Commercial Insurance FAQs

Are you looking for the right commercial insurance for your business? Do you want to upgrade your current policy to a better one? It can be overwhelming trying to understand all the different policies and coverage options on the market. Below, find answers to some of the most common commercial insurance-related questions from business owners in Missouri. If you have a unique inquiry, you can contact one of our expert agents to answer all your questions.
Commercial Insurance FAQsWhat Is Commercial Insurance?

Commercial or business insurance is insurance coverage for business risks. Personal insurance and commercial insurance are similar in that they cover damage and injuries that can negatively impact people’s lives. The difference is that personal insurance protects people and their families, while commercial insurance protects business owners and their companies.

Commercial insurance covers losses, claims and lawsuits that may negatively impact employees, business properties, profitability and success. Common losses and claims commercial insurance can cover include:

  • Loss of property due to fire, theft or vandalism
  • Workplace injuries to employees and clients
  • Lawsuits from employees and clients
  • Financial losses due to fraud
  • Damage due to professional omissions or mistakes

An insurance agent will typically assess your business to determine potential dangers and find the ideal combination of policies to protect against those risks. Contacting an insurance service provider to assess your core business risks helps ensure you make the right decisions.

Commercial Insurance FAQs

What Are the Types of Commercial Insurance?

Below, we discuss five common types of commercial insurance that business owners, like you, should consider purchasing based on your individual needs:

1. Commercial Auto Insurance

Also called business auto insurance, commercial auto insurance provides coverage for damage, losses and claims when a business-owned vehicle is involved in an accident. For example, if an employee gets into a car accident while driving your company vehicle, commercial auto insurance can pay for the cost of fixing your vehicle and the medical bills for any injuries sustained.

Depending on your specific policy, commercial auto insurance can include:

  • Bodily injury coverage: Covers medical bills for injuries from the accident
  • Auto liability coverage: Covers legal fees and claims if someone sues for damages that you caused
  • Collision coverage: Covers repair fees to mend damage to your business vehicle from the collision
  • Comprehensive coverage: Covers lost or damaged property from theft or vandalism to your vehicle
  • Uninsured motorist coverage: Covers damage or injuries caused by an uninsured driver

Commercial auto insurance covers various vehicles such as company cars, delivery vans, trucks, logistics vehicles, rental cars and motorcycles. The cost will vary for each business depending on how much coverage you choose, how you use your vehicles, the number of vehicles on your policy and your industry’s level of risk.

Note that your personal auto insurance may not cover your business vehicles. Also, commercial auto insurance requirements vary for different states. For example, Missouri requires commercial auto insurance with varying coverages based on vehicle use and the nature of a business. An insurance agent can help you understand the auto insurance coverages and responsibilities in your state.

David Pope Insurance Services, LLC provides auto insurance services for businesses local to Missouri and the surrounding areas.

2. Builder’s Risk Insurance

Also known as course of construction insurance, builder’s risk insurance protects and indemnifies a construction project still in progress. This means the insurance company will pay for any repairs or replacements for damaged equipment, supplies and materials on-site or in transit.

Builder’s insurance policy can pay for losses and damage due to:

  • Fire
  • Theft
  • Vandalism
  • Lightning
  • Hail
  • Explosion
  • Vehicle
  • Aircraft collision

Depending on your policy, builder’s risk insurance can also cover indirect losses due to damage or losses on a construction project, such as lost sales, additional interest in loans, real estate taxes or rentals. The following are answers to commonly asked questions about builder’s risk insurance:

  • Who needs builder’s risk insurance? Any business or stakeholder in a construction project such as the property owner, contractor, subcontractor, architects or lender needs this insurance.
  • What may not be covered by a builder’s risk insurance policy? Builder’s risk insurance may not provide coverage for losses and damage due to natural disasters such as earthquakes, wind and floods. You can get special coverage for these risks through endorsements or extensions. Also, builder’s risk insurance may not cover losses and damage due to employee theft, wear and tear, war and acts of terrorism, and damage due to faulty designs or planning.
  • Is builder’s risk insurance compulsory in Missouri? No. But your construction project can benefit immensely from purchasing a builder’s risk insurance policy. Speaking to an insurance agent can help you make informed insurance decisions.

David Pope Insurance provides extensive builder’s risk insurance coverage to protect your construction projects around Missouri.

3. Commercial Farmers Insurance

Commercial farmers insurance covers losses and damage to farm supplies and equipment. These policies protect tools, structures, farm supplies and other farming products against fire, theft or other harm.

While some policies offer extensions and endorsements for special cases, commercial farmers insurance for livestock may not cover death due to diseases, old age or natural causes. Additionally, in most cases, protection for crops may only cover seeds and planting materials before they are sown.

You can customize your insurance policy with the coverage you need most. David Pope Insurance has a wide range of coverage to protect your farm.

4. Workers’ Compensation Insurance

Workers’ compensation insurance covers the cost of legal claims, diseases, deaths or injuries incurred by employees who work for your company.

This insurance policy can cover medical bills and lost income due to injury or damage. For example, if an employee slips and falls in your warehouse and breaks their arm, workers’ compensation insurance can cover medical bills to treat their injury. Your company is also responsible for paying lost wages while your employee recovers. Workers’ compensation insurance covers these costs that you would otherwise pay out of pocket.

Excluding Texas, every state requires businesses to carry workers’ compensation insurance. In Missouri, any business with five or more employees must carry a workers’ compensation policy. The only exception is businesses in the construction industry, which must have workers’ compensation for one or more employees.

The cost of your insurance premium depends on the dangers of the work, the number of employees in your company, the level of coverage you need and many other factors. At David Pope Insurance, our expert insurance agents can help you assess your employee operations and determine the level of coverage you need to protect your workers.

5. Liquor Liability Insurance

Also known as dram shop liability insurance, liquor liability insurance protects businesses that distribute, serve and sell alcohol against claims of injury or property damage that an intoxicated patron may cause. For example, if your employee overserves alcohol to a patron who later slips and falls, damages property or causes an accident while driving under the influence (DUI), your company may be liable. Liquor liability insurance can cover the cost of such claims and damage.

Some states in the U.S. require liquor liability insurance before you can get a license to sell alcohol to the public. Common businesses that would benefit from liquor liability insurance include:

  • Restaurants
  • Bars
  • Wineries
  • Nightclubs
  • Breweries
  • Liquor stores
  • Convenience stores
  • Grocery stores
  • Any establishment that serves alcoholic drinks

Liquor liability insurance can help provide peace of mind and financial protection for your business. Learn more about liquor liability insurance and consider purchasing coverage for your business from David Pope Insurance. Speak with an agent to see if you can combine liquor liability insurance with other policies for your business to save money and extend your coverage.

Commercial Insurance FAQs

What Is Commercial Property Insurance?

Commercial property insurance can pay for damage to your company’s facilities, tools and equipment in the event of fire, vandalism or theft. It can help you rebuild your business and bounce back after an unexpected loss. Some financial lenders require commercial property insurance to qualify for loans and leases.

The amount you pay for commercial property insurance depends on several factors, like the size of your buildings and the type of equipment you use. No matter the industry, David Pope Insurance provides commercial property insurance services to help you protect your company’s property.

Commercial Insurance FAQs

What Is Commercial General Liability Insurance?

General liability insurance protects against lawsuits and claims due to injuries or damage incurred by anyone outside your company who interacts with your business.

This insurance covers interactions with customers, vendors and even competitors. If a customer sustains an injury on business premises or gets injured from your products, general liability insurance can cover the medical costs, damage claims or pay for any lawsuit that may arise. General liability insurance also covers copyright infringement, false advertisements, slander or defamatory statements made by your company.

Some businesses bundle general liability insurance and commercial property insurance into a single insurance package called a business owners’ policy (BOP) or commercial package policy.

Commercial Insurance FAQs

What Is Commercial Umbrella Insurance?

Commercial umbrella insurance covers insufficiencies and excesses in other standard insurance policies. They provide businesses with an optional extra layer of coverage. It pays for the extra costs for claims and damage when you exceed the liability limit of existing coverages.

For example, if a competitor files a $2 million claim against your company for slander, but your general liability policy only covers up to $1.5 million, your umbrella insurance can take over and pay for the extra $500,000. The same goes for legal costs, medical bills, replacement due to damage and other liabilities.

The price of umbrella insurance will vary depending on the nature of your business and which policies you have already purchased. You can work with an insurance advisor at David Pope Insurance to help you choose the umbrella insurance coverage that suits your company’s needs.

Commercial Insurance FAQs

Is Commercial Insurance Required by Law?

The business insurance required by law varies by state and depends on where your business operates. Some policies are applicable in almost every state. For example, workers’ compensation insurance is required by law in 49 states, excluding Texas.

In some states, high-risk businesses must have certain insurance coverages before getting their license to operate. For example, bars and nightclubs may be required to purchase liquor liability insurance to obtain their license to operate. Speaking with an insurance agent can help you decide which business insurance is required by law in your area.

What Does Commercial Insurance Cover?

Commercial insurance protects businesses from risks and liabilities that can affect their profitability. Policies can protect against a wide range of damage, but it is important to know exactly what’s covered. Here’s a list of commercial insurance coverage and the risks they cover:

  • Commercial property coverage: Covers the cost of replacing or repairing damage to your business building or equipment due to fire, theft or vandalism
  • Business income coverage: Covers theft, lawsuits, damage claims and other losses that could impact income
  • Workers’ compensation coverage: Pays for employees’ injury claims, medical bills and lost income in cases of workplace injury
  • Professional liability coverage: Protects against damage claims and lawsuits from clients for violating a contract
  • Commercial auto coverage: Covers injuries and damage incurred in accidents involving your company’s vehicles
  • Commercial umbrella coverage: Provides an extra layer of protection to cover liabilities that exceed the limits of standard insurance policies
  • Cybersecurity coverage: Covers damage and losses due to data breaches and cyberattacks
  • Commercial flood coverage: Protects against the cost of damage caused by a flood on your business premises
  • Employee practices coverage: Pays for the cost of claims and lawsuits from your employee
  • Business crime coverage: Covers losses due to fraud, embezzlement, forgery and other employee financial crimes

You can customize your insurance policy to meet your unique needs. An experienced insurance agent can help you choose the right policies to address the risks and liabilities that are most relevant to your business.

Commercial Insurance FAQs

Will Business Insurance Cover Flood Damage?

Commercial property insurance may not cover damage due to floods. To protect your business against the cost of flood damage, especially if you operate in a flood-prone zone, you need to purchase a commercial flood insurance policy. Commercial flood insurance covers the cost of damage to your building and business equipment.

Commercial flood insurance can pay for the repairs and lost property if floodwaters damage your building and work equipment. When natural disasters strike, the proper insurance policies can help your business recover.

Will Business Insurance Cover Lawsuits?

Business insurance provides coverage for lawsuits. However, if you operate in an industry prone to lawsuits, you must check that your insurance will cover everything. You can customize your insurance policy to get more or less protection for your business.

General liability insurance covers lawsuits from people outside your company. To protect against internal lawsuits, you should consider adding employment practices insurance.

Will Business Insurance Cover Embezzlement?

Business insurance can protect your business from embezzlement if you purchase a business crime policy. Business crime insurance covers damage due to embezzlement, forgery and fraud. Other standard commercial insurance, such as employment practices insurance, may not cover losses from these crimes. If you are vulnerable to these risks, consider adding business crime insurance to your company’s insurance policy.

Commercial Insurance FAQs

What Is the Average Cost of Business Insurance?

The cost of business insurance will vary greatly from one company to another. It depends on the policies and extent of coverage you choose. One of the best ways to determine the average cost of business insurance is to speak with an insurance consultant for an estimate.

What you pay depends on your unique business needs, the level of coverage you want and the insurance company you work with. For example, businesses with more employees pay more for workers’ compensation coverage than businesses with fewer employees.

At David Pope Insurance, we help businesses save on insurance premiums by creating an individualized policy that fits your budget.

How Is Business Insurance Cost Determined?

To determine how much you pay for business insurance premiums, insurance companies look at the following factors:

  • Your profession and the nature of your business
  • The risk you want to cover
  • Your employee and business activities and how prone you are to the risks
  • Number of employees
  • Your location
  • The level of coverage and deductibles
  • Your property
  • Your financial history

Each factor carries different weights in determining your insurance premium. If you use your company trucks to transport valuable goods long distances, you can expect to pay more on vehicle insurance than if you use a work van to run a few errands across town.

The only way to know your exact insurance price is to get a quote from your insurance agency. While most insurance companies take days to give you a quote, David Pope Insurance typically responds within one business day. Our policies are customizable, and our expert team will work with you to find a comprehensive policy within your budget.

Is Business Insurance Tax Deductible?

Business insurance is tax deductible. The Internal Revenue Service (IRS) classifies business insurance, both legally required and special insurance policies, as business costs. Therefore, you can deduct your insurance premium from your taxable income.

To save the most money, it is important to know exactly what is tax deductible for your business. For example, you may not deduct health insurance from your taxable income. It can be a challenge trying to determine which policies are included. An experienced tax expert can help you determine your tax deductibles and provide the paperwork needed.

The following insurance policies are often tax deductible:

  • General liability
  • Professional liability
  • Workers’ compensation
  • Commercial property
  • Business interruption insurance
  • Cyber liability insurance
  • Commercial auto
  • Unemployment insurance policies

Commercial Insurance FAQs

How Do I Get Commercial or Business Insurance?

The first step to getting commercial insurance for your business is to contact a licensed and experienced insurance agent. Our professional insurance agents at David Pope insurance will assess your business risks and help you choose the coverage you need most. They will recommend the most relevant policies to protect your business and give you peace of mind.

Our team strives to provide fast and friendly service so you can insure your business quickly and easily. At David Pope Insurance, we can send quotes in a matter of hours to help you make informed decisions for your business. We provide comprehensive insurance coverage from our offices in Washington, Union and St. Clair to serve business owners across Missouri. We also provide coverage for businesses in Tennessee, Illinois, Nebraska, Colorado, Arkansas, Iowa and Kansas.

Our team can help protect your assets by providing some of the most affordable insurance rates on the market. Our award-winning team has over 20 years of experience helping businesses save money on insurance. We understand the time and effort that goes into building a successful business, and we want to help you preserve your hard work. Contact us today for a free insurance quote.

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