What is insurance and why do I need it?

Insurance is a contract (policy) that protects you from financial loss. You pay a premium, and in return, the insurer covers certain risks (like accidents, theft, or lawsuits). It helps individuals and businesses manage unexpected expenses and meet legal or contractual requirements.

What types of insurance should I consider?

Common types include: 1. Auto Insurance – for vehicle-related damages. 2. Homeowners/Renters Insurance – for property and liability protection. 3. Health Insurance – for medical expenses. 4. Life Insurance – for income replacement or estate planning. 5. Business Insurance – such as general liability, E&O, workers’ comp. 6. Disability/Long-term Care – for income or care due to illness/injury.

How are premiums determined?

Premiums are based on risk factors like age, location, claims history, coverage limits, and credit score (in some states). For businesses, industry type, revenue, and number of employees also matter.

What’s the difference between a deductible and a premium?

Premium: The amount you pay regularly (monthly, quarterly, annually) for the policy. Deductible: What you pay out-of-pocket before your insurance covers the rest of a claim.

Do I need insurance if I'm healthy or never had a claim?

Yes. Insurance is about protecting against unexpected losses. Health status or luck today doesn’t guarantee you won’t face an accident, illness, or disaster tomorrow.

What does liability insurance cover?

Liability insurance covers legal costs and damages if you're responsible for injuring someone or damaging their property. It's included in auto, home, and business policies.

What’s the difference between term and whole life insurance?

Term Life: Temporary coverage (10–30 years), lower cost, no cash value. Whole Life: Permanent coverage, builds cash value, higher cost.

How can I lower my insurance premiums?

1. Bundle policies (home + auto). 2. Maintain a good credit score. 3. Raise your deductible. 4. Install safety features (alarms, sprinklers, etc.). 5. Stay claims-free (may earn discounts). 6. Shop rates every 1–2 years with an independent agent.

What does my policy not cover?

Intentional damage Wear and tear Flood or earthquake (unless added) Certain business activities under personal policies **Always read your policy or ask your agent to clarify exclusions.**

When should I update my insurance policy?

When the following instances occur: Buying a home or car Getting married/divorced Starting a business or hiring employees Having a child Major renovations Moving **Keeping policies current ensures proper protection.**

What is commercial insurance and why does my business need it?

Commercial insurance protects your business from financial loss due to events like lawsuits, property damage, employee injuries, or data breaches. It’s essential for risk management, legal compliance, client contracts, and peace of mind.

What types of commercial insurance do most businesses need?

Common coverages include: General Liability – protects against third-party bodily injury/property damage. Property Insurance – covers your building, equipment, and inventory. Workers’ Compensation – mandatory in most states for employee injuries. Professional Liability (E&O) – covers errors or negligence in services. Cyber Liability – protects against data breaches and cyberattacks. Business Interruption – covers lost income during closures due to covered events. Commercial Auto – covers vehicles used for business purposes.

Is business insurance legally required?

It depends on your state and industry. Most states require workers’ comp if you have employees. Some client contracts may require liability or E&O insurance. Commercial auto is mandatory if you use vehicles for work.

How are business insurance premiums calculated?

Insurers consider: Industry risk level (e.g., construction vs. consulting) Revenue and payroll Number of employees Claims history Coverage limits and deductibles Business location and property values

hat does general liability insurance cover?

Slip-and-fall injuries on your premises Damage you cause to others’ property Legal defense and settlements for covered claims **It does not cover employee injuries, professional mistakes, or cyber incidents.**

Do I need insurance if I'm a sole proprietor or work from home?

Yes. Even small or home-based businesses face risks. Your homeowners policy won’t cover business-related claims. General liability, professional liability, or a Business Owner’s Policy (BOP) may be appropriate.

What’s a Business Owner’s Policy (BOP)?

A BOP bundles general liability and commercial property insurance into one affordable package. It’s ideal for small to mid-sized businesses and may include optional add-ons like business interruption or cyber coverage.

How can I lower my commercial insurance costs?

1. Bundle policies into a BOP or package 2. Implement safety programs 3. Maintain good claims history 4. Raise your deductibles 5. Work with a broker to shop multiple carriers

What’s not covered by standard business insurance?

Common exclusions include: Intentional acts or fraud Flood and earthquake (unless added) Employee discrimination or harassment (needs EPLI) Cyberattacks (unless cyber insurance is included) Damage to your own work (in construction)

When should I review or update my business insurance?

At least annually, and whenever you: Hire more staff Move, expand, or renovate Buy new equipment or vehicles Offer new products/services Enter into new contracts