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 August 1, 1999

HOW TO BUY PROPERTY/CASUALTY INSURANCE

These days insurance exists for almost everything, but a well-chosen property and casualty insurance plan is one type of coverage that the wise business owner will not disregard.

To find a property and casualty insurance plan that works well for your business, you will need a commercial insurance underwriter. Like underwriters for other types of insurance, commercial underwriters are typically either proprietary agents affiliated with a particular company or brokers who deal with multiple carriers. Insurance brokers generally can supply a better variety of coverage options than their single-carrier counterparts and in most instances, will be the better choice for a first-time policy holder who doesn’t know what types of plans are available.

Check rating

If you decide to seek the services of a proprietary agent, be sure that he or she belongs to an insurance carrier that received no worse than an A- (Excellent) from A.M. Best Company’s rating system, which has long been acknowledged as the insurance industry’s standard for performance. A.M. Best ranks property and casualty insurance firms on a scale of A++ (superior) to F (in liquidation); rankings can be found on the Web at www.ambest.com.

Whether your underwriter is a proprietary agent or multi-carrier broker, they should be able to help determine which types of commercial coverage you need. There are two main categories of commercial coverage: general liability and property.

General liability protects you from responsibility for damages resulting from your negligence — much the same way liability car insurance protects the party at fault in an accident. If you are a house painter whose ladder, mistakenly left unattended, falls over onto something or someone, you could be liable for the damages — and in this instance, you would hope to be covered by a general liability insurance plan.

Commercial property insurance is more analogous to homeowner’s insurance, and like homeowner plans, can provide coverage for a broad range of situations — from floods to fires to worker’s compensation and everything in between. Your underwriter should be able to advise you on which specific types of coverage your business should have and will likely underline the particulars of why some types of coverage will be more expensive for your line of work than others.

Premiums will vary

Premiums for property and casualty insurance plans will vary from business to business. Fire insurance rates will likely be higher for a manufacturer of flammable chemicals than they will be for a plumbing company. Similarly, premiums for liability coverage will be higher for a retail store with a lot of customer traffic than it will be for an Internet service provider that does most of its business over the phone.

In some instances, the dangers that a company’s operations pose to its property or, more frequently, to its employees are considered too great by potential insurers, and the company is deemed uninsurable.

State and government-sponsored agencies, such as the Colorado Compensation Insurance Authority for worker’s compensation, are available in some cases to cover these businesses. A knowledgeable underwriter should know how you can contact these agencies — just one more reason to be sure you find the right underwriter.

These days insurance exists for almost everything, but a well-chosen property and casualty insurance plan is one type of coverage that the wise business owner will not disregard.

To find a property and casualty insurance plan that works well for your business, you will need a commercial insurance underwriter. Like underwriters for other types of insurance, commercial underwriters are typically either proprietary agents affiliated with a particular company or brokers who deal with multiple carriers. Insurance brokers generally can supply a better variety of coverage options than their single-carrier counterparts and in most instances, will be…

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