Whether you’re starting a business, thinking of purchasing a new home, or want to make sure that the valuable assets you’ve acquired over the years are protected, there’s a good chance you’ve thought about getting insurance coverage, or adding more benefits to your existing insurance policy.
Specialty insurance can be beneficial in a number of ways, but before you spending your money on purchasing a policy, here are a few things you should know.
What Is Specialty Insurance?
The market for specialty insurance lines was created to cover unusual or complex risks that you may encounter when running your business or maintaining your home. The individuals who need this type of insurance are usually considered high-risk, and insurers who offer this type of coverage have extensive experience in rating and underwriting insurance for various causes. If you think you may need specialty insurance, you’ll need to work with a broker who has a wealth of experience, and you’ll need to do some research to ensure the broker has done considerable market research. This will increase the chances that you’re covered at the right times and for the right reasons.
There are two main types of products that are covered under specialty insurance: difficult or unusual insurance and high risk accounts. An example of an unusual insurance matter would be professional liability for a company trustee. An example of a high risk insurance account would be coverage for an explosives manufacturer. Professional liability falls under the specialty insurance umbrella because the rating, underwriting and claims require extensive expertise. An explosives manufacturer would benefit from this type of insurance because the products that manufacturer creates are unique and could be harmful if used incorrectly.
Insurance is issues based on admitted or licensed basis or a surplus or non-admitted basis. It is difficult to estimate the size of the market, but it is estimated that the market is worth $50 million in premium volume.
If you’re purchasing liability insurance for your business, there are two types you should know about: professional liability and general liability. Both of these coverage types are essential if you want to protect your company from financial loss.
General liability will keep your business protected if your company is responsible for causing physical or property damage to others. You also need this insurance if you are legally required to pay for damages. Liability for physical injury can occur when injury or bodily harm is inflicted by a third party. Property damage liability can occur when a third party causes indirect or direct damage to someone else’s property.
If you’re getting insurance for business purposes, you should know that professional liability insurance is put in place for the sole purpose of protecting you should claims arise related to your business products or the services you provide to customers. You can typically receive coverage for stand-alone policies, and your coverage will include the legal or defense costs that are accrued when a customer files a claim against you. Remember that coverage is not provided for dishonest or intentional acts committed by your company.