Understanding insurance coverage for your business and insurance terms

Published by kelvin Ehiozefe on

If you understand the importance of insurance to your business, then having good education on insurance coverage will
be more vital to the success of that business. Today, there are several business
insurance packages available to business owners, but for this post we want to
focus on Commercial Package Policy or the Business owners Policy.
Understanding insurance
The Business owners Policy are package
policy designed for small or medium scale businesses. Now we would take a look at
what makes up package policies. but first we must define what a package means in insurance terms—“A package in insurance lingo combines types of
insurance in one policy. It takes at least two coverage forms to make a package
While a coverage form details your
insurance protection. But note each individual coverage forms may have additional conditions,
or coverage limits. So for a business, a package policy could mean one of each
of this coverage’s:
• Property damage
• Liability against claims
• Crime/Burglary
• Machinery
What included in a package policy
Since most businesses today
opt for the premium savings and more complete coverage of a package policy and
the Mono-line or one line coverage insurance policies are not uncommon. Often,
a Commercial Package Policy has a policy jacket that contains:
• Declarations pages
• General material common to all
• Various, specific coverage
• Boiler and machinery
• Commercial property
• Commercial automobile
• General liability
• Employment practices or
employment-related practices liability.
• Inland marine
• Liquor liability
• Pollution liability
• Products/completed operations
However, it’s your agent’s objectives to
help you understand and accept the coverage essential for your business operations.
In addition, guide you through the
Declarations pages. This is so important because these pages personalize the insurance for you and your
business. If any of the information on the Declarations pages is wrong, you might be confronted with unfortunate outcomes in the event of a loss.
So when you receive a new
insurance policy or a renewal policy, your first priority is to review the new
Declarations. Ensuring all your business
entities are named correctly? The coverage’s and limits you agreed to list as
This review is not a big job, but it is an important one.
As each coverage form in a
package policy will have its own exclusions and perhaps one or more
• Exclusions help set parameters
on the coverage granted by the insuring agreements set out in the form.
• Exclusions are added to make a
policy better fit certain insured’s.
• Endorsements are additions to
the policy.
You must take into account each
part of the policy to understand the whole package. Just as it takes many parts
to run the engine in a car, all the parts of an insurance policy must work
Point To Note;
• Every Package policies contain
Declarations, Exclusions, Endorsements, and Conditions. Each line of insurance
has a separate form. Please take note
• The policy parts work in unison
to provide coverage
• Premiums are often discounted
for package policies.
My Conclusion


Be very cautious of insurance
terminology, as they tend change over time! Also, we observed that insurance companies add their
own policy names. Why? Some insurance mogul says–It makes their product sound sexier. But i will advice you to be very cautious of this! Stick with
the common terminology as much as possible to give you good understanding of
your coverage. Lastly, be familiar with your agent it will save you a lot of stress.

kelvin Ehiozefe

Hi, my name is Kelvin Ehiozefe am an online entrepreneur and a Content writer. I write about Business start-up, Blogging, Lifstyle and Technology

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