Posted on May 16, 2014
Businesses need to carry adequate insurance protection. If someone slips in a business office or is injured by a company's product, commercial insurance protects and defends businesses against any claims. For property damage, commercial insurance can get companies back in business quickly after an unexpected event.
Each business has unique needs and risks that require insurance protection. Depending on a company's size, assets and employees, customized coverage is available to provide the greatest protection while also meeting business budget demands. Utah businesses will want to evaluate their current insurance and then review the available coverages that will best fit their needs.
Utah Liability Coverage
If a business is sued for claims of injury by a customer who used a product that is manufactured or distributed by that business, general liability insurance will cover any damages that the company may be liable for as well as the legal expenses associated with defending the claim. If someone is hurt on business premises, it will also pay the medical bills of the injured party. Liability also covers slander, libel and false advertising.
Overall, commercial liability insurance covers a broad range of potential hazards for which a company may be held financially responsible. The amount of coverage needed is usually based on a company's size, assets, and total potential risk. When standard liability policies are not enough to financially protect a company, umbrella liability insurance will provide additional insurance amounts over and above the basic policy. These umbrella policies typically offer an additional $1 million to $5 million of insurance coverage.
Workers Compensation Coverage
Workers compensation insurance pays for medical care and lost wages of employees for work related injuries or illnesses. The State of Utah requires that all employers obtain workers compensation coverage. Certain exemptions exist for agriculture workers, domestic help, real estate brokers, sole proprietorships, partners and LLC companies. Corporate directors and officers are considered employees and must provide written request for exclusion from coverage.
Workers comp insurance may be purchased from private insurance carriers of the State Workers Compensation Fund (WCF). The WCF cannot decline coverage to any Utah employer.
Utah businesses purchase commercial property insurance to protect against damage to buildings and theft of equipment. Business property owners will want coverage for both a building and its contents; those who lease their space will need property insurance for building contents such as inventory, computers and valuable records. This insurance compensates property owners when specific "perils" occur such as fire or theft.
Specialized property coverage is also available for business interruption and it is usually added to existing property policies, or included in business owner package policies. This coverage helps in the event of catastrophes that cause businesses to temporarily close or relocate while the building is being repaired. By having this form of coverage, business owners can continue paying their bills despite lost revenue.
Commercial Flood Insurance
Because Utah experiences low annual rainfall amounts, most business owners do not consider purchasing commercial flood insurance to protect their businesses. But flooding can happen anywhere. In fact, flood insurance doesn't just handle floods caused by rainfall. It also protects from overflow of sprinklers, canals, streams and underground water pipes. That makes any business susceptible to potential flood damage. Commercial property insurance does not cover flooding and so, separate policies from the National Flood Insurance Program (NFIP) must be purchased. These policies have a 30-day waiting period so it is important to apply early before spring rainfall or snowmelt create the potential conditions for flooding to occur. The NFIP offers coverage of $500,000 for buildings and another $500,000 for building contents. Tenants may also purchase contents only coverage to protect their business personal property and inventory.
Earthquake Coverage for Utah
While earthquakes in Utah are not as common as in the top three states of California, Alaska and Nevada, Utah does experience small earthquakes each year. Larger earthquakes in the 5.5 to 6.5 range do occur in the state every 10 to 50 years. The greatest threat to Utah citizens comes from the Wasatch fault. This particular fault is 240 miles in length and extends from Malad City Idaho to Fayette Utah. Its close proximity to major population centers in Utah makes this fault of particular concern to citizens and businesses in the state.
Because commercial property insurance does not cover damage caused by earthquakes, a separate policy endorsement must be added to existing business insurance as part of a company's overall protection program. It may also be purchased as a separate policy.
Wildfire Insurance in Utah
Utah's long and arid summers sometimes combine with dry lightning strikes that increase the potential of the threat of wildfires. While most companies are covered for fire damage in their commercial property insurance policies, it is important to review existing insurance to make sure that this potential peril is covered. If fire is not included in existing policies, it can usually be added with a simple endorsement. Many Utah business owners will combine fire coverage with business interruption insurance so that should a fire occur, both the property and income are protected while the business has to shut down for repairs.
Additional Information on Utah Insurance