The Origin of Modern Insurance

What we think of as Property Casualty Insurance has its roots in marine insurance, Lloyd’s of London was founded by Edward Lloyd at his coffeehouse on London’s Tower Street in 1688.  The “coffee shop” was popular with sailors, shipowners, and merchants, and Lloyd catered to them with the most up-to-date shipping news.

Here’s a brief video by Lloyd’s on their history:

Lloyds Of London History – 325 years of the world’s oldest insurance company

 

Fun Fact:

Alexander Hamilton was an Insurance Lawyer, and the old Insurance Industry helped the Founding Fathers frame up laws in their new land.  If you’d like more info on the topic Hannah Farber wrote a really fun insightful book on it:

Underwriters of the United States: How Insurance Shaped the American Founding

 

Modern Commercial Insurance safeguards you against a number of potential losses and unforeseen situations like theft, liability, and property damage, and it can help provide coverage in the event of an interruption of business or injured employees or guests.

 

Types of Insurance

1. Professional Liability Insurance
2. Property Insurance
3. Workers Comp Insurance
   1. Provides covered employees with medical and wage replacement (indemnity)
   2. Security or protection against a loss or other financial burden.
4. General Liability
5. Equipment Breakdown / Business Interruption
6. Cyber Insurance (Tech E&O as well)
7. Directors and Officers (D&O)
8. Employee Practices and Liability Insurance (EPLI)
9. Product Liability
10. Earthquake and Flood (“Acts of God,” water outside the house)
11. Spoilage Insurance (restaurants), Crop Insurance (farmers) and More

 

Signs You Need Business Insurance Soon

1)You Have A Business Website – Advertising Injury

1. 1. The Supreme Court has held that a person may sue a website for giving out false or inaccurate personal information only if the person can show that they suffered a concrete, actual or imminent injury as a result of the publication of the information.
   2. If someone has issues with your website or steals content GL may help cover you.
      1. You would have to prove that you lost income.

2) You Have Someone Work for You – EPLI and WC

1. 1. Employment practices liability insurance, known in the trade as EPL insurance or EPLI, provides coverage to employers against claims made by employees alleging: Discrimination (based on sex, race, age or disability, for example) wrongful termination.
   2. Or if an employee has an accident on the job or something harms them while working for you Workers Comp would help cover their medical needs.

3) You Keep Confidential Data or Do Tech Related Work – Tech E&O and Cyber

1. 1. Cyber covers your data and breaches (1at person), Tech E&O covers the work you do or how your systems (3rd person)
   2. Be sure to look for “Social Engineering” coverage, and I’d recommend a true standalone policy as opposed to just a Cyber Rider.
      1. True Cyber policies will help in the time of crisis, and won’t be a small reimbursement.

4) You Have Regular Visitors To Your Business – GL + Property (BPP)

1. 1. General Liability is referred to as “slip and fall” coverage, and will protect you if somebody’s injured or their property is damaged.
   2. Business Personal Property protects your business’s belongings, and it’s not automatically included in General Liability.

5) Your Vehicle – Business Use, Business Auto & Hired / Non-Owned Auto

1. 1. You want to make sure you have a Commercial Auto policy if the vehicle is in the company’s name, “Business Use” is a good idea if you use your own car.  Hired and Nonowned Auto is a great addition to GL too.
   2. *Hired and Non-owned Auto is typically a General Liability RIDER.  It should help if employees are driving their car for work, if there’s an issue with an Uber or rental car too.

6) Water Backup (an add-on to your GL)

1. 1. Water backup insurance provides coverage for damage to your property caused by a clogged sewer line, failed sump pump and backed-up drains. It also covers mold damage to your home caused by water or sewer backup.
   2. Your Insurance typically covers water from inside the house, but water backup and flood can help cover it if it comes from outside.
   3. Water backup is a good coverage for your home too!

 

What are some surprising types of coverage small businesses need?

Electricians should carry product liability insurance, it protects electricians from claims due to faulty materials used on a job.  Liquor Liability is a coverage restaurant serving alcohol should consider, it protects from incidents involving alcohol if the restaurant sells alcohol.  Laudrymats can often be open to the public at odd hours, General Liability protects both the business owner and customers from property damage and bodily injury from third-party claimants (customers in the laundromat).

 

Insurance has its obvious point and use cases, be sure to ask your agent what’s special about your risk, situation, and vertical too.  If they don’t have an answer you may want to look for a specialist in your group or vertical.

 

-Brett Fulmer

linkedin.com/in/brokerbrett