Before you accept a business insurance policy: what you should know

Published by kelvin Ehiozefe on

If you understand the importance of insurance to your business, then having a 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 is a 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 policy”.

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:

• 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 policies

• Various, specific coverage forms.

• 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 liability

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 and limits you agreed to list as expected? This review is not a big job, but it is an important oneAs each coverage form in a package policy will have its own exclusions and perhaps one or more endorsements

Business matters

• 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 together.

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 to 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 advise you to be very cautious of this! Stick with the common terminology as much as possible to give you a good understanding of your coverage. Lastly, be familiar with your agent it will save you a lot of stress.


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