Posted on May 17, 2014
In today's economy, running a successful business requires thorough financial planning. Many business owners invest a lot of time, hard work and even their life savings in growing their companies. Purchasing commercial insurance is essential to protecting that investment.
A savvy business owner understands the importance of taking time to learn about the available insurance options out there. By significantly improving their understanding of the necessary types of insurance coverage, the security of their business is insured against lawsuits and financial damages associated with accidents and injury claims.
New Mexico Liability Coverage
Protecting companies from lawsuits and judgments is the very reason for general liability insurance. Whether facing the threat of negligence, false advertising, bodily injury or damage to a client's property, commercial liability coverage protects business assets from the potential financial devastation that a large lawsuit award could bring to business owners. Companies can rest assured that liability insurance will protect them from the out of pocket costs associated with medical expenses, court costs, legal defense fees and award of damages.
In the event of an employee accusing an employer of harassment, wrongful termination or discrimination, another form of liability insurance called employment practices insurance will provide coverage to defend companies and pay damages if awarded.
Umbrella policies offer extra insurance protection in amounts varying from $1 million to $5 million. Companies that are in high risk industries and face the potential of large awards in lawsuits may find umbrella liability to be the perfect addition to their business protection strategies.
Workers Compensation Coverage
Workers compensation insurance in New Mexico is designed to pay for medical treatment and temporary/permanent disability payments for employees with job related injuries or illnesses.
New Mexico requires that companies with employees must have workers comp coverage. This insurance may be purchased through private insurance companies or self-insurance groups. Additionally, companies with workers compensation premiums greater than $5,000 a year or with self-insurance must also have an annual safety inspection. The Workers Compensation Administration (WCA) provides safety consultants for these inspections free of charge or companies may choose to handle it themselves by hiring a professional or using an insurance company provided safety specialist.
If a business does not carry workers comp, the state may close the business until it is in compliance with the laws. If an employee is injured while the company is uninsured, it can be held liable for all claim costs and penalties.
What happens when a business building is damaged or destroyed by fire? If the company is not insured, it must pay out of pocket to have that building repaired or completely replaced.
If burglars break in and rob a company of a significant amount of inventory, what happens to uninsured companies? They, too, must pay to completely replace those business goods.
Unless companies have a significant amount of savings and cash flow, accepting the risk associated with potential property claims could drive them to financial ruin. With commercial property insurance, business owners have the peace of mind that should there be a fire or theft at their place of business, the policy will pay to repair or replace the damaged or stolen property.
When purchasing property insurance, companies can choose between replacement coverage or actual cash value basis. Most business owners will want to make sure to have replacement coverage for their buildings. This cost basis pays to rebuild the property based on its current value with like materials. Business property doesn't just insure the physical building. It also covers all the belongings inside that building. Companies need to have an accurate assessment of the value of their inventory, computer equipment, and other fixtures so that the right amount of insurance can be provided to replace these items should they be lost, stolen, damaged or destroyed.
Commercial Flood Insurance
The year 2011 saw plenty of flooding in New Mexico that led to a presidential declaration of disaster in several counties. Commercial flood insurance can protect businesses from the cost of flood damage as long as it is purchased ahead of time. There is 30-day waiting period for this policy to become effective and so after flooding happens, it is entirely too late. Business property coverage does not include flooding in the policy. Companies can purchase this coverage through the National Flood Insurance Program with limits of up to $1 million total - $500,000 for the building or structure and another $500,000 for contents of the building such as inventory, equipment and documents.
Wildfire Insurance for New Mexico
While the breathtaking views of the New Mexico landscape make it truly an awe inspiring place to live and work, the wildfire threat in the state creates the potential for significant damage and destruction of personal and business property. Commercial property insurance policies may or may not cover the damage caused by wildfires. Business owners need to review existing policies to determine if fire is a covered peril, and if not, have it added as an endorsement. Otherwise, a separate policy will need to be purchased. For those insurance policies that do cover fire, property owners need to check the amount of coverage that is indicated. In the event that the building or personal belongings need to be completely replaced, the proper policy limits need to be in place.
Additional Information on New Mexico Insurance
Learn more about New Mexico commercial insurance by calling the New Mexico Public Regulation Commission at (888) 427-5772 or visiting the Commission's website at http://nmprc.state.nm.us/insurance/contact-us.html.