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Commercial Insurance in Georgia

Commercial (or business) insurance provides coverage for employers, employees, business owners, and businesses. In Georgia, business insurance provides coverage to small businesses and large corporations against financial losses resulting from property damage, litigation, and claims due to third parties property damages and injuries. With nearly 250 thousand establishments, over 4.1 million jobs, and 34 Fortune 1000 companies in 2020, Georgia ranks 9th by states with the most Fortune 1,000 companies (largest companies by revenue). The low costs of doing business in the state have made it a haven for business owners, hence the necessity for commercial insurance policies. Business insurance, like other types of insurance in Georgia, is regulated by the Office of the Commissioner of Insurance and Fire Safety (OCI).

In Georgia, commercial insurance companies offer multiple types of business insurance with different levels of protection. However, the main goal of commercial insurance in Georgia is to protect against financial losses and reputational damage to a business. Individuals and business owner's in need of commercial insurance coverage should contact a knowledgeable Georgia-licensed commercial insurance agent for advice and information on how to protect your business.

Why Do we Need Commercial Insurance?

Commercial insurance needs vary between each business. The largest job-creating sectors in Georgia, accounting for over 1.1 million employees are:

  • Restaurant and Food Services

  • Education System

  • Construction

  • Health Care & Social Assistance

We need commercial insurance to protect the business from financial ruin and comply with state laws. Among many others, businesses in Georgia need commercial insurance policies for the following reasons:

  • To protect your business against third-party bodily injuries within the business premises or due to actions or inactions of the business owners or their employees. Data from the U.S. Bureau Of Labor Statistics showed that Georgia accounted for 4.1% of the national average (4,764) of fatal workplace-related injuries in 2020, with 193 deaths. The private transportation, warehousing, and construction industries made up 39.4% of the fatalities. Commercial insurance is needed to mitigate the financial costs to businesses resulting from medical treatments and litigation costs

  • To comply with state regulations. Georgia law requires business owners to have certain commercial insurance types. For instance, any business operating in the state with vehicles that drive on the state highways must have commercial auto liability insurance satisfying the 25/50/25 minimum limits. Businesses registering new vehicles must attach proof of insurance while completing the MV-1 Motor Vehicle Title/Tag Application form. In addition, businesses with three or more employees must have workers’ compensation insurance to protect their employees against wages lost due to illnesses and injuries

  • To protect against liability claims in the course of business operations. For instance, as a business owner, you need product liability insurance for protection against damages/harm to others by your product

  • To insure business properties against damages. Georgia is vulnerable to natural disasters like storms, floods, wildfires, and hurricanes. Commercial insurance can also protect against human-induced disasters that may lead to property damages. Without commercial insurance, businesses are liable to out-of-pocket payments for repairs and replacements of damaged business properties. Available data shows that in Georgia, damages to properties from severe wind storms amounted to $6.98 billion between 1980 and 2020, while those for drought, and wildfire were $6.79b, and $248.6m, respectively within the same period.

In addition, commercial insurance policies in Georgia protect businesses that are not within specific trade categories. For instance, commercial coverages can combine business policies with the following:

  • Directors and officers insurance

  • Keyman policies

  • Commercial legal expense coverage

Commercial insurance plans are vital to businesses as long as they provide sufficient protection against business risks. Before you buy commercial insurance in Georgia, discuss your coverage options with a commercial insurance industry agent who has access to multiple commercial insurance products. An experienced state-licensed agent can assess the business insurance needs and recommend the right coverage options and policy limits, from which to choose.

How Does Commercial Insurance Work in Georgia?

In Georgia, an insured business pays a monthly or yearly premium to an insurance company for protection against financial losses due to claims against the business, owner, or employees. Commercial insurance also provides protection against damages to business properties or assets. Georgia law requires business owners to have insurance coverage for certain risks. For example, it is mandatory for a business to have auto liability insurance and workers’ compensation insurance (once it has three or more workers). Businesses in Georgia pay premiums to insurance companies for coverage. A business is required to pay a deductible when they make a claim.

The premium is a monthly or yearly payment the business makes to the insurance company for protection against possible risks. The premium is the coverage cost. A deductible is a portion of the loss an insured business must pay out-of-pocket each time it files a claim with its insurer before the insurance company steps in.

In commercial insurance, the deductible can be a percentage, a flat dollar-amount, or a period of wait-time.

  • Percentage deductible: If a commercial building has $1,000,000 in sinkhole coverage with a 3% deductible, and it suffers sinkhole damage in the amount of $100,000 - the insurer will pay $70,000, while the insured business covers the remaining $30,000.

$1,000,000 x 0.03 (3%) = $30,000 deductible

$100,000 claim - $30,000 deductible = $70,000 claim

  • Flat (Straight) Dollar-Amount deductible: A more common type of a deductible is where the amount to be deducted is named in the policy. For example, if a commercial vehicle is stolen, the insured company will receive the claim minus the agreed upon amount of deductible (typically under $3,000).

  • Waiting Period deductible: This type of a deductible is typically applied to coverages where the business uses its own funds to pay during the initial period of time after a covered loss. The best example is Business Interruption coverage, which provides the business with missing income if it cannot operate in its usual manner after a covered loss - let’s say a restaurant gets flooded and must close to make the repairs.

If the restaurant has business interruption insurance with a 48 hour waiting period, the insurer will step in and cover their portion only after the insured business uses its own funds for two full days to cover the everyday business expenses and payroll. (Note: The average waiting period for commercial insurance in Georgia is 72 hours)

  • No deductible: Liability auto insurance in Georgia does not have a deductible, so if an insured commercial vehicle causes $500,000 in bodily injury and property damage, the insurer will pay out the claim in full to the injured/damaged party, up to the policy limits.

According to the Federal Motor Carrier Safety Administration (FMCSA), the average cost of a commercial truck crash starts from around $100,000 for a straight truck with no trailer crash, without injuries, escalating to nearly $7 million, if the commercial truck causes death.

If an insured event happens, the insured business is required to file a claim following standard rules. As a business owner in Georgia, if you need help filing a claim, contact a Georgia-licensed commercial insurance agent for guidance.

What is Commercial Insurance in Georgia

In Georgia, commercial insurance is an insurance product that protects businesses against perils they may encounter during their business operations. Commercial insurance offers different types of coverage for varying adversities a business may encounter while conducting business operations. In addition to the 24 property and casualty insurance companies domiciled in the state, multiple other out-of-state insurers are licensed to offer their products to Georgia’s residents.

Each type of commercial insurance meets different needs. For example, commercial property insurance protects business property damages. Data from the National Association of Insurance Commissioners (NAICO) showed that in 2018, insurance companies in Georgia wrote $21.5 billion direct premiums for property and casualty insurance, a 3.18% rise compared to the previous year with 19.9 billion. The increase in Georgia commercial P&C premium was in line with a nationwide rise of 5.56% over the same period, buttressing the increasing demand for commercial P&C insurance coverage. In 2020, businesses in Georgia paid nearly $10 billion in premiums.

Most Commonly Purchased Types of P&C Commercial Insurance Coverages in Georgia:

Type of Commercial Coverage Commercial Coverage % of all Commercial P&C in GA
Commercial Liability General Liability 22%
Workers Compensation Workers Comp 17%
Commercial Auto Liability 14%
Commercial Property Commercial Multiple Peril (CMP) 13%
Commercial Property Fire + Allied Lines 8%
Commercial Transportation Inland Marine 3%
Commercial Liability Medical Professional Liability 3%
Commercial Auto Collision 3%
Private Mortgage Insurance Mortgage Guarantee Insurance 2%
Farm Insurance Crop: Multi peril + private crop 2%
Commercial Transportation Ocean Marine 1%

What are the Types of Commercial Insurance in Georgia?

Commercial insurance categories depend on the type of coverage they offer. In Georgia, common commercial insurance types a business may purchase include:

  • Workers’ compensation insurance

  • Commercial property insurance

  • Commercial liability insurance

  • Commercial life insurance

  • Commercial health insurance

COMMERCIAL PROPERTY Insurance in Georgia

Commercial property insurance in Georgia typically protects business property from damage, destruction, or theft. Business owners can bundle commercial property insurance with other types of commercial policies for additional coverage. For instance, a business owner can combine commercial building insurance with commercial auto insurance in one package.

Commercial property insurance protects:

  • business buildings and their contents,

  • commercial auto protects any business-owned or operated commercial vehicle

  • property-in-transit,

  • inventory and equipment,

  • business interruption, and

  • loss of business income due to damage to business properties.

When looking to buy commercial property insurance in Georgia, seek advice from a state-licensed commercial property insurance agent. A knowledgeable agent can assess your business needs and suggest the best commercial property insurance coverage options that meet those needs.


Commercial liability insurance in Georgia is a business insurance plan that protects a business from claims that may result from third-party injuries and property damages.

Four main groups of commercial liability insurance in Georgia:

  • Commercial General Liability - This covers the following:

  • Injuries to employees, customers, and visitors

  • Damages to properties

  • Personal injuries, for example, slanders, and rights violation

  • Copyright violation

  • Defamation claims

  • Commercial Auto Liability - This covers any scenario when the company owned vehicle or an employee driving a non-business owned vehicle causes bodily injury or property damage to some else.

  • Product Liability Insurance - This policy protects against claims resulting from injuries sustained from interacting with the insured company’s product

  • Professional Liability Insurance - This policy protects against claims resulting from actions or inactions of the business, its management, and its employees

Commercial liability insurance is a flexible policy and a business owner can customize it for extra coverage like:

  • Umbrella policy covers liability exposures that are above the liability limit of the standard liability insurance coverages

  • Errors & Omissions (E&O) insurance for protection against professional mistakes

  • Medical malpractice insurance

  • Directors and Officers' insurance

  • Landlord liability insurance

  • Contract liability insurance

  • Cyber liability insurance

  • Employment practice liability insurance

  • Commercial auto liability insurance

  • Specialized liability insurance

According to a report by the SBA Office of Advocacy, Georgia had a total of approximately 1.1 million small businesses with 1.7 million employees in 2021. These figures accounted for 99.6% of all the businesses in Georgia, and 42.8% of the state employees. Without commercial liability insurance, business owners in Georgia may have to pay for costly claims that may result from employees' actions or inactions. Commercial liability insurance helps cut down on financial losses resulting from claims against your business.

In 2020, the top 3 commercial liability coverages comprised almost 40% of all Commercial P&C insurance sold in the state of Georgia:

Type of Commercial Liability Coverage % of all Commercial P&C insurance in GA
General Liability 22%
Auto Liability 14%
Medical Professional Liability 3%

Contact a Georgia-licensed commercial insurance agent for professional advice on liability insurance that will provide optimal coverage for your business before making a choice.

COMMERCIAL HEALTH Insurance in Georgia

Commercial health insurance is non-government-funded health insurance. Unlike government-sponsored health insurance plans available at state and federal health insurance marketplaces, individuals and businesses in Georgia can purchase health insurance from private insurance companies. Commercial health plans offer a range of healthcare coverage.

Typically, there are two types of commercial health plans in Georgia: group and individual health plans. Group health plans are employer-provided plans, while individual health plans are bought by the policyholder, typically on the marketplace. Approximately half of Georgia’s population uses employer-sponsored health care, 31%-33% acquire individual plans, and 18%-19% are uninsured.

In addition, with group health:

  • The employer controls the policy and has the right to make add-ons to coverage

  • Claims can be made through third-party administrators to the insurance companies

  • The insured must be an employee of the business

  • There is no coverage for critical illnesses

  • There are no tax benefits

  • There are no medical exams before underwriting

  • Coverage for pre-existing conditions are mostly done after the paper-work is completed

  • The employer pays part or all of the premiums.

In Georgia, employer-provided group commercial health insurance are of two categories. These are large group and small group commercial health insurance.

Differences between 2 types of commercial health insurance in Georgia:

Parameter LARGE group commercial health insurance SMALL group commercial health insurance
Business Size For businesses with MORE than 50 employees For businesses with LESS than 50 employees
Cost of Coverage Has a lower premium than small group insurance because of a higher number of group members. Also, premiums are negotiated by the business owner. Cost more than large group insurance because of fewer group members. There are no negotiations on the cost of coverage, the premium is set by the insurance company
Essential Health Benefits Does not necessarily have to cover the essential health benefits Must cover the essential health benefits
Medical Loss Ratio (MLR) rule The MLR rule requires large group insurance to spend at least 85% of the premiums collected on healthcare; this improves the quality of healthcare services MLR rule requires insurance companies to spend at least 80% of the premiums they collect for coverage on healthcare

Discuss your commercial health insurance needs with a Georgia-licensed commercial insurance agent knowledgeable in group health insurance. A professional agent with a good experience in group health coverage will have access to multiple insurers that offer such policies at affordable rates.

COMMERCIAL LIFE Insurance in Georgia

Commercial life insurance is common to business holdings. Businesses purchase or offer life insurance to insure the lives of their employees or business partners. For instance, business partners may decide to take out life insurance on each other and if one of them dies, the death benefit may be used to buy out the shares of the insured from the family members.

Businesses in Georgia typically carry life insurance for the following reasons:

  • As an additional employee benefit (fully paid by the employer, partially paid, or just offered at a group discount price)

  • As a form of protection for a partnership business if one of the partners dies

Commercial life insurance has options that may appeal to you as a Georgia-based business owner, and for the best options, speak to a Georgia-licensed commercial life insurance agent. A knowledgeable independent insurance agent has access to different insurance carriers and will find the insurer with the best and most affordable life coverage plans to meet your business needs.

GROUP LIFE Insurance

Group life insurance is a life insurance type that provides coverage for a group of people. Typically, it is a term policy purchased by employers under one contract, to be offered as part of a benefits package. Although usually offered by employers, group life insurance is also available through unions, trade, and membership organizations. Group plans typically expire after the insured leaves the employment location or the organization, through which the life insurance was obtained. That is unless the plan has a transferability option - allowing you to take your Georgia life insurance policy with you after you leave the sponsoring organizaiton.

BUY-SELL Agreements

Buy-sell (also known as business prenup or buyout) agreement in life insurance is a legal contract that outlines how a partner’s share in a business will be disposed of in the event of death or if a partner should leave the company. It is an agreement that anticipates the death of the business owners and tries to prevent a conflict that may ensue by detailing how shares should be disposed of.

A typical buy-sell agreement in Georgia contains the following in the event of death or exit of a partner from a business:
  • The circumstances under which business partners or its owners may dispose of their interest

  • The procedure for interest disposal. For instance, in a partnership business, other partners may be given the first refusal before external interests are considered

  • How much to charge for interest

  • Guidance on how to replace a partner or owner in order for the business to continue operating

Reasons for Buy-Sell agreement
  • To ensure that dependents or relatives of a deceased or exited business partner or owner are fairly compensated

  • To outline ways of disposing of a departed member’s interest

  • To guard against costly and time-wasting litigation

  • To provide job stability for employees and secure the interest of minority owners

  • To outline individual owners’ interests in the business

Types of Buy-Sell agreements

The three categories of buy-sell agreements for different scenarios:

  • Redemption agreement - Allows the business to acquire the interest of a dead or departing owner

  • Cross-purchase agreement - Permits the remaining owners buy out the interest of a dead or departing owner from their beneficiaries

  • Hybrid agreement - Combines the attributes of both the redemption and cross-purchase agreements and allows the business and the owners to buy out the dead or departing member’s interest. With the hybrid agreement, either the non-departing owners or the business has the first refusal before the interest is made available to other interested parties.

In Georgia, redemption and cross-purchase buy-sell agreements may come with added options. For instance, the redemption buy-sell agreements allow the business to take out life insurance on the owners. The death benefits of such policies approximate each owner’s interest and are used by the business to buy out their interest if they die. Also, the cross-purchase agreement allows each owner to take out life insurance on the other owners, and the death benefit of these policies will cover the buy-on price for the particular owner.

If an event triggers a buy-sell agreement, the non-departing owners go through the contract to determine if the buy-out clause is optional or mandatory and decide what is best for the business.

Note: If a buy-out is optional, the decisions taken by the non-departing owners may be influenced by the business’s capital needs and the existing tax laws.

When considering the type of buy-sell agreement that may be suitable for a business, the business owners should seek the services of an attorney and a financial adviser. If the option of buying life insurance for the owners is being considered as part of the buy-sell agreement, contact a Georgia-licensed life insurance agent.

KEY MAN Life Insurance

Key man (key employee or key person) life insurance in Georgia is a type of corporate-owned life insurance (COLI) businesses take out on the lives of individuals considered critical to the business. Companies may take out key man life policies on their owners, top executives, or valuable employees whose demise will critically affect the business.

In small businesses, the key persons in most cases are the business owners, and if key man life insurance is taken out on a key person, the business is usually named as beneficiary. Note that a business is entitled to a death benefit only if the insured dies within the policy’s active period. A key man life insurance policy’s death benefit payout may help a business in the following ways:

  • In hiring and training a replacement for the insured in the event of death

  • Offset losses from delays or cancellation of projects due to the insured’s death

  • Raise funds to buy out the interest of a dead owner

  • Serve as surety for individuals facilitating business loans (the death benefit should equate to the value of such loans)

For further information on how commercial life insurance can protect your business, speak with a knowledgeable Georgia-licensed commercial life insurance agent. A state-licensed commercial life insurance agent can assess the business insurance needs and suggest multiple options of coverage to fit them.

BOP vs. CPP vs. GL

A business owner’s policy (BOP) in Georgia protects business properties and covers general liabilities by bundling different coverage in one package. It provides coverage at a lesser cost to businesses than buying individual policies separately. A commercial package policy (CPP) combines coverage for property damages and liability risks. CPP is similar to a BOP because it also provides coverage that comes with stand-alone policies. However, unlike BOP, CPP is flexible and allows the policy owner to customize coverage to meet specific needs. For instance, with BOP, a business owner may be stuck paying for coverage that is not needed, while CPP flexibility allows a policy to be tailored to specific business needs. General liability insurance (GL) protects a business against bodily injuries and property damage sustained by third parties. GL insurance also covers claims resulting from reputational harm, copyright infringement, and advertising injury.

Discuss your business insurance needs with a Georgia-licensed commercial insurance agent for advice on the type of insurance policy that may be best for your business. An independent state-licensed commercial insurance agent has access to different insurers and will get your business affordable commercial insurance coverage.


A business owner's policy in Georgia is a business insurance policy that provides coverage against property damages and other liabilities. A business owner’s policy covers different types of risks by bundling general liability and property insurance into one package.

In Georgia, BOP is a means for medium-sized and small business owners to have protection against the following:

  • Bodily injuries during normal business operations - For instance, if a customer slips and sustains injuries within the company’s premises due to water from leaky pipes, BOP will help with medical payments

  • Bodily injuries from using the company’s product - BOP covers claims from clients who sustain injuries by using a company’s products. For example, a customer may sue for damages if a company’s body care product leads to allergies or rashes

  • Damage to the business’s properties - BOP covers damage to business property, such as damage or losses that result from a fire

  • Damages to third-party properties - A case scenario is a company operating out of a rented property. Such a business is liable for damages to the property and BOP will pay the costs of repairs to such properties

  • Losses due to business interruption- A BOP protects a business against loss of revenue due to certain perils. For instance, if a business has to shut down due to natural disasters like earthquakes or floods, BOP will cover the lost income during such period

A business owner's policy may include additional coverage to cover certain risks that may not be part of the original coverage. For instance, depending on the business needs, a BOP might allow the addition of crime, flood, and vehicle insurance. Coverage may also extend to individual business situations like losses due to equipment breakdown, forgery, or data theft. Not all businesses are eligible for BOP. in Georgia, the business owners policy is available to small and medium-sized businesses (businesses with less than 500 employees). Additional requirements may be based on the size of the business, location, type of business, and revenue.


A commercial package policy (CPP) is a flexible policy that bundles different commercial insurance coverage into one package to protect against a wide range of commercial risks. Due to its flexibility, CPP allows business owners in Georgia to cover several risks at a lower premium than when carrying separate stand-alone policies. The following elements define a CPP contract:

  • Common Policy Declaration - this defines the contract. It states basic information like:

  • Name of the Insured Business

  • Amount of Coverage

  • Policy term

  • Description of item/item covered

  • Location of item/items covered

  • Common Policy condition - this outlines the insurer’s and the insured’s obligations. It outlines the terms or penalties for policy cancellation, policy changes, premium payments, rights and duty transfer, and books and records examination.

  • Common Policy Declaration Coverage - this determines the flexibility of the CPP and shows what and how coverage can be bundled or combined within the package.

Who Can Buy a Commercial Package Policy?

Generally, insurance companies in Georgia underwrite CPP for small and medium-sized businesses. It is suitable for businesses with low liability coverage needs. For instance, businesses that do not operate extensive facilities and only need coverage for small risks.


Commercial general liability (GL) insurance is a business liability policy that protects an insured business against third-party bodily injuries and property damages. A GL policy may also insure a business against claims that result from reputational harm and advertising injuries. For instance, a GL policy will pay for claims resulting from slander and copyright violations. Depending on the business’s preference, a GL policy can protect within or outside the business premises. Businesses in Georgia spend over $2 billion annually on General Liability coverage.

It is important to note that a GL policy does not cover all business-related risks. For example, General Liability policy in Georgia will not cover:

  • Injuries sustained by employees - This is covered by workers’ compensation insurance

  • Damages to the business’s properties - This is covered by commercial property insurance

  • Professional mistakes - Professional liability and Errors & Omissions (E&O) insurance will pay for this

  • Liquor liability - any Georgia establishment that requires a license to serve and/or sell alcohol, requires a separate “Liquor Liability” (also known as the Dram Shop insurance) with annual coverage limit of at least $1 million.

Liability coverage differs based on the business purposes it serves. Discuss the needs of your business with a Georgia-licensed commercial insurance agent who can help with figuring out the right coverage at the most optimal cost.

How Much Business Insurance Coverage Do I Need?

The amount of business insurance coverage your business needs in Georgia depends on several factors. To determine this, you should carry out a risk analysis to identify all the possible risks to which your business is exposed. You need to examine the company’s assets, and its projects to determine their risk exposure and decide what risks will pose the biggest financial loss.

Your risk analysis takes into consideration:

  • The size of the business

  • The nature of the business

  • Organizational structure

  • Level of business capitalization

  • Business Location

  • Management team

  • Staff experience

  • Knowledge of the business

  • Access to ready cash reserves

A risk analysis will point to the risk exposures that present the most likely danger to the business. To get help with the assessment or after you have identified the top risks, speak with a Georgia-licensed commercial insurance agent. A knowledgeable agent can help narrow down the coverages the business may need, and bundle them together to achieve the most discounts.

Surplus Lines Insurance in Georgia

Commercial surplus line insurance protects companies against some specific risks. It protects businesses against perils that state-licensed commercial insurance companies may consider too risky. Surplus insurance coverage costs more than conventional insurance due to the type of higher-than-normal risk coverage they provide.

Unlike traditional insurance where commercial insurance companies are licensed within the state they serve, businesses in Georgia can buy surplus from out-of-state insurers which are not licensed in Georgia. However, an insurer offering surplus insurance coverage outside its home state must get and maintain an active license from the state where it is domiciled.

Insurance companies offering surplus line insurance in Georgia may not be members of any of the Georgia Guaranty Associations. However, they must abide by Georgia laws on surplus line insurance. These laws spell out the conditions under which non-state-based insurance companies may operate in Georgia.

Surplus line insurance comes with risks for the policyholder. For instance, if the insurer goes bankrupt, the insured loses coverage and the insurance company can not make any payment claim because it does not belong to a guaranty association.

What is an Example of Surplus Lines Insurance?

In Georgia, surplus line insurance offers coverage to high-risk businesses that standard insurance companies shy away from due to the high probability of claims. For example, it can protect:

  • A researcher producing a promising new but untested drug

  • A property developer building homes in areas prone to floods or hurricanes

  • An actor whose movies involve dangerous stunts

  • Individuals who engage in dangerous hobbies, for example, skydiving and motorsports

Surplus line insurance may also provide coverage for Non-governmental organizations (NGOs) delivering food and medical aid to war-torn countries or active sports personalities at risk of injuries or disabilities due to the nature of the sports.

What Purpose Do Surplus Companies Serve in Georgia?

In Georgia, surplus line insurance companies provide coverage for risks that may be considered uninsurable by standard insurers. It protects a business against three different categories of risks, namely:

  • Capacity or catastrophe-prone risks - These include risks of natural disasters like earthquakes, hurricanes, tornadoes, and floods

  • Unique risks - These include product risks that can lead to injuries or death to the consumers, such as stunt bikes and dirt bikes

  • Non-standard risks with individual underwriting factors - These include miscellaneous risks associated with certain jobs. For example, risks associated with cleaning high-rise-buildings by professional window cleaners or driving of food or ice-cream trucks

Surplus line insurance offers creativity and flexibility in coverage by providing groundbreaking policies, unlike standard insurers that must have their underwriting guidelines and policy forms vetted by the state.

Why Would Someone Place their Insurance with a Surplus Lines Broker?

Surplus line insurance is a specialty market accessed through special brokers known as surplus line brokers or wholesalers. To access surplus line coverage, an individual or a business needs to engage the services of a surplus line broker. A Georgia surplus line insurance broker must be licensed to operate in Georgia. You may need to place your insurance with a surplus line broker in Georgia if:

  • You run a business that constantly exposes you, your employees, the public, or the environment to hazards. For instance, if you operate a coal mining or oil drilling business

  • You need coverage that standard insurance cannot offer

  • You need coverage that is beyond those offered by standard insurers.

  • Your business has a high loss ratio and is a non-insurable risk by standard insurance companies

How are Surplus Lines Insurers Regulated in Georgia?

All surplus line insurance companies in Georgia must comply with Article 2 Title 33 Chapter 5 of the State Insurance Code. Although surplus line insurance does not follow standard insurance rules, the state government, through the Georgia Office of Commissioner of Insurance and Fire Safety (OCI), plays the following roles:

  • Licensing surplus line brokers

  • Monitoring the financial health of surplus line insurance companies

  • Determining what surplus line insurance company can operate in the state and keeping a list of those eligible (and ineligible)

  • Oversee the surplus line Insurance Stamping Office for quarterly or annual tax returns

Before filing a complaint against a surplus line insurer, an insured individual or business should ensure that such a claim is eligible. Also, contact the insurance company to resolve the issue. If the attempted complaint resolution fails, forward such complaints to the Consumer Service Division of the OCI in the following ways:

Office of Commissioner of Insurance

Consumer Services

2 Martin Luther Kings Jr Dr. SE

Suite 716 West Tower

Atlanta, GA 30334

What is Specialty Business Insurance?

Specialty business insurance meets the insurance needs of businesses that require unusual coverage. It protects against high-risk events that standard insurance does not cover. In Georgia, specialty business insurance provides coverage to companies that produce high-risk products. For instance, businesses that make gear for scuba diving and skydiving. Also, it is suitable for businesses that always face litigation, such as contractors and construction companies.

There are several types of specialty insurance in Georgia, including:

  • Identity theft insurance - Covers losses due to leakage of personal or financial information that can lead to fraud. It reimburses a business for money spent on fixing financial or credit identities, including litigation costs and phone bills

  • Flood insurance - For protecting businesses located in flood-prone areas, which regular commercial property insurance does not cover

  • Boat insurance - For commercial ventures that are into boat touring business or cruise lines

  • Motorcycle insurance - Usually, auto insurance may not include motorcycle coverage. Motorcycle insurance will protect businesses that commercially operate motorcycles

  • Ocean marine insurance - This protects a business that operates sea vessels that dock or offload on U.S. ports against claims that fall under the Longshoremen’s and Jones Acts. Georgia is home to 2 deepwater ports and 3 inland shipping terminals

  • Travel insurance - this covers losses that result from traveling. For instance, the loss of baggage and medical emergencies during a trip

  • Title insurance - For protection against defects in property title that can lead to financial losses for commercial property businesses.

  • Commercial renters insurance - While most rented and owned commercial property is typically covered by standard property insurance, commercial renters insurance can provide coverage for rented business properties.

  • Cyber liability insurance - Protects the business from losses resulting from cyber-attacks and pays for litigation if the company is under a lawsuit

  • Directors and Officers insurance (D&O) - protects the management team of a company against lawsuits that result from errors in the course of business operations

Before you purchase any specialty business insurance coverage in Georgia, you should do the following:

  • Determine the type of specialty insurance coverage you need and understand how it works

  • Go through the basic information on the policy contract to be sure of what is covered

  • Engage multiple specialty business insurance companies to compare commercial insurance quotes and use the information gathered to negotiate lower rates

  • Make sure you are current on the industry news and information

Seek the help of a Georgia-licensed commercial insurance professional, who can assess the insurance needs of the business and recommend most optimal solutions, to get the right coverage at the most discounted rates.

What is Business Hazard Insurance in Georgia?

Business hazard insurance (business property insurance) protects business properties from losses that result from natural disasters. In Georgia, hazard coverage may also be part of commercial property or homeowner insurance. A business hazard insurance offers protection against:

  • Damages from fire outbreaks

  • Vandalism

  • Power surges

  • Theft

  • Hail, sleet, snow, or ice

  • Explosions

  • Lightening

  • Riots or civil unrest

The most common natural disaster in Georgia is thunderstorms, and they usually lead to lightning, gusty winds, hails, tornadoes, or flash floods. In 2009, Georgia experienced one of its worst floods in recent history. Ten lives were lost with damages to some 20,000 properties and financial losses of over $500m. In March 2012, the state experienced eight tornadoes within three days, which led to over $12m in property damages. Also, on March 14, 2008, the Atlanta metro area was struck by a tornado that caused property damages of over half a billion dollars.

Although grants from federal, state, and local governments fund mitigation projects, they are almost never enough to cover losses due to hazards. Hence, there is a need for business hazard insurance in Georgia to protect against such losses. Hazard coverage may be part of your business owner’s policy (BOP) and will compensate for losses due to hazards.

While shopping for business hazard insurance in Georgia, the following factors determine how much you pay for coverage:

  • Geographical location

  • Land value where the business operates

  • Crime rate

  • Frequency of natural disaster occurrence

Also, consider the monetary value of the policy. For example, does it provide ordinance coverage for unexpected repairs in compliance with recent laws and building codes? In addition, check for flexibility so that you can customize your coverage to meet your business needs. Before buying hazard insurance for your business, speak with a Georgia-licensed commercial insurance agent knowledgeable in business hazard policy to guide you through coverage options.