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Roundup: Coverage That Saved The Day

Commercial insurance claims are filed everyday, but we tend to hear about them less often than we hear about a friend’s auto insurance claim from their recent accident. Commercial coverage is no different – we’re more likely to hear about a friend’s dental coverage for a filling than we are to hear about a fellow business owner who had the perfect coverage. We’ve rounded up three recent articles of real claims and the coverages that really saved the day for the business.


Business Income Coverage

One busy Friday afternoon a furniture store experienced an electrical fire.  The damage to the building and contents was extensive.  Cleanup and restoration took about 6 weeks, during which time the store couldn’t be open to the public.

The store averaged sales of about $25,000 per day.  Because the fire was a covered cause of loss under their property policy and they had business income coverage (also known as business interruption insurance), they were compensated for the days of lost income, less their waiting period (usually 72 hours).  This allowed them to cover payroll for their key employees and keep the bills paid while they waited for the store to reopen.


Employment Practices Liability Insurance

A lawsuit was recently filed wherein a Pasadena mother is suing a corporation, claiming that her son committed suicide because of treatment he received while an employee of the organization.  While we won’t recount the specific claims here, EPLI coverage will respond to allegations of harassment, mental anguish, wrongful discipline, defamation, libel or slander.  Even if the allegations prove false, the lawsuit will generate legal fees that could become extensive.

The importance of having Employment Practices Liability Insurance (EPLI) cannot be understated.  The amount of coverage provided for a small premium is well worth the investment.


Commercial Auto Coverage

Tom, a business owner, was using his personal auto primarily for work. He spent most days on the road traveling from client meeting to client meeting.

One morning he was on his way to meet with a client.  On his way he took a call from one of his sales reps to discuss an upcoming presentation.  Distracted, he didn’t realize a van had stopped in front of him and rear-ended the vehicle.  The driver and 5 passengers were injured and taken to the hospital.

Tom’s personal auto policy covers the claim up to the policy limit (which is state minimum and not enough to cover all the medical expenses), but since he was in the course of business, the personal policy did not cover the business entity in the claim.  The injured persons in the other vehicle sued the company that Tom owns to recoup their medical expenses. Fortunately Tom had commercial auto coverage, so the business auto policy picked up the claim as Tom was on company business when the accident occurred.


The business auto policy should be written as symbol 1 (any auto) if possible to cover non-owned autos used in company business.  This allows for coverage under the business auto policy in the event of a claim.


Some of these claims would already be included in the coverage you have, while others can be added as an endorsement (rider), or even as an additional policy. As always, a Hayes Broker would be happy to discuss these coverages, more real examples of claims and how they can protect your business.

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