Insuring Childcare Centers . . . It Only Takes One

Posted on December 15, 2011. Filed under: Commercial, Personal (Home & Auto) | Tags: , , , , , |

That’s it. Just one. Just a single accident or negligent act can wipe out a small business in a heartbeat. If you are a small business owner, especially in a specialized industy such as childcare, it is critical for you to understand the risks and how to protect yourself.

For example’s sake, let’s stick with childcare. If you provide childcare in-home, your homeowner’s insurance may or may not cover some of your liability exposure. And while it may provide limited coverage for business property, it won’t address child abuse claims or professional liability risks related to your responsibility as a childcare provider. You may think a claim such as abuse is impossible. However, even a false claim can result in serious financial loss due to the cost of defense.

For a daycare center, focusing on liability coverage only is a mistake. Coverage for your property, in the event of fire or flood, is critical. And, Errors & Omissions, in addition to General Liability, will help minimize your vulnrability to claims such as child abuse and other services expected of you.

Obtaining the right insurance is critical, but so is understanding the coverage you have. Find an agent who takes the time to educate you, not only on the benefits of your policies, but also the claims process. You must understand what happens if a claim is made after a policy term ends. Policies can be Occurrence or Claims Made. Do you know what type your policies are?

And finally, there are companies that offer specialized insurance packages for specific industries. They do not always replace every policy mentioned above. But, they can simplify the number of policies needed to ensure adequate coverage and the efficient handling of your claim. It is important to work with an agency that understands you risks and works with multiple companies.

We provide free, no obligation, policy reviews. Contact us today!

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General Liability and E&O . . . NOT Interchangeable

Posted on July 27, 2011. Filed under: Commercial | Tags: , , , , , , , , , , |

We are focusing our discussion in this article on technology companies. However, much of the information applies to businesses that provide professional services.

Some technology companies have either general liability coverage OR an errors & omissions policy. However, both are extremely important to ensure the proper coverage for businesses in the technology (among other professional services) industry. Here is why:

General Liability:

General Liability provides two primary coverages: bodily injury and property damage, either arising from your products, services or operations. However, it often DOES NOT cover:

  1. Electronic data and media property losses, for example.
  2. Economic losses, such as a product causing the loss of customers.
  3. Product recall costs, which must be added by endorsement or through a separate policy.
  4. Generally speaking, professional services and/or advice, and any resulting liability, will be excluded.
  5. Personal and advertising injury specifically for new media, which is expanding to include more and more companies as the technology industry evolves.

Errors and Omissions:

Technology E&O, or Professional Liability, is often overlooked or purchased only when required contractually. But, it is a critical coverage that every technology company should obtain. It is also critical that you work with an insurance agent with an expertise in the technology industry and its coverages, as there is no standard form and policy comparisons are extremely difficult for the general public.

At the most basic level, E&O policies are intended to cover economic loss liability and damages to tangible and intangible property not associated with physical injury. Generally speaking, E&O will not provide coverage for bodily injury, property damage, or personal and advertising injury. It is important to remember that E&O coverage only applies to damages arising from technology products or services, while a GL policy normally covers damages resulting from all products, services and operations.

Rather than obtaining either a General Liability policy or E&O insurance, it is best for a company to purchase both coverages so that coverage gaps, which might otherwise exist, are closed.

There are other ways Technology E&O differs from a General Liability policy, including:

  1. Claims reporting periods.
  2. Deductibles usually apply to E&O policies, but not GL policies.
  3. Whether defense costs reduce the limit of liability on the policy.
  4. Does your E&O policy exclude dishonest acts with no exception for “innocent insureds”? If yes, consider removing this exclusion from your policy.

In addition to the liabilities and losses mentioned above, technology companies also face risks from cyber space claims, network security concerns, privacy allegations, infringement and media liability allegations, etc. While not necessarilly addressed by a Technology E&O policy, these exposures can be covered through endorsements.

The most important take-away from this information is that you need an insurance agent with technology expertise. The more capable your agent is at understanding your business, the more able they will be to secure you appropriate coverage. And a Trusted Choice independent agency is able to quote with multiple insurance companies specialized in your type of risk to ensure not only the best coverage but at the best price.

In addition to his insurance experience, the founder of Keystone Insurance Services, Inc. has an M.S. in Nuclear Physics and has fourteen years experience in technology fields. We are your technology insurance expert. Call us today for a free, no obligation, review of your company’s coverage.

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