3
UNDERSTANDING
WHAT A
POLICY COVERS
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An insurance professional can help you customize your policy based on your
particular needs, such as insuring specialized equipment. Standard business policies
generally include the following types of coverage:
• Property—protection of your physical business location, such as a store, and
its contents;
• Liability—payment for medical costs and other obligations if someone gets hurt
on your business property or you or your employees cause property damage,
including legal defense costs if you are sued; and
• Business Interruption, or Business Income—coverage for lost revenue in the
event that a business needs to close due to fire, burglary, or another covered
disaster; assistance making rent and utility payments; and coverage for operating
your business from a temporary location.
An insurance professional can assist a business owner with these additional types
of commercial coverage:
• Business Vehicle—automotive insurance specifically designed for business
vehicle use;
• Workers’ Compensation—coverage that provides cash benefits and/or medical
care for employees who are injured or fall ill as a direct result of their job;
• Flood Insurance—coverage designed for damage to a business property and
its contents caused by flooding, which is not typically covered under general
business insurance;
• Cyber Liability—protection against cyber risks and costs, including data loss or
corruption, identity theft, extortion, and reputation recovery; and
• Terrorism—coverage for buildings, equipment, furnishings, and inventory
damaged or destroyed in a terrorist attack.
The insurance industry calls the cause of loss, such as fire or theft, a “peril.” Be
sure to check for which perils your policy lists. A homeowner’s policy may provide
coverage for different perils for the dwelling and for personal property. The policy
may also have different deductibles based on the peril.
To have appropriate and adequate coverage for your home or business, it is
important for you to consider the perils for your area. Homeowners, renters, and
business owners who live in areas at high risk for losses from a particular peril may
pay a higher cost for coverage. Always check your individual policy for details. In
general, according to the Insurance Information Institute, homeowners insurance
policies cover the following potential perils:
• Civil unrest
• Explosions
• Falling objects
• Fires/Wildfires
• Hail
• Hurricanes, but not flooding
• Malfunctioning plumbing,
air conditioning, heating, and
sprinkler systems
• Theft
• Tornadoes, but not flooding
• Vehicular damage
• Volcanoes