Posted on May 16, 2014
Shopping for commercial insurance can be quite confusing. With so many types of coverage available, Tennessee business owners may find it confusing to navigate through the maze of insurance protection options.
The basic reasons companies purchase comprehensive insurance coverage is to fully protect their valuable business investment. Today's business owner is inundated with the need to successfully grow their business while also increasing profits, and then protecting that business from potential lawsuits, property damage or worker/customer injuries. It can certainly be overwhelming at times.
But arming companies with the right information about required commercial insurance and other options to give full protection and peace of mind is as easy as reviewing the following outline of available business insurance coverage.
Tennessee Liability Coverage
General liability coverage is not only the most common insurance purchased by business owners, it is also the most recommended by insurance experts. This broad commercial insurance policy covers unexpected liabilities of a company including product, premises and operations along with personal and advertising injuries. If a company is sued, liability insurance pays the legal defense expenses and any judgments or settlements in the claim.
Workers Compensation Coverage
Tennessee mandates that all employers with five or more part or full time employees have workers compensation insurance. Mining, coal production, and construction companies must carry workers comp if they have one or more employees. The state abides by a no-fault program, meaning that workers compensation will cover employee no matter who is at fault for injury or illness.
Workers compensation insurance provides medical benefits and lost wage replacement when workers become ill or injured while on the job. Employee wage benefits pay after a waiting period of 7 days with those benefits becoming retroactive to the first day of injury after 14 days if worker disability continues.
Companies that own their own business building will want to obtain commercial property insurance with replacement cost coverage. Should the building be damaged by fire or storm, this coverage will completely rebuild the property using the amount necessary to replace the building at current prices.
Landlord property insurance does not cover the possessions of those leasing the property. Therefore, businesses leasing their office or company space will want to consider the advantages of having property insurance. These policies also provide protection for business personal property inside of the building. That means that inventory, furniture, computers and valuable documents will all be covered up to the policy limits in the event of damage or disaster.
When a property is damaged and needs significant repair or even rebuilding, what happens to the business located within the building? Typically, they will need to temporarily close the business. When that happens the company bills and expenses do not go away, and business owners must continue making these payments despite having no sales. This is where business interruption coverage will benefit companies. This type of insurance coverage will reimburse businesses for lost profits and fixed expenses while the business is closed for a covered event. It can truly make a difference in keeping a business ready to reopen once repairs are complete.
Commercial Flood Insurance
The time to purchase commercial flood insurance is well before disaster strikes. The 2010 flooding in what many considered low risk flood areas of Tennessee really brought to light the need for residents and business owners alike to purchase flood protection. Regular homeowners' insurance and commercial property insurance does not include flood damage as part of policy coverage. It is up to citizens to make sure their property is properly covered in the event of flooding. The National Flood Insurance Program (NFIP) which is managed by FEMA offers Tennessee businesses flood protection of up to $1 million in coverage - $500,000 for buildings and $500,000 for contents. Because there is a 30-day waiting period for the insurance to become effective, companies will want to make sure their applications are submitted well ahead of the rainy season.
Besides flooding, Tennessee also experiences frequent tornado action. The Murfreesboro area is considered Tennessee's very own tornado alley, but of course, tornadoes are unpredictable and likely to occur anywhere weather conditions permit. Most business property insurance already includes coverage for wind and tornado damage; however, business owners should evaluate their policies to make sure that these perils are listed as covered events. Adding coverage is as simple as making a call to the insurance broker or agent representing your property insurance. Companies will also want to make sure that the amount of insurance is enough to cover replacing a property should it be destroyed or severely damaged.
Earthquake Insurance in Tennessee
While Tennessee might not be considered by most people to be an area where earthquake insurance is needed, it is in fact situated in the New Madrid fault zone. Each year this region actually experiences upward of 200 small earthquakes detected using special equipment. The last major quake in this fault zone was in 1811. While seismic activity is light compared to other areas of the country, earthquake insurance is much more affordable in Tennessee and it should considered by business owners wanting to have comprehensive insurance to protect their entire operations and property.
Additional Information on Tennessee Insurance