Posted on May 17, 2014
Shopping for commercial insurance can be quite a challenge for business owners. With unfamiliar, technical jargon and so many different types of policies, finding the right coverage can get downright confusing. Fortunately, expert help is usually just a phone call or visit away. Insurance brokers and agents are specially trained to provide counsel and assessment evaluations to help Maryland business owners in their quest to financially protect their assets from the potential of lawsuits, injuries and property damage.
The only business insurance required by the State of Maryland is workers' compensation insurance, but companies need more comprehensive coverage to fully protect their hard work and assets should an accident or disaster happen. Reviewing the following basic insurance coverage options will allow companies to gain insight into what type of insurance policies will be the most beneficial to their business operations.
Maryland Liability Coverage
Lawsuits and claims can have a financially devastating effect on businesses especially when they involve incidents and accidents completely outside of a business owner's control. General liability insurance protects companies in the event of injuries or accidents that occur on the business premises or from products made or sold by the company. It specifically covers bodily injury, property damage, medical expense and legal defense costs. For example, if a customer alleges that a company's product made them ill, they can sue for the harm that product caused.
Workers Compensation Coverage
Workers compensation insurance covers employees in the event of job related injuries or illnesses. When they are hurt during the course of employment, this coverage pays for medical treatment along with any temporary or permanent disability payments while the employee is unable to work.
The State of Maryland requires that companies with one or more part or full time employees must carry workers compensation insurance. Employers may purchase the coverage from a private insurance company or from the Injured Workers' Insurance Fund. If they qualify, business owners may also choose to be self-insured.
Uninsured employers are subject to fines between $500 and $5,000, imprisonment for one year or both. Employers who hire employees under the age of 18 must make sure they have a work permit. If work permit is not obtained and the minor is injured or killed, companies are subject to double penalties, compensation and a death benefit.
Property insurance is one of the most prominent types of coverage that business owners purchase to protect their business. With the risk of fire, theft, lightning and any number of other events that could potentially harm buildings and personal property, this vital coverage provides financial help when a loss or damage occurs so that companies can stay in business with as little disruption as possible.
Property policies can cover single perils or losses. A business may choose to only purchase a fire insurance policy or theft coverage. Owners may also purchase an all-risk policy that covers any risk or peril that isn't specifically excluded from the policy. Many business property insurance policies specifically exclude earthquakes and floods so companies must purchase separate policies to cover damage from these events.
Small business owners often find that business owner policies of BOPs provide all the coverage they need. The BOP combines two or more different types of policies into one affordable package. Most business owner policies include general liability, business property and then add endorsements for additional insurance protection.
Commercial Flood Insurance
Flooding can happen anywhere and anytime. Coastal residents, in particular, can experience flooding from heavy rains and rising waters as well as hurricane or tropical storm caused flooding. Maryland business owners must purchase separate flood insurance since commercial property insurance does not cover damage caused by floods.
The National Flood Insurance Program provides federally backed flood insurance to business owners in amounts of up to $1 million total with $500,000 toward buildings and $500,000 toward building contents. Should a business experience flood damage to the building or inventory inside, the policy will pay for replacement or repair. Companies that rent their business or office space may apply for contents only coverage to make sure that their personal property is protected.
Hurricane or Windstorm Insurance for Maryland
Coastal communities all along the Atlantic seaboard must take precautions when it comes to hurricane season, and Maryland is no exception. Most homeowner and commercial property insurance policies do not cover hurricane or windstorm damage. Property owners must purchase separate policies to make sure they are covered from damage covered by hurricane, hail, wind or flooding. Always make sure to check existing policies before any inclement weather to ensure that enough coverage is in place should property be damaged and also that all types of perils are covered.
Additional Information on Maryland Insurance
Additional information about Maryland commercial insurance may be found by visiting the Maryland Insurance Administration website at http://www.mdinsurance.state.md.us/sa/consumer/index.html or calling their offices at (800) 492-6116.