June 28, 2017 | Errors and Omissions, Industry Insights, Transportation

The Importance of Having the Right Policy Limits and Coverage

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Purchasing the right policies to protect your business, whether you are a transportation company or logistics service provider, is critical in ensuring that your exposures are adequately addressed in the event of a loss. There is a great deal that goes into securing the right insurance, including having proper property and liability limits for each of your policies. This is where working with an experienced transportation insurance firm such Roanoke Trade comes in.

Commercial Property Insurance

Your Commercial Property coverage is designed to protect your business against direct physical loss to your property that has been damaged or destroyed from a covered hazard, such as fire, storm damage, accidents, malicious actions, theft and other risks. To determine how much Property coverage you should carry several factors need to be considered. For example, do you own the building you occupy? If there is a fire that destroys the building, how much would it cost you to rebuild it from the ground up at today’s costs? With the increased costs of labor and materials, could you realistically rebuild your current structure for what you have insured it for? Once you determine what it would cost to rebuild and the amount of the deductible you want to carry, there are other considerations as well. Many Property policies include a coinsurance clause that applies to partial losses, for instance. The clause requires an insured to adequately cover the value of the property, typically between 80 and 100% with the percentage equaling the limit on insurance you must always carry to avoid a penalty in the event of a partial loss. If your policy has a coinsurance value attached to it, you need to have the most updated and accurate information on the total replacement cost of your building and its contents.

There are other factors as well that need to be discussed to make sure you understand the Property insurance you are purchasing. We can review these with you in detail and go over the features and coverage extensions available to you.

Liability Insurance

Commercial General Liability insurance will protect you from claims related to bodily injury and/or damages that occur on your property. In calculating how much Liability insurance to purchase, you need to look at several factors, including the type of business you own (sole proprietorship vs. corporation), how big the business is, who your customers are, where the business is located, how many employees you have, and the experience of your employees. This enables you to look at how much risk you are taking on so that you have a better idea of the amount of coverage you should purchase and what type of coverages should be included as part of your Liability insurance package. Note, a Commercial General Liability policy covers a lot of ground but it doesn’t respond to all exposures, which need to be covered either by endorsement or through other policies. For example, you need a separate Employment Practices Liability Insurance (EPLI) policy to cover employee-related claims such as allegations of discrimination and harassment; a Cyber policy to cover data breaches and other types of cyber attacks; and Errors & Omissions Liability insurance in the event of a claim that alleges improper performance of, or the failure to perform, your professional services, including activities as a customs broker, property broker, domestic freight forwarder, international freight forwarder, NVOCC, or warehouseman. You also may need to extend your basic Liability insurance limits with a Commercial Umbrella policy. A Roanoke professional can also review the ins and out of Liability insurance and what coverages are needed to properly protect your operation.

As you can see, there is a lot to review when it comes to have a comprehensive insurance package for transportation and logistics service providers, and we’ve only touched upon but a few of the important issues here. For information about our insurance products and services and a review of your program, please contact one of our Roanoke Trade professionals at 1-800-ROANOKE (800-762-6653).

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