At S&C Assurance, we take the time to understand your activities, to look for and to suggest protections adapted to your needs. You will find some of the most common protections listed below. Depending on your type of business, others might be necessary. Don’t hesitate to call to ask for advice.
- Property Insurance
- General Liability Insurance
- Professional Liability Insurance
- Directors & Officers Insurance
- Business Interruption Insurance
Property insurance aims to protect you against financial losses incurred by the loss of, or damage to your property. Property includes office furniture and equipment needed to operate your business, computers, goods in inventory, the building or commercial condo you own or improvements to your office space if you lease. It is important to adequately evaluate the replacement cost of your property because most insurance policies require it to represent at least 80%, 90% or even 100% of its value, depending on each contract. This clause is called co-insurance rule, according to which you need to maintain a minimum amount of coverage calculated as follows: the percentage specified on the declaration page of the policy multiplied by the current market value or the actual value (again depending on your contract).
Coinsurance is a penalty imposed on the insured by the insurance company for under insuring the value of property. The penalty is based on a percentage stated within the policy and the amount under reported. As an example:
A building actually valued at $1,000,000 has an 80% coinsurance clause but is insured for only $600,000. Since its insured value is less than 80% of its actual value, when it suffers a loss, the insurance payout will be subject to the under-reporting penalty. For example: It suffers a $200,000 loss.
Replacement value: $1,000,000
% of co-insurance: 80%
Required amount of insurance: $800,000
Actual amount of insurance: $600,000
Percentage of loss payable: $600,000 / $800,000 =75%
The insured would recover $150,000 : Loss of 200,000 x 75% (less any deductible).
In this example the under insuring penalty would be $50,000.
The most commonly issued coinsurance percentage would be 80% but can be as high as 100%. The latter would impose the greatest penalty for under insuring. For this reason, it is vital that values of property be accurately reported and updated annually to reflect inflation and other increases in cost.
General Liability Insurance
Liability insurance is designed to offer specific protection against third party claims, for physical or psychological damage. For example a client who fell and badly hurt himself at your place of business sues you and asks for monetary compensation. Compensation might include the amount of income lost because he could not work. It could also include an amount for loss of quality of life during the months of convalescence.
Professional Liability Insurance
Professional liability insurance protects you against monetary damages due to a claim from a client for a wrongful act, error, omission or negligent act, be it real or alleged, done in the course of your professional services.
Directors and Officers Liability Insurance (often called D&O)
Directors and officers have a duty to exercise due diligence in overseeing the activities of the organization that they serve. They are required to act in good faith and in the best interest of the organization. Directors have three basic duties: duty of diligence, duty of loyalty and duty of obedience. Directors and officers can be held personally liable for their actions on behalf of the company. D&O insurance covers damages or defense costs in the event they suffer such losses as a result of a lawsuit for alleged wrongful acts while acting in their capacity as directors and officers for the organization.
The most common reasons for lawsuits
- Not properly overseeing the activities of the organization that they serve
- Unjustified dismissal
- Conflict between Directors
- Failure to disclose information
- Non-payment of wages
- Sexual harassment
- Psychological or physical violence.
Business Interruption Insurance
Your business may come to a halt after a major peril, such as a fire. You may not be able to continue operating from your place of business. Business interruption insurance will allow you to cover the additional costs that are incurred to keep the business going, such as renting temporary office space. It will also cover some fixed expenses, such as loans, tax, utilities and salaries.