78 ©2018 WASHINGTON DC ECONOMIC PARTNERSHIP BUSINESS INSURANCE
1. BASIC FORM includes losses resulting from a fire,
lightning, windstorm, riot or civil commotion, hail and
explosion, plus the cost of removing property to protect it
from further damage.
2. BROAD FORM includes basic plus extended coverage for
other types of perils, such as a roof collapse (e.g. one
caused by snow or ice), falling objects, sprinkler leakage,
breakage of glass, etc.
3. SPECIAL FORM includes basic and broad form coverage
and covers all direct physical losses except conditions
specifically excluded in the policy.
With commercial property insurance, business owners can
buy either actual cash value or replacement cost insurance.
Actual cash value insurance reimburses owners for the
value of lost, damaged or stolen goods after depreciation.
Replacement cost insurance reimburses the owner for the
amount it would take to replace, rebuild or repair damages
with materials of similar kind and quality, without deducting
for depreciation.
BUSINESS INTERRUPTION / CONTINUATION
INSURANCE
Business interruption/continuation insurance covers lost
earnings due to circumstances identified in the policy that
shut down or decrease business operations for an extended
period. Business interruption/continuation insurance covers
expenses associated with running a business. This coverage
can be added to a property insurance policy or purchased as
part of a package insurance product.
LIABILITY INSURANCE
Liability insurance covers a business owner if someone falls
while visiting the premises of their business or if a customer
is hurt by a product the business sells. This insurance
prevents the business from being held responsible for the
injury; this is the risk that liability insurance covers.
Liability insurance, also called commercial general liability
(CGL) insurance, covers four categories of events for which a
business could be held responsible: bodily injury; damage to
others’ property; personal injury, including slander and libel;
and false or misleading advertising.
There are three types of legal damages for which people may
sue that are typically covered by a CGL policy:
• Compensatory damages, which are financial losses
suffered by the injured party and future losses the party
may suffer resulting from an injury they claim in a lawsuit.
• General damages, which are non-monetary losses
suffered by the injured party, such as pain and suffering or
mental anguish.
• Punitive or exemplary damages, which are additional
penalties and charges awarded to an injured party that
go beyond that which is necessary to compensate the
individual for losses and that are intended to punish the
wrongdoer for negligence.
STANDARD LIABILITY INSURANCE DOES NOT PROTECT A
BUSINESS AGAINST:
• Claims from sexual harassment, wrongful termination
of employees, failure to employ or promote, or
discrimination lawsuits;
• Claims related to operating an automobile or truck; and
• Pollution caused by the company.
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