Insurance is a contract that transfers financial risk from a business or individual to an insurer, in exchange for a premium. Understanding how it works — and what your policy actually covers — is the foundation of every coverage decision.
Insurance is a legal agreement between a policyholder and an insurance company. The policyholder pays a premium — a set amount on a regular schedule — and in return the insurer agrees to pay for specific financial losses defined in the policy. If a covered event occurs (a fire, a lawsuit, an injury on the premises), the insurer pays the policyholder or a third party up to the limits specified in the policy, minus any deductible.
The core function of insurance is risk transfer. You give up a small, predictable cost (the premium) to protect against a large, unpredictable loss (a covered claim). The insurer pools premiums from many policyholders to pay the claims of the few who experience losses in any given period.
General liability (GL) insurance covers third-party claims of bodily injury, property damage, and personal and advertising injury occurring during business operations. It is the most fundamental coverage for nearly every business, and is typically required by commercial leases, project contracts, and vendor agreements. The standard GL form is the ACORD 25 certificate.
Commercial property insurance covers physical assets — buildings, equipment, inventory, and improvements — against perils such as fire, wind, vandalism, and theft. It typically does not cover flood or earthquake, which require separate policies.
Workers' compensation covers medical expenses and lost wages for employees who are injured or become ill as a result of their work. In New York, workers' compensation is mandatory for virtually all employers with employees — including part-time workers and certain contractors. Penalties for non-compliance are significant.
Professional liability insurance covers claims arising from errors, omissions, or negligent acts in professional services. It is essential for consultants, architects, engineers, accountants, attorneys, insurance brokers, and others whose services can create financial harm to clients if performed incorrectly.
Commercial auto coverage applies to vehicles used in business operations. Personal auto policies typically exclude business use; a commercial auto policy covers the liability and physical damage exposures of company-owned or regularly used business vehicles.
An umbrella policy provides additional liability limits above the underlying GL, commercial auto, and employers' liability policies. It activates when a claim exhausts the primary policy limits, providing a higher combined coverage ceiling at relatively low cost per dollar of limit.
Cyber insurance covers costs arising from data breaches, ransomware attacks, and other cyber incidents — including notification costs, credit monitoring for affected individuals, regulatory defense, and business interruption. As cyber incidents have grown across all business sizes, this coverage has become a near-standard requirement for commercial clients.
A commercial insurance policy consists of a declarations page (the summary of who is insured, what is covered, and for how much), a coverage form (the detailed terms and conditions), any endorsements that modify the standard form, and exclusions. Reading the declarations page tells you the basics; understanding the coverage form tells you what is actually covered when something goes wrong.
Most commercial policies are issued on a one-year term and renewed annually. At renewal, the insurer reviews claims history, exposure changes, and market conditions before offering a new price and terms.
A licensed insurance broker represents the policyholder — not the insurer. A broker's role is to assess your coverage needs, shop the market for appropriate policies, negotiate terms and pricing with carriers, and manage the ongoing servicing of your program. Unlike a captive agent who represents one company, a broker has access to multiple carriers and can place coverage in both the standard (admitted) market and, when needed, the surplus lines market for harder-to-place risks.
Clermont Global handles COIs, ACORDs, endorsements, and renewals for brokers across New York — so you focus on clients, not paperwork.
