Posted on May 16, 2014
Without proper commercial insurance policies in place, Nevada business owners must take on all the potential risk of lawsuits and payments for injuries of employees or customers. Commercial insurance provides a safety net of protection to keep companies from having to spend large amounts of money for legal defense, judgments, worker's payments or medical expenses out of pocket. When companies are responsible for some sort of accident or injury, just one large award can financially devastate and potentially force a company out of business.
The State of Nevada does not mandate that companies purchase commercial insurance; however, for the sake of protecting business investments and assets, some insurance protection is a must. At a minimum, most business owners choose to obtain general liability and property insurance along with workers compensation insurance if they have employees. The state does require that businesses with employees have workers comp coverage to help with worker related injuries and illnesses.
Nevada Liability Coverage
Standard general liability insurance policies provide business owners with coverage for lawsuits or damage awards that are caused by bodily injury, property damage or personal injury such as slander or libel. These policies will also cover the cost to defend against the lawsuits.
Depending on the level of risk, some smaller companies can meet all their insurance needs with a business owner's policy or BOP. This type of policy combines basic general liability insurance with commercial property all in one package. For more comprehensive coverage, special endorsements can be added to include additional insurance coverages or even separate policies if needed.
Umbrella liability policies provide additional policy amounts over and above a standard policy's limits. This extra insurance is needed when general coverage amounts are too low or a business faces higher than normal risk either due to large assets or being in a high risk industry. Typically, these umbrella policies provide an additional $1 million to $5 million of insurance and pay once the general policy limit is exhausted.
Workers Compensation Coverage
Nevada laws require all companies with at least one employee to carry workers compensation insurance coverage. The only exemption to this rule is for agricultural workers and household domestic workers. Sole proprietors without employees are not required to have this coverage, but they may elect to purchase workers compensation insurance for themselves.
Workers comp insurance covers employees who are injured or become ill during the course of employment. Nevada is considered a no-fault insurance state meaning it will cover workers no matter who or what caused the injury, as long as it occurred during work. It will pay for employee medical costs, lost wages for temporary or permanent disability as well as vocational rehabilitation. Employee wage benefits are 66 & 2/3rds of employee's average monthly wage with a maximum of $3,434.38 for fiscal year 2012.
Penalties for failure to provide coverage include administrative fines of up to $15,000 along with full financial responsibility for all work related injury costs of employee. Should a claim result from death or substantial bodily harm, an employer can also face criminal penalties.
When business buildings or inventory is damaged, destroyed or stolen, commercial property insurance is there to help owners put the pieces back together. Having property coverage is essential to keep companies fully protected from the risk of fire, theft, lightning or accidents. Standard properties take care of any loss to buildings, furniture, computers, inventory and even landscaping. Each plan can be specially tailored to fit the needs of business owners, and insurance broker agents have the expertise necessary to help companies select the right type and right amounts of coverage to provide the best protection available.
Commercial Flood Insurance
Nevada floods can occur any time of year from heavy rain, flash flooding, new developments or even levee breaks like that in Fernley, Nevada in 2008. Many residents and business owners are not aware that standard property insurance does not cover flooding. Companies need to obtain separate flood insurance policies to fully protect their buildings and personal property for potential flood damage.
The National Flood Insurance Program provides up to $500,000 of insurance protection for buildings and $500,000 for building contents. Those companies that rent their business premises rather than own can also obtain contents only coverage for their personal property and inventory. Coverage is based on replacement cost or actual cash value subject to policy limits and deductible.
Earthquake Coverage for Nevada
While many people associate California with earthquakes, Nevada is actually ranked third in the country for seismic activity and earthquakes of 5.0 and higher. Business owners must be prepared should an earthquake strike. Most commercial property insurance policies do not cover earthquakes and separate coverage must be purchased. Certain policies can add earthquake coverage as a special endorsement upon request. It is up to business owners to determine if the risk of earthquakes in their area requires the purchase of earthquake insurance. To adequately protect a building structure and its contents, this coverage must be purchased well in advance of any major seismic activity or earth movement. Earthquake coverage will typically pay for repair or replacement for covered events up to the policy amount limits.
Wildfire Insurance in Nevada
The threat of wildfire is a real concern to Nevada businesses, and being prepared can go a long way to providing security and peace of mind should a wildfire start. Doing business in a high hazard fire area requires that companies make sure their existing commercial property insurance policy covers fire damage. Most standard policies do include fire, but some will require that it be added to the policy as a named peril. This coverage will pay to repair or replace property or buildings damaged by fire, and so it is definitely a highly desired coverage by Nevada residents.
Additional Information on Nevada Insurance