Proper insurance coverage is critical for all businesses, but even more so for brick-and-mortar establishments that allow the public to visit the premises. One way to strengthen a policy is through insurance endorsements, which are riders attached to a policy for coverage adjustments. Purchasing optional coverage to increase protection is a form of endorsement. Here are ways businesses can use endorsements to their advantage.
Endorsements in Business Insurance
An insurance endorsement allows you to add, subtract or modify your insurance coverage. It lets you exclude certain elements from an existing policy as a customization option. These options make it more convenient to stick with an insurance agency rather than search for another one, which can affect productivity. Endorsements remain valid as long as the policy does. They can be amended at any time and are automatically preserved when the policy is renewed.
Insurance endorsements in business insurance, just like for personal plans, are extensions of general liability and commercial property coverage. These endorsements are used across multiple industries to form a baseline for commercial coverage. Each plan is customized since not all businesses need the same type of insurance. For example, a solopreneur who works at home on a computer doesn’t need as much coverage as a brick-and-mortar company that employs a workforce.
Types of Insurance Endorsement
Insurance agencies develop general policies for different industries and allow specific endorsements to cover specialized items such as tools and equipment. Each insurer may offer its own form of blanket coverage as an enhancement to a standard policy. When you talk with an insurance agent ask if you can get a discount for adding blanket coverage.
In business-to-business supply chains, diligent vendors require that their partners carry specific insurance endorsements. The reason these endorsements are necessary is that accidental damage can sometimes happen during the shipping or storage stages. A manufacturer can limit or protect against such losses by adding an endorsement that specifies coverage in the event merchandise is broken or lost in the supply chain.
Another scenario that can benefit from an endorsement is when a contractor expands its staff to ensure both the company and its employees are covered in case their work causes damage to a client’s property. If your workers drive company vehicles, check with an insurance agent to see if it’s more efficient to use a separate commercial auto industry policy. However, if the employees are expected to use their own auto coverage, the employer needs to invest in endorsements not covered in the commercial auto plan to avoid a lawsuit if an accident happens.
Industries that pose a high risk for workers use specific endorsements to cover certain risks that don’t apply to other types of work. Energy and construction companies often use these specialized endorsements. This insurance structure discourages companies from venturing into new risks outside of their normal business activities. For example, an endorsement for tree trimming accidents won’t hold up if the tree trimmer tries to apply their skills to another use of electric sawing that does not fit the description of a tree trimming business.
Deductibles are the out-of-pocket expenses an insured party pays until the policy kicks in. Endorsements can be added to a policy to choose lower deductibles for certain policy elements. When it comes to commercial property in a region prone to severe weather, a business can get a wind and hail deductible endorsement. This means you can split the deductible into two separate deductibles, one for wind and hail damage and a second for “all other perils.”
Understanding insurance endorsements can help businesses avoid underpaying or overpaying for coverage. Contact the experts at 01 Insurance in Astoria, New York to learn more about your business insurance options. We are ready to assist you with all your coverage needs today.