Posted on May 17, 2014
After dedicating time and resources to company growth, it is equally important for Vermont business owners to show the same commitment to protecting their business from claims. One large lawsuit has the potential to financially wipe out company savings; therefore obtaining the right commercial insurance protection is essential.
The State of Vermont only requires that companies with employees obtain workers compensation insurance. But that one policy alone will not grant the comprehensive protection companies need in today's litigious society. Reviewing available insurance options will go a long way in helping business owners understand the coverage they need so that they may purchase the right amount of insurance for the most protection possible.
Vermont Liability Coverage
Accidents, mistakes and injuries in a business can all lead to potential lawsuits. That makes commercial liability insurance crucial for protecting Vermont businesses. General liability coverage protects business assets when companies are sued for personal injuries or property damage - no matter whether they actually caused the injury or damage. This insurance will protect from injuries arising from company products or services, and it will cover the expense of any attorney fees or legal defense costs.
Most companies choose the amount of coverage that will best protect them; however, high risk industries and those with significant assets may need additional insurance protection that standard liability policies do not provide. In those circumstances, an umbrella liability policy can provide extra insurance over and above the basic liability policy. Most business owners choose between $1 million and $5 million additional insurance coverage for that added protection.
Workers Compensation Coverage
Workers compensation insurance is required for Vermont employers with one or more part or full time employees. This coverage will pay for the medical care expenses and lost wages for employees that suffer on the job injuries or illnesses.
Employers who do not purchase workers comp insurance for their employees are subject to $2,500 in fines and/or imprisonment for one year.
Along with general liability coverage, commercial property insurance plays a vital role in fully protecting businesses from potential claims. Property insurance covers buildings along with all their contents including valuable merchandise and business records. When a covered peril such as theft, fire or lightning damage or destroy property, this insurance pays for the repair or replacement of that property. Most policies may be customized to add special coverage a company needs and removing those perils that aren't necessary.
A majority of property insurance policies do not cover flood, earthquake or windstorm insurance. Companies that need these specific perils covered will have to add endorsements to existing policies or purchase separate policies in order to cover them. Because each individual business and location is unique, properly evaluating potential risk is necessary to ensure that the right type and amount of coverage is purchased.
Commercial Flood Insurance
Each year Vermont residents face the risk of experiencing flood damage. Homeowner and commercial property insurance do not cover damage caused by flood or surface water. Separate flood insurance must be purchased to have flood damage protection.
Even those who live and work in areas assumed to be low or moderate risk for flooding still need to consider purchasing flood insurance. The National Flood Insurance Program (NFIP) states that 25 percent of all flood claims come from areas that are not considered at risk for flooding. Vermont business owners must purchase flood insurance from the NFIP. Nonresidential buildings and their contents may be covered for up to $500,000 each. Because there is a 30-day waiting period until the insurance goes into effect, apply and purchase this insurance ahead of time to ensure that business property is adequately protected from potential flooding.
Wind Insurance for Vermont
While many commercial property insurance policies will cover damage caused by wind, it is important to review existing coverage or ask about it when purchasing new coverage. Vermont experiences heavy rains and wind from tropical storms and hurricanes as they move across the Atlantic seaboard. The potential for wind damage and flooding exists for Vermont businesses. For some policies, there may be differing deductibles from the standard property deductible, and so it is important to be aware of how insurance coverage is affected by different perils and hazards. Make sure to have enough insurance protection to cover the repair or replacement of properties. There is nothing worse than having insurance without the proper policy limits to fully pay for damage when it occurs.
Additional Information on Vermont Insurance
Find out more about Vermont commercial insurance by visiting the State's Department of Banking, Insurance, Securities and Health Care Administration website at http://www.bishca.state.vt.us or calling the Department at (802) 828-3301.