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:
- How Much Does Insurance Company Insurance Cost?
- Why Do Insurance Companies Need Insurance?
- What Type Of Insurance Do Insurance Companies Need?
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.
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 ISO General Liability Code(s): 61226, 61224
- Suggested Workers Compensation Code(s): 8723, 8720
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.
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.
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 Insurance||What 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 Insurance||What 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 Insurance||What 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 Insurance||What 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 Insurance||What 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 Policies||What 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 Insurance||What 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 Bond||What 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
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.
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
Financial institutions handle, receive, disburse, and invest money of others.
They are subject to regulations specific to their operation but they are also subject to legal and moral obligations for their customers.
Customers entrust their funds to these institutions because of their confidence in the management's ability.
Insurance is a necessary means to protect the financial institutions and their customers against various types of losses.
The financial services offered and the personal relationships created by the institution can only be protected through the use of a sound insurance program and appropriate bonding practices.
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.