1. What is a coinsurance penalty? - Commercial policies are written with an amount of insurance limit for property. The coinsurance limit of the policy is a provision that assures that policyholders insure property to a reasonable value. In the event a policyholder ignores or overlooks the relative value of the property insured a penalty may be assessed by the insurance company for underinsuring the property.

  2. Does it really matter if I itemize all of my property for my business? - This depends on the value of the items being insured. General business personal property such as office furniture, phones, books and materials do not need to be itemized for insurance purposes. Items of a 'one of a kind nature', i.e. valuable papers, blue prints, tools and highly technical equipment etc., should be specifically itemized.

  3. Do general liability policies cover errors made by an employer with regards to employee benefits? - General liability policies cover a wide array of liability issues. Liability claims arising out of employment errors and/or discrimination are usually specifically excluded. A separate Employers Liability rider may be placed onto the General Liability policy or a separate Liability policy may be written to cover the administration of employee benefits.

  4. Why do I need to provide certificates of insurance to my creditors and customers? - Certificates of coverage are provided to indicate that coverage for a business or individual exists. A certificate is needed by your creditors and /or customers to prove that you had coverage while work was being performed. Without these certificates your creditor and or customer may put insurance in place on your behalf and charge you for the premium.

  5. If my employee drives my company vehicle do I need to add them as a driver under my commercial policy? - If your employee drives any company vehicle as a normal course of business then they should be added to your commercial policy. If the situation is a one-time occurrence it can be handled under permissive use under your commercial policy.

  6. Replacement cost versus Actual Cash Value Cost, what's the difference? - The discussion of "replacement cost" versus "actual cash value" (ACV) has always been a source of confusion for insured's at the time of loss. The term "replacement cost" is the true replacement cost of a lost item without regard to depreciation. The term "actual cash value" (ACV) is the true replacement cost less depreciation. At the time of loss both a "replacement cost" and "actual cash value" policy will pay your covered loss on an "actual cash value" (ACV) basis. The difference is that a replacement cost policy will reimburse the insured the depreciation cost calculated once the item is replaced.

  7. What is business interruption coverage? - Business interruption coverage is designed to replace and supplement a business when it incurs a loss that disrupts their ability to run their business. The coverage is designed to help a business with the set up of their business at a temporary location after a loss. The coverage can be priced to supply the loss of income for either 30, 60, 90 days and beyond. For many companies this coverage is the most important one to help stabilize operations and customers after a loss.

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