1.1 The risks your business faces

Every business, regardless of its size or industry, is exposed to risks that can affect its operations, finances, and reputation.

Property Risks (Damage to your assets)

Liability Risks (Damage to third parties)

Financial and Operational Risks

Management Risks

1.2 The cost of being unprotected

The statistics are clear: many companies that suffer a major loss without adequate insurance do not survive.

Impacts of an uninsured loss:

• Asset loss — Rebuilding from scratch with your own capital
• Revenue loss — Months without billing while you recover
• Lawsuits — Compensation payments that drain your reserves
• Customer loss — They go to competitors while you are paralyzed
• Reputational damage — Hard to quantify, but real
• Bankruptcy — The worst-case scenario everyone wants to avoid

2.1 Sum Insured — The correct value

The sum insured is the maximum amount the insurance will pay. It should reflect the actual value of what you are insuring.

For physical assets:

For loss of profits:

• Calculate annual gross revenue or contribution margin
• Consider the indemnity period (maximum coverage time)

2.2 Business Deductibles

Deductibles in corporate insurance tend to be higher than in personal insurance. This reflects that businesses can absorb small losses and allows for more competitive premiums.

Types of deductible:

2.3 Common Exclusions in Business Insurance

Typical exclusions you should know:

• Intentional damage or fraud
• Normal wear and tear, gradual deterioration, lack of maintenance
• War, terrorism, nuclear radiation (may be covered separately)
• Confiscation by authorities
• Fines and penalties
• Pre-existing or known damages before purchasing
• Undeclared activities or activities outside the business scope
• Gradual pollution (different from sudden pollution)

2.4 Policy Conditions

Business policies include conditions that you must meet to keep coverage in force:

• Security measures: Alarms, fire extinguishers, security as declared
• Change notification: Report modifications in operations
• Maintenance: Keep equipment and properties in good condition
• Loss notification: Report within established deadlines
• Cooperation: Collaborate in investigations and audits

3.1 Fire and Allied Lines Insurance

Fire insurance is the foundation of business property protection.

Basic coverages:

• Fire and lightning
• Explosion
• Impact by vehicles and aircraft
• Smoke
• Water damage (pipes, tanks)
• Vandalism and malicious damage

Important extensions:

Insurable assets:

• Owned buildings — Structure, fixed installations
• Contents — Furniture, office equipment, fixtures
• Machinery and equipment — Production equipment, technology
• Inventory — Raw materials, work-in-progress, finished goods
• Leasehold improvements — Investments in leased premises

3.2 Commercial Theft Insurance

Protects against losses from theft of company assets.

Types of coverage:

Typical conditions:

• Minimum security measures (locks, alarms, security guards)
• Evidence of violence or forced entry
• Mandatory police report
• Updated inventories

3.3 Electronic Equipment Insurance

Specialized protection for technology equipment: computers, servers, communication equipment, control systems.

Coverages:

• Accidental physical damage
• Damage from power fluctuation (voltage spikes)
• Short circuit
• Fire, theft, vandalism
• Water damage
• Accidental drop

Useful extensions:

• External data carriers — Disks, memory drives
• Increased cost of operation — Extra expenses while equipment is repaired
• Software — Cost of reinstalling programs

3.4 Machinery and Equipment Insurance

For companies with production equipment, heavy machinery, or specialized equipment.

Typical coverages:

• Mechanical or electrical breakdown
• Manufacturing defects (after warranty period)
• Operator errors
• Damage during maintenance
• Falling objects
• Accidental physical damage

Difference from fire insurance:

Fire insurance covers damage from external causes (fire, water, impact).
Machinery insurance covers damage from internal causes (breakdown, defect, operation).

3.5 Cargo Transit Insurance

Protects goods while they are being transported from one place to another.

Types by mode:

Coverages:

• Physical damage during transport
• Theft and robbery
• Transport vehicle accidents
• General average (in maritime)

Important:

• Per-trip policy: For occasional shipments
• Open/floating policy: For companies with frequent shipments

4.1 What is it and why is it critical?

Business Interruption insurance (also called Loss of Profits or Consequential Loss) covers the financial losses when your company cannot operate due to a covered loss.

Property insurance protects your ASSETS.
Interruption insurance protects your REVENUE.

4.2 What does it cover?

Gross profit or contribution margin:

What you would have earned if the loss had not occurred.

Continuing fixed expenses:

• Payroll
• Rent
• Utilities
• Loan payments
• Other expenses that continue even if you do not operate

Extra expenses:

Additional costs to minimize the loss:

• Temporary premises rental
• Outsourcing production
• Overtime to recover

4.3 Key concepts

Indemnity period:

The maximum time the insurance will pay. Typically 6, 12, or 18 months.

Waiting period (time deductible):

The first days of interruption that you absorb. Typically 48-72 hours or more.

Precedent damage:

The interruption must be caused by a loss covered under your property policy. If the fire was not covered, the interruption is not covered either.

4.4 Important extensions

5.1 General Liability (GL)

Covers damages that your company causes to third parties in the course of its operations.

Covered damages:

• Bodily injury: Physical injuries to third parties
• Property damage: Damage to third-party property
• Consequential losses: Economic losses resulting from the damage

Examples:

• Customer slips on wet floor in your store
• Maintenance worker damages client's property
• Your premises' sign falls and damages a parked vehicle
• Fire in your premises spreads to a neighbor

Additional coverages:

• Legal defense costs
• Court bonds
• Immediate medical expenses (without determining liability)

5.2 Products Liability

Covers damages caused by products that your company manufactures, imports, distributes, or sells.

Covered scenarios:

• Defective product causes injury to a consumer
• Food contamination
• Design flaw causes an accident
• Inadequate instructions result in harmful misuse

Important:

• Covers damage to third parties, not the product itself
• Includes product recall costs in some policies
• Territorial scope: can extend to exported products

5.3 Professional Liability (Errors and Omissions)

Covers claims for errors, omissions, or negligence in professional services.

Typical professions:

• Doctors, lawyers, accountants
• Architects, engineers
• Consultants, advisors
• Insurance agents, stockbrokers
• Technology companies (software errors)

What it covers:

• Professional negligence
• Errors in professional work
• Omissions in services
• Breach of professional duties

5.4 Employers' Liability

Covers employee claims for work-related injuries or illnesses, beyond what the mandatory Workers' Compensation insurance covers.

Scenarios:

• Employee sues for unsafe conditions
• Workplace accident results in a civil lawsuit
• Occupational disease from substance exposure
• Employee death and family lawsuit

Relationship with Workers' Compensation:

Workers' Compensation (ARL/ARS) covers legally mandated benefits. Employers' Liability covers additional claims that exceed those benefits.

5.5 Directors and Officers Liability (D&O)

Protects directors, executives, and the company against lawsuits for management decisions.

Who can sue:

• Shareholders (for investment losses)
• Employees (for employment practices)
• Regulators (for non-compliance)
• Creditors (especially in bankruptcy)
• Competitors (for anti-competitive practices)

What it covers:

• Legal defense costs
• Compensation and settlements
• Regulatory investigations
• Insurable fines and penalties

Coverages:

6.1 Fidelity Insurance (3D / Crime)

Protects against losses caused by dishonest acts of employees.

Typical coverages:

Difference from commercial theft:

• Commercial theft: External third parties who break in to steal
• Fidelity: Internal employees who commit fraud

6.2 Cyber Crime Insurance

Protects against financial losses from cyberattacks.

Coverages:

• Cyber extortion: Ransomware payments (when legal)
• Fraudulent transfer: Electronically stolen funds
• Social engineering fraud: Scams that trick employees
• Systems interruption: Revenue loss from system downtime
• Response costs: Forensic investigation, notification, public relations
• Data liability: Lawsuits for information breaches

6.3 Bonds

Bonds are not traditional insurance, but insurance brokers also manage them.

Common types:

7.1 Fleet Vehicle Insurance

For companies with multiple vehicles: trucks, delivery vehicles, executive fleets, rolling machinery.

Advantages vs. individual policies:

• Simplified administration: One policy, one expiration
• Better conditions: Volume discounts
• Flexibility: Add/remove vehicles easily
• Shared deductibles: Possibility of annual aggregate deductible

Coverages:

• Liability (mandatory)
• Physical damage (collision, rollover, theft)
• Natural phenomena
• Accessories and special equipment
• Cargo in transit
• Cargo liability

Typical requirements:

• Minimum number of vehicles (generally 5-10)
• Information for each unit
• Driver registry
• Claims history

7.2 Fleet Claims Management

The loss ratio (relationship between claims and premium) determines your renewal conditions.

Important metrics:

Strategies to control claims:

• Driver training
• Vehicle use policies
• Preventive maintenance
• Technology (GPS, cameras, telematics)
• Appropriate deductibles for minor claims

8.1 Protocol after a loss

Step 1: Protect and mitigate

• Ensure safety of people
• Take measures to prevent further damage
• Do not make changes that hinder assessment (except for safety)

Step 2: Document thoroughly

• Photos and videos of all damage
• Preserve physical evidence
• Record date, time, circumstances
• Identify witnesses
• Keep damaged parts

Step 3: Notify immediately

• Insurer and broker within 24-48 hours
• In writing (email with delivery confirmation)
• Include preliminary description and photos

Step 4: Police report (if applicable)

Mandatory in cases of:

• Theft
• Vandalism
• Traffic accidents involving third parties
• Any criminal act

Step 5: Prepare supporting documentation

• Invoices for damaged assets
• Inventories
• Financial statements (for business interruption)
• Repair estimates
• Affected contracts

8.2 The business adjuster

In commercial losses, the adjuster plays a crucial role.

Typical process:

1. Initial inspection: Visit to the premises
2. Documentation request: List of required documents
3. Analysis: Review of policy, cause of loss, amount of damage
4. Preliminary report: First estimate
5. Negotiation: Discussion of amounts
6. Final report: Recommendation to the insurer

Your role:

• Provide complete access
• Supply all requested documentation
• Respond honestly
• Constructively question if you disagree
• Involve your broker in important meetings

8.3 Timelines and expectations

Factors that accelerate:

• Complete documentation from the start
• Proactive cooperation
• Broker involved and following up
• Clear communication in writing

Factors that delay:

• Incomplete documentation
• Valuation discrepancies
• Complex investigations
• Coverage disputes

9.1 The annual renewal cycle

90 days before expiration:

• Review current program with your broker
• Identify changes in your operations
• Update insured values
• Evaluate program performance (were claims denied? adequate service?)

60 days before:

• Your broker negotiates with insurers
• Compare options and conditions
• Evaluate alternatives if there are significant changes

30 days before:

• Define final program
• Confirm conditions
• Process renewal

9.2 Information to update annually

9.3 Optimization strategies

Deductible analysis:

• Higher deductibles = lower premiums
• But make sure you have liquidity to cover them

Limits analysis:

• Are current limits sufficient?
• Are you paying for limits you do not need?

Consolidation:

• Combining coverages with one insurer can provide better conditions
• But diversifying reduces counterparty risk

Multi-year programs:

• Some insurers offer fixed rates for 2-3 years
• Provides budget stability

10.1 The role of the broker in business

At the corporate level, your broker is more than an insurance salesperson. They are a risk advisor.

Key functions:

10.2 Information your broker needs

To advise you well, we need to know your business:

About your operations:

• Primary and secondary activities
• Locations (owned, leased, field operations)
• Number of employees and payroll
• Annual revenue
• Key customers and suppliers
• Important contracts

About your assets:

• Property inventory (buildings, premises)
• List of equipment and machinery
• Vehicles
• Typical inventories

About your history:

• Claims from the last 3-5 years
• Current policies (for gap analysis)

10.3 Effective communication

Keep your broker informed of:

• New acquisitions (properties, equipment, companies)
• New important contracts
• Changes in operations
• Expansions or contractions
• Losses, even minor ones
• Significant near-misses

Periodic reviews:

• Quarterly: Follow-up call
• Semi-annual: Program status review
• Annual: Complete pre-renewal analysis

11.1 Your rights

As a business policyholder, you have the right to:

• Clear and complete information about coverages and exclusions
• Professional and objective advice
• Efficient claims management
• Confidentiality of your information
• Access to your policy documents
• Explanation of any denial

11.2 Your responsibilities

In return, your responsibility is:

• Provide truthful and complete information
• Declare all known risks
• Comply with policy conditions
• Pay premiums on time
• Notify material changes
• Report losses promptly
• Take reasonable measures to prevent and mitigate damage
• Cooperate in investigations

The principle of utmost good faith

In business insurance, the principle of uberrimae fidei (utmost good faith) is even stricter. Omission or misrepresentation of information can result in policy cancellation, even retroactively.

12.1 Is your business well protected?

Review each point to evaluate your current insurance program:

12.2 Questions for your next meeting with your broker

1. Do my insured values reflect the current reality?
2. Do I have coverage gaps I have not identified?
3. Are my liability limits sufficient given my size and exposure?
4. Am I paying for coverages I do not need?
5. How does my program compare to similar companies?
6. What can I do to improve my conditions at the next renewal?
7. What emerging risks should I consider?

"Behind every policy, there is a person who knows your business."

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