Posted on May 16, 2014
While most companies pay close attention to building profitable businesses, they cannot lose sight of the fact that all that hard work and investment needs to be protected from unexpected events such as injuries, lawsuits and errors. Without appropriate and adequate commercial insurance policies, Alabama businesses are not properly shielded from the expense and stress of liability for injuries and the accompanying lawsuits.
Each business has unique needs that cannot be met with one size fits all, cookie cutter insurance programs. Insurance agents and brokers can help companies customize plans that provide the most protection available while also meeting tight budgets.
Alabama Liability Coverage
Alabama businesses today face the ever present risk of lawsuits, but they can protect themselves from litigation by making sure their company is protected by general liability insurance coverage. Liability insurance covers legal expenses associated with defending a third party claim and will also pay court costs and any award for which the court deems to be the responsibility of the company.
Liability coverage will typically handle claims of bodily injury, property damage, false advertising, legal defense costs and personal injuries such as libel or false arrest.
The state has a contributory negligence system whereby claimants receive compensation only if they share no liability for their accident. Alabama also limits awards to (3x) the amount of the damages with a cap of $1.5 million. Despite these limits, many companies would face financial pressure without liability insurance to cover a million dollar reward in a liability claim.
Workers Compensation Coverage
All employers with four or more part or full time employees are required by the State of Alabama to carry workers compensation insurance. Corporate officers are also counted as employees of the corporation for the purposes of workers compensation. Exemptions to the state requirement include domestic and farm workers as well as municipalities with less than 2,000 residents. These exempt entities may elect coverage if they so choose.
Workers compensation insurance provides employees with medical treatment and wage replacement benefits for temporary or permanent disabilities caused by work related injuries or illness.
The decision to protect business property and equipment is not one to take lightly. Commercial property insurance protects the largest investment business owners make - their physical property, equipment, inventory and business documents. This coverage protects companies from the devastating financial losses associated with such perils as fire, hail, theft or wind. If business property is damaged or destroyed, property insurance pays to repair, replace or compensate the loss.
Many Alabama companies also choose business interruption insurance to complement their commercial property insurance package. When a covered event damages building or equipment to such an extent that a business must close for repairs, this coverage helps business owners pay the bills until their property is restored and they can open for business again.
Commercial Flood Insurance
Just because a business is not located near rivers, lakes or the coast does not mean that it is not at risk for flood damage. Flash floods, heavy rains and hurricanes hit all areas of Alabama not to mention that even clogged sewers and burst pipes are also common causes of flooding. Most commercial property insurance policies do not cover flood damage. Business owners must purchase separate policies to be fully protected from the harm that flooding can cause to buildings and personal property. Flood insurance may be purchased through FEMA's National Flood Insurance program with limits of up to $500,000 for buildings and $500,000 for contents.
Flood insurance is not just for property owners. Companies that lease their business space may also apply for coverage for the contents of their offices and warehouses. Contents only insurance coverage is also available in limits up to $500,000.
Wind, Hurricane, Hail & Coastal Insurance
The Alabama Gulf Coast has seen more than its share of damaging wind and hurricanes. Commercial property insurance does not cover these disastrous events. Business owners in the state must apply for separate insurance coverage to protect from hurricane, hail or wind damage.
There are certain high-risk areas that private insurance companies will not insure. For these specific areas, wind or windstorm insurance is only available through the state run wind pool.
Additional Information on Alabama Insurance