Like home and auto, you can use endorsements—also frequently referred to as riders—to modify the coverage provided under a commercial insurance policy, so that it protects your business against related exposures.
Here, I’ll outline some of the most popular endorsements (among hundreds) to help you get a better idea which might apply to your business. Then, I’ll wrap up with how you can learn more.
Popular Commercial Business Coverage Endorsements
It’s important to reiterate that any endorsements you might need for your commercial policy depend on many important variables, such as your business and its specific industry, the type of policy you have (including limits, exclusions, etc.), and your insurance carrier.
Related: Commercial Business Insurance 101
With this caveat in mind, here are several common commercial insurance endorsements, along with their down-to-earth explanation:
Extends general liability insurance to a third party (e.g., a subcontractor) and helps protect them against related lawsuits or damage to commercial property.
Suppose your business can’t operate due to a covered claim. In that case, this coverage may kick in to help pay for ongoing expenses like payroll, taxes, loan payments, and even a temporary location when you cannot utilize your primary property.
If the government issues a direct order that causes your business to close temporarily, this endorsement could help provide relief.
Contingent Business Interruption (CBI)
On the other hand, if one of your suppliers’ or customers’ property is damaged and causes a loss of business income, this endorsement could help provide temporary support.
Directors and Officers Liability
Protects a business’s directors or officers from personal losses and legal fees if they’re sued because of their relationship to the company.
Adds coverage against accidental malfunction and sudden breakdown for machinery or equipment used in the course of business.
Extended Reporting Period
Allows you to report claims under your commercial policy, even after it’s expired.
If you incur any additional expenses following a covered claim to get your business back up and running, this endorsement could prove invaluable.
If your business generates a profit from alcohol, this endorsement provides related liability coverage. Note: This does not replace a general liability policy.
If your business deals in hazardous waste, this endorsement adds coverage for bodily injury and property damage, whether you’re working a current job or have already completed one.
If someone files a claim against your business before purchasing your existing policy, this endorsement could retroactively provide coverage.
If utilities or service lines are damaged or destroyed, which directly impacts your business’s operations, this endorsement could cover related losses. Keep in mind that a peril like earthquake is commonly excluded.
What are Some of the Most Popular Commercial Auto Endorsements?
When it comes to commercial auto policies, it often makes sense to follow many of the same endorsement guidelines as you do when it comes to your personally-owned (versus business-owned) automobiles:
Employees as Insureds
Many businesses employ more than one person who often drives for various commercial purposes, such as deliveries or running errands. And if this employee is involved in an accident while in the course of business-related duties, you could be held liable, which is where the Employee as Insureds endorsement comes in. In fact, this could even provide coverage if your employee owns the vehicle they’re driving when the accident occurs.
Fellow Employee Coverage
If one of your employees causes an auto-related injury to another employee while in the course of business, whether in an owned or leased vehicle, this endorsement could provide coverage.
Auto Loan/Lease GAP Coverage
Sometimes, an auto’s replacement cost can depreciate faster than what’s owed under the loan. And if this deficit exists at the time of loss when your business’s car is totaled in an accident, the insurance company could pay out far less and leave you reaching deep into your pockets.
Bottom line: If you can’t afford to lose money if a vehicle is damaged in an accident and considered a total loss, it’s often a good idea to purchase commercial GAP coverage.
The reality is that you probably can’t afford to go without your business vehicle for several days, weeks, or more. But if your existing automobile requires extensive repairs in the shop, what can you do in the interim? This endorsement could help pay for a replacement rental vehicle during this time.
Additional commercial auto endorsements you might want to consider:
- Airbag coverage – Covers accidental airbag discharge.
- Audio, visual and data electronic equipment – Provides coverage for permanently installed audio, visual, or data electronic equipment.
- Bodily injury redefined – Adds coverage for mental anguish.
- Cancellation – Provides coverage up to 60 days past your commercial policy’s cancellation for non-payment of premium.
- Employee hired auto – Includes coverage for autos hired by employees in the course of business (worldwide coverage is also often available as an additional endorsement).
- Glass breakage deductible – Waives your deductible if you choose to repair a broken windshield, versus replacing it.
- Transportation expense – Provides temporary transportation expenses if a covered automobile is stolen.
How Can You Learn More About Popular Commercial Business Coverage Endorsements?
Regardless of your industry and whether you need straightforward business coverage or auto-related insurance, the staff at IHS Insurance Group is here to answer your questions and ensure you obtain the right coverage at an affordable price.
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