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Commercial Insurance Products

As an independent insurance brokerage, our goal is to assist you in developing and maintaining a commercial insurance program, and work as your trusted advisor. As professionals we assess your needs, offer you a complete range of insurance products and provide you with a comprehensive insurance package providing you with exceptional coverages for your distinctive operation.

Our size and independence allows us to access the majority of insurance companies. With all the challenges facing organizations and families today, no one has time to become an insurance expert.

Instead, you need an experienced broker and team who can analyze the various options available, allowing you to make knowledge based decisions. While your focus will be on the success of your business, ours will be on protecting your business, and being there when you need us most.

After experiencing a large claim, with damages over $200,000 to their commercial building, one of our customers said: "We were so happy that there weren't any surprises in the settlement of our claim, and feel that our broker was representing our needs first, rather than the insurance company’s.”

Another one of our customers said: “Relationships of trust and respect are hard to find. This is exactly what my Lundgren and Young broker has provided, which is one less thing for me to worry about".

We are proud of that reputation. We work hard to build a trusted relationship with our customers. We are an organization dedicated to our customers, and strive to make you feel comfortable and confident in our abilities, by providing solid advice, and appropriate coverages at a fair price.
Commercial Property
We can provide you insurance for your Residential, Non-mercantile, Mercantile, Manufacturing and Industrial Buidlings / Condominiums . When you or your commercial occupants have operations that use fire, heat, welding or spray painting inside the building, this presents an increase in the potential for a loss by fire. This usually equates to an increase in premium needed to be paid to your insurance provider. We can help you! At Lundgren and Young Insurance, we have access to a wide variety of insurance companies that provide excellent coverage, offer their own unique rates and take into consideration all aspects of your unique operation.

In addition to building insurance for insured perils such as fire, lightning, explosion, smoke, falling object, riot, wind, hail, vandleism or malicious acts we can offer sewer backup, flood and earthquake insurance.

Equipment and Stock

Equipment includes furniture, fittings, machinery, tools and other appliances found at your business location that are not held for sale. Equipment also includes any tenant's improvements which are alterations or betterments made at your expense to your building or rented space. You can have the equipment covered under an Actual Cash Value or Replacement Cost basis.

Stock is basically your merchandise of every description usual to your business including advertising materials. This can only be covered on an actual cash value basis.

Contractors' Tools and Equipment

From hand held and power tools to backhoes and loaders, your equipment and tools are the heart of your business. Standard commercial insurance will not cover your tools and larger equipment if they are leaving your shop or are used at multiple locations. You'll need to your have mobile property placed on a "floater" coverage. Tool Floater is designed to insure Tools and Equipment (all items usual to your trade or business). A Contractors' Equipment Floater insurance is used to insure moveable equipment and pay for damages to a contactor’s equipment caused by, among others, theft, fire, vandalism, water damage and breakage.

Installation Floater

Usually covers property installed at a work site by a particular contractor or subcontractor. The coverage normally applies while the property is in transit, in temporary storage, and during the installation and testing process.

Equipment Breakdown Coverage / Boiler and Machinery

This coverage protects an organization against any losses that result from a breakdown of heating, refrigeration, air conditioning equipment, pressure vessels, boilers, production machinery, electrical apparatus and/or electronic equipment.

The term Boiler and Machinery insurance is gradually being replaced with terms such as Equipment Breakdown or Mechanical Breakdown coverage. This insurance provides coverage against the sudden and accidental breakdown of boilers, machinery or equipment, including computer systems and telephones/communication systems. Coverage usually includes reimbursement for property damage, expediting expenses (e.g., express transportation charges), and business interruption losses.

Equipment Breakdown Coverage
This coverage protects an organization against any losses that result from a breakdown of heating, refrigeration, air conditioning equipment, pressure vessels, boilers, production machinery, electrical apparatus and/or electronic equipment.

Electrical Systems are found in every business, posing breakdown risks to building owners and tenants alike. Electrical systems are worth between 10 – 15 % of a building’s value so they present a huge loss potential.

Air conditioning and refrigeration systems contain a variety of valuable components that can break down. A compressor alone can be worth $20,000 or more. Many AC units are located on the roof, so a crane or even a helicopter may be needed to remove and replace the unit.

Boiler and Pressure vessels are commonly used for heat, hot water, steam production and processing. Cookers, sterilizers and some cleaning equipment are the other common types of pressure vessels.

Computers, Phone systems, TV satellite systems, retail “Point of Sale” systems, security and fire alarms systems and other types of systems rely on very sensitive electronic technology. Power surges and electrical fluctuations can damage the fragile circuitry in this equipment in seconds.

Mechanical Equipment includes water pumps, ventilation fans, elevators and escalator machinery, motors, engines and many others. Today, a lot of the mechanical equipment (especially computer controlled production machines) contains sophisticated but fragile computer technology.

The term Boiler and Machinery insurance is gradually being replaced with terms such as Equipment Breakdown or Mechanical Breakdown coverage. This insurance provides coverage against the sudden and accidental breakdown of boilers, machinery or equipment, including computer systems and telephones/communication systems. Coverage usually includes reimbursement for property damage, expediting expenses (e.g., express transportation charges), and business interruption losses.

For exact terms, definitions, limitations and extensions, please talk to your broker and refer to your final policy wording
Commercial Auto
Commercial / Business vehicles are any vehicles and trailers that a business or company uses to transport job related materials, goods or equipment.

At Lundgren and Young Insurance, we can provide you coverages for Individual Commercial Automobile, Commercial Fleet and Garage Automobile exposures.

  • Individual Commercial Automobile insurance
    When you use your vehicle for business purposes rather than for personal use, then a form of commercial auto insurance is necessary. Some examples are landscaping trucks, vehicles used in the Oil and Gas field, contractors, delivery vehicles and commercial trailers.

  • Commercial Fleet
    Consists of 5 or more commercially rated vehicles all wrapped up into one policy. No maximum number of units.

  • Garage Automobile policies
    Designed to meet the special needs of operations like dealers, service stations and repair shops.

In addition to providing your commercial vehicles with coverage such as fire, theft, collision and 3rd party liability coverages we have implemented commercial insurance programs specially designed for growing niche areas. We introduced an independent distributor program which offers outstanding coverages and prices for local commodity haulers on a set route. Recently we joined up with an insurance provider to offer a new and exciting Sand and Gravel truck program.

For exact terms, definitions, limitations and extensions, please talk to your broker and refer to your final policy wording
Commercial Liability

What is CGL and why a business needs it

In a nutshell, commercial general liability insurance, or CGL, is coverage that will protect your business in the event that you are sued. It is often used to cover claims against your business for injury or property damage. Typical examples include if a customer is injured at your place of business, or say an employee damages property at a client's site.

Without a commercial general liability insurance policy, you are leaving yourself and your company vulnerable to lawsuits that could have a devastating impact on your business. It is, unfortunately, a necessary cost of doing business because the likelihood of being sued is more common than you might think. It is for this reason that commercial general liability insurance is one of the most popular business insurance products sought after by business owners.

What's covered...?

There are four main types of coverage included in the standard Commercial General Liability (CGL) policy: Bodily Injury and Property Damage Liability, Personal Injury Liability, Medical Payments, and Tenants’ Legal Liability (for those that rent or lease their workspace.) We’ll pick these off one-by-one with what will hopefully be an easy-to-understand explanation.

A. Bodily Injury and Property Damage Liability
Basically, if your company, your product, your work, your employees, or anything else associated with your company causes physical injury to someone like a client, or damages their property or belongings, you could be held legally responsible. If held legally responsible you may be required to pay. It is in cases like these that your coverage will pay for the compensatory damages. Plainly put, compensatory damages are damages meant to compensate. Its purpose is to put things back the way they were (financially) prior to the injury or damage.

B. Personal Injury Liability
The phrase 'personal injury' is confusing because in the insurance world it means one thing, and everywhere else it often means something all-together different. While most people associate ‘personal injury’ with physical injury this is not the case with a CGL policy where it actually means damage (so to speak) of a person’s character, reputation and position in the community as a result of libel (in print) or slander (verbal defamation.) Remember, a liability policy is to protect you if you’re accused of libel or slander, not the other way around.

C. Medical Payments
This part of your CGL policy is interesting, as its purpose is to provide coverage that pays someone’s minor medical expenses from an accident that happens at your company’s premises or as a result of your company’s operations—even though you may never be held legally liable for the accident. In fact, it’s often used as a way to avoid a costly lawsuit.

D. Tenants' Legal Liability (for those who rent or lease their workspace)
Suppose you don't own the space where you’ve set up shop and rent your office, shop or retail space. If you are held legally responsible for causing a fire, explosion, smoke damage, or other damage caused by fire protection (like sprinklers going off) then this coverage will pay the compensatory damages (remember, the intent of compensatory damages is to put things back the way they were.) This applies only to damages of the rented premises – not the property (i.e. product, inventory etc.) that you may personally own.

  • One of your sales people is out on a call at a potential client's store. The owner of this store thinks your product will sell well in their store and is considering placing an order. Unfortunately, in their over-zealous sales pitch your salesperson knocks over a whole display of very expensive figurines valued at over $25,000.
  • You've finally opened the doors to your trendy new lighting and fixture showroom and you've got the table and floor lamps, sconces, ceiling fans and chandeliers that all the city’s interior designers want. Unfortunately, unbeknownst to you, a shopper moved a few floor lamps around while deciding on whether they wanted to buy. In doing so, the lamp’s cord is no longer neatly tucked out of the way, and another shopper, a few hours later, trips and falls over the cord, breaking her ankle.

Professional Liability Insurance

Professional Liability insurance, also known as Errors and Omissions coverage or Professional Indemnity Insurance it is designed to protect professional practitioners against potential negligence claims made by their clients/patients. Professional liability insurance may take on different names depending on the profession.

For example, professional liability insurance in reference to the medical profession may be called Medical Malpractice. Notaries public may take out errors and omissions insurance (E&O). Other potential E&O policyholders include, for example, real estate brokers, appraisers, management consultants and website developers. There are also tailor made E&O policies for technology companies, such as technology consultants, software developers, and other creators of technology. This coverage focuses on the failure to perform, financial loss and error or omission of the products or services sold. Additional coverage for breach of warranty, intellectual property, personal injury, security and cost of contract can be added. Basically, this coverage could benefit any business that provides advice or gives a service. It is also sometimes required under contract by other businesses that are the beneficiaries of the advice or services given.

The primary reason for professional liability insurance is that a typical commercial general liability insurance policy will only respond to a bodily injury, property damage, personal injury or advertising injury claim. The previously mentioned professional services and products can cause claims without causing a bodily injury, property damage, personal injury or advertising injury. Common reasons alleged in making claims on these policies are negligence, misrepresentation, violation of good faith and fair dealing, and inaccurate advice.

For example:
A software product fails to perform properly, it may not cause physical damages, personal or advertising injuries, therefore the general liability policy would not be triggered. It may, however, directly cause financial losses which could potentially be attributed to the software developer's misrepresentation of the product capabilities. Importantly, the coverage may not just cover the financial loss but also provide for the defense costs - even if a legal action turns out to be groundless.

Professional liability insurance policies are generally set up based on a claims-made basis, meaning that the policy only covers claims made during the policy period, claims which may relate to incidents occurring before the coverage was active may not be covered. However these policies will have a retroactive date which can operate to provide cover for claims made during the policy period but which relate to an incident after the retroactive date (where the retroactive date is earlier than the inception date of the policy). It is important to continue your coverage, because cancelling the policy, will in effect, make it as if you never had coverage for any incidents.

Director's and Officers' Liability

Why do Directors’ and Officers’ liability policies exist?

Times have changed and society has become more prone to go to law to settle disputes. Most Directors and Officers on non-profit organizations are volunteering for humanitarian reasons and not receiving any sort of compensation… peace of mind is a must to sustain participation. Directors and Officers do not want to risk their personal financial security from any claims against themselves or their families. Non-profit organizations cannot afford to finance claims and/or lawsuits against themselves or their Directors and Officers.

Other policies leave gaps in coverage: A Commercial General Liability policy excludes coverage for financial loss against the organization and/or its directors and officers for wrongful acts. A Professional Liability policy includes the financial loss but only with respect to professional services rendered. A Directors’ and Officers’ policy is not meant to cover liability for professional services rendered.

Some reasons to carry a Directors’ and Officers’ Liability policy:

  • It prevents serious disruption of management’s time.
  • It provides protection against potential loss of personal assets.
  • It protects corporate assets from the costs of expensive legal proceedings
  • It provides access to claims and legal personnel in this field of expertise.
  • It provides framework for a focused corporate strategy for dealing with claims, allegations and lawsuits.
  • Awareness of Directors and Officers exposures will improve corporate governance (which will in turn help prevent future losses).
  • Retroactive protection against past wrongful acts that have gone unprotected.
  • Premium is paid by the organization, not by the individual Directors and Officers.

Umbrella and Excess Policies

The liability policies purchased by the business may not address the complete liability insurance needs of all business owners.

Some problems include:
  • Every insurer has limits on the amount of insurance it is prepared to write. Requests for increased limits may also be denied when the insurer does not have the ability to write that amount or when it does not want to be exposed to such risk.
  • Although exposures excluded in the basic policy form can often be covered by endorsement, if the excluded exposure is not identified at the time the application is made, or is introduced during the policy period, the insured will be left without coverage at the time of a claim.

An Umbrella Liability Policy can solve these problems by providing the insured with both additional limits and broader policy coverages.

How the Umbrella Policy Works

You probably own some form of general liability insurance to protect you in the event of a lawsuit due to negligence on your part. However, there may be situations where the limits of your Commercial General Liability, Commercial Auto and/or Professional Liability policy may not provide with adequate protection. A commercial umbrella can provide you and your business with additional liability protection.

A commercial umbrella policy will provide liability limits in excess of those on your liability policy(s). This provides you and your business with additional protection in the event of a catastrophic event that results in hundreds of thousands, or even millions of dollars being awarded to plaintiffs in a lawsuit as a result of your negligent act.

Commercial umbrella policies can be a good value because they provide much additional insurance protection for a relatively small premium. This is because umbrellas are considered secondary coverage, meaning that your primary policy's limits must first be exhausted before coverage takes effect.

For exact terms, definitions, limitations and extensions, please talk to your broker and refer to your final policy wording
Business Interruption
Business Interruption Insurance is not intended as a stand-alone policy form. Coverages are normally provided by way of endorsement to the property policy.

The Fundamental aim of all business interruption insurance policies is to insure what the business would have done had the loss not occurred.

Business Interruption Forms insure:

  • Loss of Income (The net profit that is lost because of a partial or total interruption to the business)
  • Necessary continuing operating expenses.

The purpose of business interruption insurance is to cover the loss of financial income which the business will suffer as a result of a reduction in business operations that is a consequence of physical damage loss by an insured peril. Every business interruption policy is based on 2 essential components.

  • Insurable Interest
    In order to have an insurable interest, there must be the prospect of earning business income which would have been earned had the incident not occurred. If insurable interest does not exist, business interruption insurance is not needed.
  • Time Element
    Time is basic in that it must pass before a business can earn income. The time element is key in determining the need for business interruption insurance and is also one of the yardsticks in calculating the insurance coverage required and the amount of recoverable loss. If a company’s operations would be seriously affected by the destruction or damage of its operating assets, including its building facilities, because of the passing time, then business interruption insurance is needed.

Who requires business interruption insurance?

All businesses, both large and small require business interruption insurance.

For example:
  • A business that would lose many of its customers during a severe interruption and, therefore, would be unable to resume normal operations once the property has been repaired. The business would likely lose its customers to its competitors.
  • A business that relies on one supplier for a critical part of its product. If the supplier’s plant were to be shut down by a serious fire, the business depending on that supplier might also be shut down. (Contingent Business Interruption)
  • A manufacturer of a specialized component for a very limited market could be virtually shut down if one of its customers were shut down by a loss. If the manufacturer has only one costumer, and that customer was shut down by a loss, the manufacturer would have no one to sell to and therefore, would be out of business until it could find a new customer or product. (Contingent Business Interruption)
  • An apartment building that is severely damaged by fire and several tenants must move as a result. Most, if not all of the operating expenses and overhead would continue even though the income would be substantially reduced. The owners of the apartment would face a reduced profit or loss.

Profits Form

There are two policy forms generally used to insure loss of income to a business. Each represents a different approach to achieve the same result in the insuring of business interruption losses. There is the Gross Earnings Form and the Profits Form. This portion will focus on the Gross Earnings Form.

The Profits Form provides indemnity from the date of loss until the level of sales reaches the level that the business would have attained had the loss not occurred, subject to the policy limit and the period of indemnity. Due diligence and dispatch to repair, replace or rebuild damaged property is imposed only upon the insured. It requires the insured to do and permit to be done all reasonable things which minimize the loss.

Gross Profit = Net Profit Before Tax + Insured Standing Charges

The Profits form requires that the insured carry insurance to 100% of the possible loss of gross profits. There are no alternatives. Insureds are not required to insure all of the business operating expenses (standing charges) but select only those which they wish to include in the coverage. Standing coverages that are excluded by the policy are:

  • Depreciation of Stock
    Depreciation is a normal business loss and is not insurable. It is a trading loss which arises from aging of stock and other market conditions and does not occur as a result or consequence of the destruction or damage to the business.
  • Bad Debts
    This charge relates to actual bad debts incurred and applies to business transacted in the past, consequently it is not a part of the loss of profits that follows the destruction or damage to the business.
  • Ordinary Payroll
    This is excluded under the Profits wording, and requires the insured to decide who is an important employee and insure them as a “key employee” under the standing charges.

The Profits wording specifically states that the indemnity period will not exceed 12 months from the date of loss. Coverage will apply only for the time during those 12 months in which the results of the business are actually affected as a consequence of the destruction or damage caused by an insured peril. This can be extended to 18, 24, 30 or 36 months. It is important when extending the period of indemnity to ensure that the sum insured is adequate for this time period.

Gross Earnings Form

There are two policy forms generally used to insure loss of income to a business. Each represents a different approach to achieve the same result in the insuring of business interruption losses. There is the Gross Earnings Form and the Profits Form. This portion will focus on the Gross Earnings Form.

Gross Earnings = Total net Sales – Variable Expenses

In this approach, the Indemnity Period commences at the time of the loss and ceases immediately upon the reinstatement of the lost or damaged property. By ceasing payment at this time, the Gross Earnings Form assumes that the insureds are returned to the competitive position they enjoyed immediately prior to the loss.

There are a variety of Gross Earnings forms used to insure Business Interruption losses, all of which adhere to this approach. The basic form does not include an indemnity period. However, if a Premium Adjustment Clause is added or included, the period of indemnity will be 12 months but this period can be extended for an additional premium (i.e. 18 months, 24 months and etc.).

What types of businesses need Gross Earnings?
Gross Earnings Forms are suitable for businesses that are able to immediately start generating a comparable sales level to that which was achieved before the loss occurred. Once the doors are open for business, the insured is considered to be indemnified for their loss under this form. Thus, businesses that are unique and offer a specialty product or service with little competition will benefit from this type of insurance. When they open their doors they will have most of their customers back because they offer a product or service that cannot be offered by a competitor down the street.

For exact terms, definitions, limitations and extensions, please talk to your broker and refer to your final policy wording
A commercial surety bond is like a guarantee that contract work that was promised to be completed by the contractor will be completed and protects the recipient against losses if the contract terms are not fulfilled.

Commercial Bonding Insurance Types:

  • Fidelity Bond (Employee Dishonesty)
  • General Surety Bonds
  • Bid Bonds
  • Performance Bonds
  • Labour and Material Bonds

Commercial Crime

Comprehensive Dishonesty, Disappearance & Destruction

(I) Employee Dishonesty Coverage:

Insider fraud is a major cause of loss for business owners, amounting to millions of dollars each year. Increasingly, long-time trusted employees and senior executives are the source of some of the larger employee dishonesty losses. It is precisely these people who are familiar enough with the business to have the knowledge of its vulnerable areas. Employees also have the added opportunity to cover their tracks so the act can be repeated. Anything that can be taken by outsiders can be taken even more easily by insiders.

This coverage will protect your business in the event fraudulent or dishonest acts are committed by an employee which results in a loss of money, securities or property. This coverage is also known as a "fidelity bond".

There are two types of Employee Dishonesty coverages available:

  • Employee Dishonesty Form A
    One limit applies per loss, no matter how many employees are involved, all employees are covered. There is a limit that is purchased and this is the amount payable, regardless of how many employees are involved in a loss.
  • Employee Dishonesty Form B
    The limit applies separately for each employee involved. Coverage does not have to be purchased for all employees. This offers more flexibility to increase amounts that can be purchased for those employees who offer the greatest potential for loss.

(II) Loss Inside the Premises Coverage: This insures the Loss of Money and Securities by the actual destruction, disappearance or wrongful abstraction within your premises or at any banking premises.

(III) Loss Outside the Premises Coverage:
This insures the loss of Money and Securities by the actual destruction, disappearance or wrongful abstraction outside the premises while being transported by a messenger, armored car or in the home of any messenger.

(IV) Money Orders and Counterfeit Paper Currency:
This Insuring Agreement covers loss to the insured due to the acceptance of post office or express money orders not honored upon presentation, or loss due to the acceptance of counterfeit Canadian or United States paper currency in the regular course of the insured's business.

(V) Depositors Forgery Coverage:
Depositors Forgery coverage is a valuable addition to coverage when a significant number of cheques or other negotiable instruments are written Coverage is provided for the forgery or alteration of the insured's cheques, drafts and similar instruments only, and not the receipt of forged negotiable instruments received in the course of a transaction. Even if the endorsement or alteration to such a negotiable instrument is not considered a forgery by law, the policy will consider it to be so, and coverage will be provided.

For exact terms, definitions, limitations and extensions, please talk to your broker and refer to your final policy wording
Commercial Risk

Risk Management Services

The topics covered in the various loss control guidelines are intended to provide an overall awareness of the exposures and hazards associated with a specific industry or risk. It is not possible to treat any of these subjects in an exhaustive manner, nor is it the intent of the following to do so. While the information and recommendations presented cannot guarantee a loss–free environment, they should contribute to the control of losses.

  • Building Evaluation
  • Builder’s Risk Guide to loss Prevention
  • Slip and Fall Loss Control Procedures
  • Fleet Management Loss control Practices
  • Disposal of Waste Materials (Loss Prevention Processes)
  • Guide to Preventing Water Damage Losses

For a more exhaustive comprehensive assessment of your risk, it would be in both of our interests to meet and discuss further options regarding your risk management requirements.

Risk Management Programs. We are as much a consultant as we are Brokers.

Please contact us for additional information / questions / concerns.