee theft or fraud. Commercial insurance can provide coverage for losses due to employee dishonesty, helping to protect the institution's financial stability and reputation.
In summary, financial institutions have a lot at stake when it comes to protecting their assets and reputation. Commercial insurance can help mitigate the risk of financial loss due to unexpected events, ensuring that these institutions are able to continue serving their customers and fulfilling their financial responsibilities.
Minimum recommended small business insurance coverage: Business Personal Property, Extra Expense, Equipment Breakdown, Financial Institutions Bond, Accounts Receivable, Computers, Valuable Papers and Records, General Liability, Directors' and Officers' Liability, Employee Benefits, Fiduciary Liability, Professional, Umbrella, Hired and Non-Owned Auto, Workers Compensation & Surety Bonds.
Other commercial insurance policies to consider: Buildings, Earthquake, Flood, Leasehold Interest, Real Property Legal Liability, Computer Fraud, Extortion, Fine Arts, Signs, Cyber Liability, Employment-related Practices, Law Enforcement Professional, Business Auto Liability and Physical Damage And Stop Gap Liability.