Posted on May 16, 2014

Commercial Insurance in Mississippi

Commercial insurance in mississipi

Commercial insurance provides a safety net of protection for Mississippi business owners. In the event of an accident or disaster, this coverage can help companies stay in business rather than possibly closing the doors forever. Learning about the different types of insurance available is relatively simple. Deciding on which coverage and what amount of insurance is right for each individual business requires considerably more investigation and planning. A business insurance broker agent can help with determining the right amount of coverage for full asset protection from whatever unexpected situation may arise.

Mississippi Liability Coverage

Business liability coverage helps business owners should they be sued for negligence, false advertising, slander, injuries or accidents. The claim is usually made by a customer or visitor to the business premises who is hurt in some way either by the company's products, employees or some hazard on or off site. This broad coverage protects companies from potential lawsuits that could financially harm the company if they are found liable. In fact, large lawsuit awards can potentially bankrupt small businesses.

The amount of liability coverage needed will vary from company to company. Many Mississippi small business owners usually purchase $500,000 to $1 million for any potential liabilities or lawsuits that occur. Those companies with significant assets or in higher risk industries face greater risk if sued. Umbrella liability policies are recommended to protect such companies. Umbrella policies can be purchased in any amounts with the average adding an additional $1 million to $5 million in insurance coverage.

Workers Compensation Coverage

Mississippi operates a no-fault workers compensation insurance system. No-fault means that the coverage will pay medical expenses and lost wages to employees with work related illness or injury no matter who is at fault. Death benefits are also payable to the families of employees who die from their work related injury or illness.

Mississippi employers with 5 regular employees must obtain and maintain workers comp coverage. Employers with less than 5 employees may voluntarily enroll in workers comp, but it is not required. Exemptions to the workers compensation requirements include domestic workers, farm laborers and nonprofit employees.

Property Insurance

Should fire, theft or disaster occur, Mississippi business owners need commercial property insurance protecting their buildings, furniture, inventory and grounds. But knowing the right amount of property insurance to purchase can be challenging. Most companies will want to evaluate the value of their assets and then determine which property coverage is best to meet their protection needs.

Property insurance can be purchased on a replacement cost or actual value basis. Buildings will usually require replacement cost valuation because this basis covers for repair or replacement at today's prices. Actual value policies use replacement value less depreciation. While it is less expensive than replacement cost valuation, it will not necessarily provide the right amount of coverage to rebuild a destroyed property and replace all inventory and equipment at current prices.

Property insurance contracts are also written using named perils or all-risk. Named or specific peril policies provide insurance for specific events such as fire, lightning or theft. Any other peril that happens to damage or destroy property will not be covered if not specifically issued in the policy. All-risk policies differ in that any peril other than the ones listed are specifically excluded in the policy. An insurer may offer an all-risk policy to coastal regions that covers any peril but that has windstorm/hurricane coverage specifically excluded from the policy because they do not offer protection from that type of damage.

Commercial Flood Insurance

The State of Mississippi is in one of the largest flood plains in the United States. Flooding is a regular occurrence that residents and businesses face each year. Hurricanes, tropical storms and heavy rains can wreak havoc on low lying areas and cause significant flood damage very quickly. Mississippi business owners may obtain valuable property protection from flooding by obtaining commercial flood insurance from the National Insurance Flood Program. This federally funded program offers businesses flood coverage with policy limits up to $500,000 for buildings and $500,000 for contents. Once approved, there is a 30-day waiting period until the flood coverage goes into effect, and so businesses need to plan ahead by applying for coverage before the hurricane or rainy season starts.

Wind Insurance for Mississippi

When the strong winds of a hurricane, hail storm or tornado moves into Mississippi, no area in the state is truly safe from the possibility of sustaining significant property damage. Many commercial property insurance companies will not cover hurricane or windstorm damage particularly in high-risk areas. Business owners must purchase separate policies to obtain this coverage. Those businesses with existing policies need to review their coverage to make sure wind, hail or tornado damage will be covered in the event of destruction of property by these weather related events.

Additional Information on Mississippi Insurance

Learn more about commercial insurance in Mississippi by calling the state's Insurance Department at (601) 359-3569 or visiting the Department's website at

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