Posted on May 17, 2014
Managing risk and protecting commercial assets is crucial for Washington business owners. Understanding available insurance coverage can be useful in planning and budgeting, which can make the difference in keeping a business operational should property damage, injury or lawsuit disrupt the company's operations. Commercial insurance is available to companies so that they can transfer risk and have added security in knowing that should a claim occur, their exposure is limited.
In the State of Washington, only workers compensation and disability insurance is required for businesses; however, these two policies are not necessarily enough to adequately protect businesses. Other coverages important to keep many Washington businesses running smoothly include general liability, errors & omissions and commercial property.
Washington Liability Coverage
In daily business operations, accidents do happen. Liability claims have the potential to financially devastate companies, big or small. A single lawsuit award can quickly deplete company savings. When Washington companies have general liability insurance coverage, they are protected from claims involving personal injury and property damage as well as advertising injury. These policies cover legal defense costs and claims that arise from a covered loss or injury.
General liability policies will protect company property from fire, theft or vandalism along with any claims that arise from negligence, property damage or bodily injury. Since differing coverage amounts are available, Washington companies should seek their insurance broker or agent recommendation about the appropriate coverage for their business.
Workers Compensation Coverage
Workers compensation insurance is mandatory for all Washington employers with one or more employees. Coverage must be obtained through either the Washington State Fund or business owners may choose to be self-insured. To qualify for self-insurance, companies must have a minimum of $25 million in assets and an approved safety program.
Workers' compensation insurance provides payment for medical expenses and lost wages while an employee is sick or injured due to a work related injury or illness.
Acceptable exemptions to the workers' compensation requirement include domestic workers, gardeners, volunteers, minors working on family farms, horse jockeys, musicians hired for specific events, newspaper carriers, insurance agents, cosmetologists or barbers who rent booth space, and student volunteers.
Commercial property insurance is a vital form of coverage that protects the assets of a business. Property insurance is designed to cover damage or loss to business buildings, inventory, signs, landscaping and fences. When determining the appropriate amount of coverage, business owners need to consider which type of cost basis is best for their particular needs. Coverage can be purchased using actual cash value or replacement cost. Additional coverage for specific perils or hazards can also be added to fully customize the property insurance requirements of individual businesses.
Commercial Flood Insurance
Flooding can affect Washington businesses in any location regardless of whether located inland, or in coastal areas. Many flood damage claims occur from burst pipes, blocked drains or uncontrolled run off as opposed to natural flooding disaster caused by rising tides, rain or snowmelt. For businesses located in high risk areas, the Federal flood program provides coverage up to $1 million with $500,000 toward business buildings and another $500,000 for building content. Business rental tenants also can apply for coverage for up to $100,000 for business building contents.
Earthquake Coverage for Washington
General business insurance policies will not cover earthquakes. Should Washington businesses experience damage from seismic activity, the only insurance that will cover that loss is earthquake coverage. Consult your insurance broker to determine the proper amount of earthquake insurance to protect your business investment.
Additional Information on Washington Insurance
To learn more about commercial insurance in Washington State, call the Office of the Insurance Commissioner Consumer Hotline at (800) 562-6900 or visit their website at http://www.insurance.wa.gov/index.asp.