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BUSINESS PROTECTION - OPTION OR REQUIREMENT
In assisting individuals in starting new businesses or advising those who may purchase an existing business, we are often asked about the insurance needs of the business. The appropriate insurance policies is an integral component of a successful business.
Traditionally, leases or mortgages impose obligations upon the corporation to maintain certain insurance coverage. These insurance requirements include:
- General Comprehensive Liability at a Specified Coverage Amount (generally $1 million minimum)
- Casualty/Fire/Theft (for the replacement cost of a structure)
- Plate Glass
Leases or liens governing equipment, inventory or other assets also generally require as a condition of compliance maintenance of a Casualty/Fire/Theft policy. This coverage is often for the full replacement value of the item. Policies required for a lease, lien or mortgage usually provide for joint coverage for the owner or lessor and for the benefit of the lien holder or lessor as co-insureds. These policies typically do not provide coverage for consequential or incidental losses incurred by the owner. Some insurance policies that are available for business losses, interruption, consequential or incidental losses include:
- Business Interruption
- Property
- Casualty/Fire/Theft
- Employee/Agent Negligence
- Officer and Director Liability
- Professional Service
- Home Office
- Manufacturing (injury to customer or consumer)
- Bonding (upon employees responsible for monies)
- Vehicular
- Hazardous Waste/Toxic Substances/Environmental
In addition to insurance that may be required pursuant to a lease, contract or lien, State and federal law impose obligations upon businesses to maintain certain other business or employee related insurance. These include:
- Worker's Compensation
- Unemployment
This general discussion of various insurance policies is not comprehensive. You should consult with your legal counsel and insurance advisor annually, if not more frequently, to assure that the company's insurance needs are satisfied.
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The Regulatory Law Division of the Law Offices of Alexander & Cleaver provides specialized services to small and large businesses, associations, and a wide range of governmental, municipal, and other clients in the field of public utility law. These services include contract negotiation, legal advice on billing and metering options, information and negotiations on supplier opportunities, advice on aggregation, and all other aspects of selecting an electric supplier and options for our clients. If you have any questions regarding electric restructuring, please contact Gary R. Alexander.
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