Insurance & Employee Benefits
Small Business Property Insurance Continued from << Previous Page
Bogus Money Orders and Counterfeit Money – Should your business make the good faith mistake of accepting bogus money orders or counterfeit money, the insurer will pay up to $1,000 to cover the loss.
Business Income from Dependent Properties – This coverage, which may also be called "Contingent Business Income" or "Contingent Business Interruption," applies when your business is dependent on another operation and the other operation is unable to conduct its usual business because it has been damaged by a cause of loss that is covered by your policy. Should you suffer a loss due to such damage at the premises of a business you depend on (“dependent property”), the insurer will pay for the actual loss of business income you sustain.
For example, you’ve designed a new type of folding beach chair and you have many orders to ship it in time for the summer selling season. Your chairs are manufactured at the Contract Furniture Factory (CFF). Due to damage from a fire, CFF is unable to make your chairs. Should neither you nor CFF have a backup manufacturer who can fulfill the contract, you will lose income from the orders you cannot ship. Your insurer will pay for the net income loss you suffer as a result. If, however, damage at CFF is due to an earthquake and you don’t have earthquake insurance this coverage will not apply since the damage at the dependent property was not due to a covered cause of loss.
Computer Operations Interruption – Should computer operations be interrupted due to a covered cause of loss, your insurer will pay up to $10,000 for business income lost and extra expenses incurred as a result of the computer problem. In addition to other causes of loss, this coverage applies to a loss caused by a computer virus, harmful code or other harmful instructions entered into your computer system or a network to which it is connected. There is no coverage, however, for loss or damage caused by the actions of any employee, including temporary or leased employees, or by anyone you hire to work on your computer system.
Debris Removal – When a building is destroyed or damaged by fire, wind or other peril, debris is left that must be removed before reconstruction can occur. The business policy, within certain conditions, covers the cost of removing debris left behind as a result of a covered cause of loss.
There is an extra $10,000 of coverage for debris removal should the limit of insurance be reached before debris removal has been factored in.
Electronic Data Loss – In the event electronic data is destroyed or damaged as the result of a covered cause of loss, the insurer will pay the cost to replace or restore it. Causes of loss that apply to this coverage include a computer virus, harmful code or other harmful instructions entered into your computer system or a network to which it is connected. The coverage applies as well to cyber extortionists who threaten to bring your computer system down with a code or virus if you don’t meet their demands. There is no coverage, however, for loss or damage caused by the actions of any employee, including temporary or leased employees or by anyone you hire to work on your computer system. (Negligent work by third parties should be covered by their liability insurance.)
Expense to Preserve the Value of Property – To preserve the value of property, it may be necessary to move it from the insured premises to another location. For example, if a major storm is predicted and your building has no basement, you may want to move some of your high-
Forgery or Alteration – The insurer will pay up to $2,500 (unless you buy a higher limit) for losses resulting directly from forgery or alteration of any check, draft, promissory note or similar promise of payment in money that you or your agent issued or that someone impersonating you or your agent issued.
Fungi, Rot and Bacteria – Your BOP insurer typically limits the situations in which it will pay for loss or damage caused by fungi, wet or dry rot, or bacteria. Usually, the insurer will pay up to $15,000 only when the underlying cause of the damage is a specified cause of loss other than fire or lightning that occurs during the policy period and only if you used all reasonable means to save and preserve the property from further damage at the time of and after that occurrence.
Window Glass Breakage Expense – Where glass has been broken, the insurer will pay expenses to put up temporary boards if repair or replacement of damaged glass is delayed.
ADDITIONAL COVERAGES YOU MAY NEED
The standard Businessowners Policy (BOP) recognizes that some types of coverage are important for some customers but not for others. It makes provision for adding coverage through what insurers may refer to as "optional coverages," coverage extensions and endorsements. These are among the coverages you may choose to add to your BOP with the payment of an additional premium:
Accounts Receivable – As part of your risk management plan, to the extent feasible, you should keep backup copies of your accounts receivable in a separate location. For some businesses, however, it may be in the nature of the business that accounts receivable records are vulnerable to property loss. If needed, you may extend coverage under your BOP. The accounts receivable extension obligates the insurer to pay amounts due from your customers that you are unable to collect. The limit is up to $10,000 per occurrence for records located on the premises described in the policy "Declarations" or $5,000 for records located elsewhere.
Adding Additional Insureds – In many situations, a business is required by contract or law to add coverage to its BOP for other parties who usually have property at risk that is in the care of the insured. Such parties typically include managers or lessors of a rented or leased premises and mortgage holders. You can add coverage to your BOP with an Endorsement Adding Additional Insureds.
Computer Fraud and Funds Transfer Fraud – Your business may run the risk that someone will cause an unauthorized transfer of funds from your bank account, whether through electronic or written instructions. The Endorsement for Computer Fraud and Funds Transfer Fraud covers this risk. The insurer pays for the loss of money and securities resulting directly from a fraudulent instruction instructing a financial institution to transfer, pay, or deliver money or securities from your “transfer account.” The endorsement defines a “transfer account” as “an account maintained by you at a financial institution from which you can initiate the transfer, payment or delivery of money and securities.”
Burglary and Robbery – If your business has high-
Burglary means taking of property from inside the described premises by a person unlawfully accessing the premises as evidenced by marks of forcible entry or exit. Robbery means unlawfully taking property from a person who has the property in his or her care and custody.
The insurer covers the property on the business premises, while it is at a bank or savings institution, when it is in the custody of any employee or businessowner in his or her living quarters or while it is in transit between any of these places.