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Commercial Insurance

by Admin on October 28, 2011

C

ommercial Insurance is defined as a contract between a business owner and an insurer company the purpose of which is to minimize the business owner’s risk against unexpected losses from a variety of cases like weather, vandalism, accidents, lawsuits and the like. A commercial insurance is not free, however, because there is such thing as a premium which is also often referred to as hedge.

Who Benefits?

Any business owner will benefit from a commercial insurance because it will be able to reduce the risk that may be encountered. The business owner insures his company’s real estate, properties, and other assets, as well as the health and safety of his employees. If the owner is a lawyer or a property appraiser or any other professional, he can avail of an Errors and Omissions Insurance. For a medical physician he can avail of the Medical Malpractice Insurance.

Classifications

Insurance products have two classifications: life insurance and non-life insurance. The first includes annuities and pension products and is characterized with long-term investments, while the non-life insurance includes all the other kinds of insurance not covered by the former. Examples include company building hazard policies which has theft, fire, and weather-related hazards, a commercial fleet policy for company vehicles, as well as professional liability policy.

Aside form these two, there are standard line insurance, which covers all mainstream insurance policies like auto insurance and property insurance, worker’s compensation, and then there’s the excess line insurance which offers protections not otherwise provided by the others such as insurance for gun ownership and gun clubs, shooting ranges, taverns, restaurants, bars, vacant buildings, homeowners associations and even daycare centers. It also provides for commercial coverage for event planning, liquor liability, inland and ocean marine, ambulance malpractice.

Getting the Approval

The insurance information and history of the business owner-applicant is an insurance underwriter. It is he who determines the level of risk the company is in and decides whether or not to offer a policy and assign the business owner a premium. Generally speaking, if the risk is high, the amount of the premium will also be high and the cost of the insurance will be high as well.

Predictions

Actuarial science is used by insurance companies in order to determine the risk the company is willing to take. Actuarial science is studying the history and statistics that is based on geographical areas. With these information actuarians are able to predict the likelihood that future claims will happen. This applies to all kinds of insurance but since commercial insurance deals with larger properties, the risks may even be bigger.

Your Insurance Company

Credit rating of insurance companies are based on assets, liability and financial strength. You should based your decision in choosing the right insurance company that fits you based on their rating.

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