Posted on May 16, 2014
When unexpected events or accidents happen, Kentucky companies will want to protect their assets, employees and customers. Without appropriate commercial insurance coverage, a business is exposed to the risk of losing their assets, which inevitably can lead to the business closing.
The only required insurance in Kentucky is workers compensation. While this coverage takes care of employee injuries or illness while on the job, additional coverage is needed to fully protect today's business owner. General liability and property make up the majority of policies most companies need. There are also specialized programs that provide added insurance for more comprehensive coverage.
As a business owner, it is important to take the time to fully understand the types and amount of commercial insurance available. Through strategic planning, business owners will meet their budgets while acquiring the most insurance protection possible for their companies.
Kentucky Liability Coverage
General liability insurance protects companies from any lawsuits that might be made against them. So if someone is injured by a company's products or is hurt will visiting their premises, this coverage would pay for any medical expenses, legal defense fees and awards in the lawsuit. Commercial liability will also cover false advertising, negligence and personal injuries such as libel or slander.
Each liability policy insures up to a certain dollar amount. For those companies that have large assets to protect or are in a high risk industry, umbrella liability provides additional coverage over and above the standard policies. Typically, umbrellas may provide an additional $1 million to $5 million worth of coverage.
Insurance brokers and agents can help business owners properly assess the amount of insurance needed to fully cover any potential risks or lawsuits.
Workers Compensation Coverage
Workers compensation insurance is required for all employers in the state of Kentucky. The only exclusions to this rule apply to federal employees, domestic help, farm workers and casual workers with less than 20 consecutive days of work.
Kentucky workers compensation provides benefits for medical treatment payments and wage replacement of employees who are injured or become sick while on the job. Employees may also reject workers comp coverage by filing a waiver with the Department of Workers' Claims. By doing as such, they waive the right to any benefits they might be eligible for under the state workers' compensation laws, but they are able to file civil suit against their employer in cases of negligence or wrongdoing.
Kentucky employers may purchase workers compensation in one of five ways:
1) Through a private insurance carrier,
2) By purchasing through the non-profit, municipal corporation, the Kentucky Employers' Mutual Insurance Authority,
3) Through self-insurance with the approval of the Kentucky Department of Insurance Executive Director and posting a security deposit or bond for potential claims,
4) By joining a self-insurance group of 20 or more employers such as a trade association or
5) Through formation of a captive insurance company with the sole purpose of providing excess workers comp for all members.
While general liability insurance protects companies from lawsuits for injuries or property damage (to third party's property), commercial property insurance offers coverage to business owners for their own property and possessions. This coverage protects buildings from such events as weather damage, fire and theft and also includes protection for business personal property inside the building - items such as computers, equipment and inventory.
Each business has specific needs when it comes to determining the amount of property insurance coverage, and agents can assist in deciding just how much insurance should be in force. Property insurance provides coverage on a replacement cost or actual cash value basis. For the business building itself, replacement cost coverage is the most desirable since it will cover the cost of rebuilding the property at current prices.
Commercial Flood Insurance
Business owners with commercial property insurance need to be aware that these policies do not cover flood damage. When heavy rains and winter snowmelt create rising waters and flooding, commercial flood insurance will provide added security that business property will be repaired or replaced should it be damaged or destroyed. Flood insurance can be purchased through the National Flood Insurance Program for up to $500,000 for buildings and $500,000 for building contents. Planning ahead is also important because there is a 30 day waiting period until flood policy protection goes into effect.
Tornado Insurance for Kentucky
Commercial property insurance provides good overall protection for Kentucky businesses, but when tornadoes or major windstorms strike, business owners will want to make sure that their insurance coverage is adequate for paying for any damage caused by these storms. Most property policies will list named perils such as wind or hail on their policies. All risk policies will cover anything as long as it isn't specifically excluded from the policy. It is important to check policies to know exactly what coverage is provided and then properly assess if additional insurance is needed should tornadoes damage or destroy company property.
Earthquake Insurance in Kentucky
Kentucky might not be well known for earthquakes, but the state's western areas lie right on a major fault line. Standard commercial property policies do not provide earthquake coverage so it is important for Kentucky business owners to evaluate their location and determine if it might be a valuable addition to their overall protection strategy.
Adding earthquake coverage is as easy as requesting it from the insurance broker or agent on existing policies. It is usually added to existing policies as an endorsement or rider and will cover repair or replacement of any covered property.
Additional Information on Kentucky Insurance