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Welcome to Vegas Lawyer. This site is for people who were hurt in Nevada. Contact us for a free consultation. You may want to read the Las Vegas Personal Injury Law introduction on our home page. Also, you can get an overview of other claims like Wrongful Death, Auto Accidents, Slip & Fall, and Products Liability before you explore the Article below. Click Above Or Below To Go To Vegas Lawyer: vegaslawyer.net Defective Food Products Tort Trials and Verdicts Results Understanding The Types Of Insurance Understanding The Types Of Insurance Confused by the various types of insurance and all the variations in coverage that are possible? This article describes three of the most common types of insurance and illustrates each with easy to understand examples. Property coverage Liability Business interruption PROPERTY COVERAGE Property coverage can be divided into two segments in the business policy: For fixed property (buildings, fixtures, etc.) and contents (equipment, inventory, etc.) OR Purchased as a combined single limit (see Limits section). Your property can be covered as: all risk OR as specified peril (see Limits section). Almost all policies, exclude such events as wear and tear, as insurance is intended to cover sudden and accidental occurrences. Example - If the motor in your 1952 copier suddenly ceases up and the copier dies, don't expect coverage for the copier. However, if in its dying throes, the copier shorts out other equipment on the same line, there could be coverage for the other equipment (provided there are no exclusions for shorts) which is resultant damage of the copier wear and tear; and it would be the same if a fire resulted from the copier. The property section will cover the building (if other than your home) in which you do business: the fixtures utilized to run that business for example, commercial stoves, fixed racks, etc. carpeting drapes, etc. Contents used in your business are also covered here, if you elect this coverage. This includes all non-permanently affixed items: your computer your forms your inventory your stock, etc. Example - A water pipe breaks and floods your office. The carpet, drapes, walls and ceilings would be covered under building coverage; the desks, computers, files, etc. would be covered under contents). There are also specific type of content policies which can be purchased to protect content, material on computer discs, ideas, etc. Commercial Auto policies can include: collision comprehensive rental towing coverage for the automobiles owned by your business Collision occurs when your vehicle hits, or collides, with another object (some policies, do not include hitting animals or falling objects under collision, but place damage caused by these in the comprehensive section), or if the vehicle overturns. Example -Ace employee is rushing to make a delivery and hits a pothole, damaging the undercarriage of the car. This is considered collision, just as if he had hit a telephone pole or another car). Comprehensive picks up all covered losses that are not considered collision. Example - Someone sneaks in and keys scratches into the paint on all of your company vehicles, comprehensive coverage pays to restore the cars to pre-loss condition. Or, if your vehicle is caught in a hail storm, or catches fire, the resulting damage is also covered by comprehensive coverage. Personal Injury Protection (PIP) and Medical Payments (MedPay) are also part of property coverage. In an automobile, these coverages exist to cover medical expenses regardless of who is at fault. State law vary on which policy is primary for these coverages, if the driver of the automobile is other than the owner. Example - Your employee slams his finger in the car door, PIP coverage pays for the medical treatment cost, with no discussion on who is at fault. For business policies, MedPay is usually available to pay for medical expenses incurred due to injury occurring on the premises of your business - again regardless of fault. Example - An elderly customer seems to fall for no particular reason. You are not necessarily at fault, but for good will purposes, you take care of the doctor visit. MedPay takes care of the cost. It is important to note that most of these coverages (first party coverages which apply to property owned by you, or within your control) require that you choose a deductible. The deductible is the monetary portion of the damages which you, as the insured, will bear when a loss occurs. Deductibles vary according to the choice of the insured. The good news is the higher the deductible, the lower the premium; however, know that if you choose a $1,000.00 deductible, the insurance company will pay for all A thorough discussion with your agent will determine which particular coverages best fit your needs. There is no such thing as "full coverage". Your policy coverage is as complete as the coverage you choose. Don't assume something is covered - ask to be sure. Also don't assume that coverages are packaged together in premium costs. For instance, comprehensive and collision coverages are, most often, sold together, but carry individual premium costs. Make certain that your agent spells out all the details. LIABILITY COVERAGE Liability insurance covers claims as a result of actions for which your business is legally liable (responsible). It is important to point out that you can be held liable for the actions of people acting on your behalf, paid or volunteer, under the doctrine of respondent superior. Under this doctrine the business (the master) can be held vicariously liable for its employees (servants or agents) misdeeds if the employee is operating within the scope of their duties. If you, or your employee, is at fault for an accident - or someone claims that you are, you may be expected to reimburse the cost of damages to another person for their injuries or loss of property resulting from that accident. This includes incidents involving your vehicles, as well as those which may occur on your businesses premises (i.e. slip and fall), as a result of your products (product liability, as in the Tylenol scare), or your actions (professional liability, as in liable, malpractice, etc.). Example - Your own a florist, someone forgot to turn off the hose watering the Azaleas, Customer A comes in and slips and falls, crashing into the refrigerated glass case. Customer B witnesses it all. Much blood and an emergency room visit later, Customer A is now treating with the Skull and Bones Chiropractic Clinic and is represented by Dewey, Cheatum and How. They have Customer B's sworn statement about how negligent you were in leaving the water running. They only want $15,000 (so what if Customer A only has $1,000 in medical bills, he's had a lot of pain and suffering!) to settle, or they'll file suit. If you have liability insurance, the insurance company is already handling the demands of the attorney; and if suit is filed, the insurance company will handle your legal defense against the suit. OR Your part-time worker is distracted as she delivers those brochures the insurance company replaced, and rear ends a brand new Lexus. The other driver isn't hurt, but she is livid that she no longer has a trunk. She also uses her car in her real estate business, so needs a comparable rental vehicle. Ouch. And the U Wreck 'Em, We Rack 'Em body shop is delighted - her son needs braces. If you have adequate liability insurance, you hand the whole issue over to your insurance company and relax. It is important to know that if you use your personal vehicle in your business, there is a strong possibility that your personal auto policy may not cover liability claims for damages resulting from an accident during the conduction of business activities. You would be wise to look into a Commercial Auto Policy, or a business endorsement to your Personal Auto Policy. Liability can also be purchased for non-owned vehicles. In instances where an employee delivers, or performs some other functions, for your business in their own cars. Most Personal Auto Policies exclude liability coverage when the covered auto is used for business. Unless, you choose to take your chances and go bare in these instances, call your insurance company or read your policy There are many instances in which your business could become liable - legally responsible - for another person's claims of damages (including products liability, defamation, etc.) resulting from your actions or the actions of those working on your behalf. If you have the proper insurance, the insurance company takes the problem off your hands and pays for the damages up to the limits you have chosen for each policy coverage (See Limits section). In addition, if you are served with a lawsuit, the insurance company absorbs all defense costs (including hiring an attorney on your behalf) and basically takes over the handling of the all legal issues. Even if the suit is frivolous. In most states, the cost of defense if over and beyond the policy limits you have chose for the policy. Example - In the florist example, the insurance company determines that Customer A's demand of $15,000 is unreasonable. Customer A rejects the insurance company's counter offer and sues you. You turn the suit papers over to the insurance company within the specified time (varies state to state, but do it as soon as you are served). The insurance company hires the appropriate attorney and an answer is filed on your behalf. Defense costs in the amount of $8,000 are incurred since it goes to trial. The judge enters a judgment in the favor of the plaintiff (Customer A) for $4,000. To make matters worse, the witness is now making a claim citing that he was hit with flying glass when Customer A fell through the glass case. The policy limits you have chosen is only $10,000. No problem. The plaintiff is paid $4,000 and your policy still has $6,000 in coverage to deal with Customer B (the witness). You can, always, involve your own counsel at any time in the process. In summary, liability insurance takes care of claims for injury, or damage to property, to other people not associated with your business. And it protects you in the event one of those people decides to sue you - no matter the merit of the lawsuit. You simply hand the whole ordeal over to the insurance company. However, no policy covers every event; and every policy varies. You must take a look at your operation and discuss possible exposures from which you need protection: Do you operate off-site? Serve alcoholic beverages at functions? Sell products that could cause harm? BUSINESS INTERRUPTION (Loss of Income) COVERAGE What happens if your business is shut down? This could happen due to natural catastrophe (flood) or accident (fire). No matter, if you are unable to bring in an income, what happens to your livelihood? Depending on the type of policy you choose and the type of perils the policy covers, if you are unable to conduct business, insurance can pay the income you lose as the result of a loss (catastrophic or accidental). There is also keyman (see this section) coverage to cover key people in your business. (Online Women's Business Center, 7/97) This information came from a WBC online article. *** Any law, statute, regulation or other precedent is subject to change at any time *** Index | Home Contact David Matheny, Esq. for a free consultation. (702) 388-1229 Search for more information on Vegas Law and Las Vegas Lawyers: