Insurance Handbook - Alaska Department of Community and ...

Protection Against Flood Damage
Property insurance policies usually exclude coverage for flood damage.
Businesses should find out from their local government office or commercial
bank whether their business is located in a flood zone and whether their location
has been flooded in the past. Flood insurance is available through the federal
government’s National Flood Insurance Program (www.FloodSmart.gov),
which is serviced by private carriers, and from a few specialty insurers.
Protection Against Earthquake Damage
Coverage for earthquake damage is excluded in most property insurance policies,
including businessowners package policies. Businesses in an earthquakeprone
area will need a special earthquake insurance policy or commercial property
earthquake endorsement.
Protection Against Terrorist Attack Losses
Under the Terrorism Risk Insurance Act of 2002 and its extensions, only businesses
that purchase optional terrorism coverage are covered for losses arising
from terrorist acts. The exception is workers compensation, which covers workrelated
injuries and deaths including those due to acts of terrorism.
2. Liability Insurance
Any enterprise can be sued. Customers may claim that the business caused them
harm as the result of, for example, a defective product, an error in a service or
disregard for another person’s property. Or a claimant may allege that the business
created a hazardous environment. Liability insurance pays damages for
which the business is found liable, up to the policy limits, as well as attorneys’
fees and other legal defense expenses. It also pays the medical bills of any people
injured by, or on the premises of, the business.
A Commercial General Liability (CGL) insurance policy is the first line of
defense against many common claims. CGL policies cover claims in four basic
categories of business liability:
• Bodily injury
• Property damage
• Personal injury (including slander or libel)
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Business Insurance
• Advertising injury (damage from slander or false advertising)
In addition to covering claims listed above, CGL policies also cover the cost of
defending or settling claims. General liability insurance policies always state the
maximum amount that the insurer will pay during the policy period.
I.I.I. Insurance Handbook www.iii.org/insurancehandbook 11