Business insurance is a huge topic with a number of types available to protect your business, record profits and losses, and offer financial assistance in the event of a claim. Companies may protect their businesses against risks such as product liability claims, workplace accidents, property damage claims, commercial crime, fire, and theft.
General liability insurance
General liability insurance is an umbrella policy that protects you and your business from claims for bodily injury and property damage arising from your operations.
General liability insurance protects you against claims for injuries that arise out of the normal course of your business, such as slips and falls on the premises or customers being injured at a retail store.
General liability insurance also provides coverage for other types of claims that do not fit into other types of policies, such as those involving:
- Vehicles: This type of coverage includes coverage for auto accidents due to any cause, including uninsured motorists.
- Trespassing: Trespassing can occur when someone enters another person’s property without permission or intrusion into restricted areas, such as a building site or construction zone.
- Vandalism: When someone intentionally damages or destroys your property, vandalism coverage will provide protection against losses caused by vandalism or malicious damage to your business equipment.
- Business interruption: Business interruption coverage provides protection against losses if a natural disaster forces you to close down temporarily (for example, a flood in your facility).
Business property insurance
Business property insurance is a form of business insurance that protects against losses caused by damage to or destruction of your business assets. Business property insurance covers your equipment, such as computers and furniture, as well as buildings and other types of structures.
In addition to protecting against accidental damage, business property insurance can also help cover losses resulting from a fire, theft, or water damage. Business property insurance may also cover liability claims if someone gets injured on your property and you’re at fault for their injuries.
Businesses should consider adding additional coverages to their business property policies, including:
- liability coverage – Protects you if someone is injured on your premises or in your parking lot or in other areas in which you have control over access
- physical damage coverage – Protects you from damage to your building and its contents (e.g., a fire destroys your office)
- business interruption coverage – This type of policy pays an agreed amount if your business must close temporarily because of loss or damage
Business property coverage protects your assets against loss or damage caused by fire, wind, lightning, and other natural disasters. It also protects against theft and vandalism, as well as accidental damage to your property caused by you or your employees.
Business interruption insurance
Business interruption insurance (BI) is a form of business property insurance that provides coverage for losses due to a natural or man-made disaster. Business interruption insurance covers lost income from the interruption of business operations, as well as replacement costs of business equipment and inventory.
Business interruption insurance should be considered for any type of business that has a high risk of loss because it can provide financial protection against unexpected events such as fire, floods, storms, and earthquakes.
Business interruption insurance is designed to cover losses due to a natural disaster or another event. Business interruption insurance can be used in conjunction with property and liability coverage, or as a stand-alone policy.
The cost of business interruption coverage depends on several factors, including the type of loss you have, your location, and the size of your business.
The more people are affected by a natural disaster, for example, the higher the premium for business interruption coverage.
Business interruption insurance typically protects against losses caused by fire, earthquakes, and other disasters in your business location. It covers physical damage to buildings and equipment as well as loss of income because of lost product sales and employee wages during the earthquake or other event.
Business interruption insurance can help protect your business from financial losses during major events such as hurricanes, floods, and tornadoes. Businesses located near large bodies of water or along important transportation routes may also be affected by weather conditions or other natural disasters such as earthquakes or tsunamis that result in flooding or mudslides
Product liability insurance
Product liability insurance is a type of business insurance that provides protection against lawsuits or judgments resulting from injuries or deaths caused by defective products. The insurer will pay for the costs associated with settling a lawsuit or defending against a claim, including legal fees, court costs and medical expenses.
Product liability insurance is not required by law for all businesses. However, it may be an important part of your overall insurance program, especially if you sell items that could be dangerous to consumers.
How much product liability coverage do you need?
The amount of coverage you need depends on several factors:
Your company’s size and history. A small shop that sells only one product may have little risk of being sued; a large retail store with thousands of potential customers could have many lawsuits filed against it in the event of an accident or injury. Insurance companies generally offer lower limits on this type of coverage than they do on general liability insurance because they know that there are fewer claims involved.
What kind of claims do you expect to receive? If you anticipate receiving very few claims over the course of your business’s existence, then you probably don’t need as much coverage as someone who expects to be sued regularly for years at a time.
Professional liability (errors and omissions) insurance
Professional liability (errors and omissions) insurance covers legal costs, judgments, and settlements resulting from professional errors or omissions.
This type of coverage protects you from the financial consequences associated with errors or omissions in the following areas:
- Medical malpractice – Injured patients and their families can file claims for damages caused by negligent medical treatment. Professional liability insurance protects doctors, nurses, dentists, and other health care professionals who provide services to patients.
- Legal malpractice – Lawyers may be held liable for legal malpractice if they fail to properly perform their duties as attorneys. The types of claims that may result from legal malpractice include attorney negligence, failure to follow rules of court, and breach of contract.
- Personal injury/property damage – Personal injury claims cover medical bills, lost income, and property damage caused by someone else’s negligence or fault. Professional liability insurance protects chiropractors, doctors, physical therapists, and other health care practitioners who treat patients in their offices.
Commercial vehicle insurance
Commercial vehicle insurance is a type of commercial auto insurance that provides coverage for a variety of vehicles owned or leased by the insured. It includes motor vehicles used for the transportation of people or goods, although not all commercial vehicles are covered under this type of policy.
Commercial vehicle insurance policies can be divided into two main categories: policyholder self-insured and insured by an insurance company. The difference between these two types of policies is that with self-insurance, you pay your own insurance premiums and deductibles. The other option is to have your vehicle insured by an insurance company, which pays the other party’s losses if you’re at fault in an accident.
If you choose to self-insure your commercial vehicles, you will need to meet certain requirements before being approved as an insured. Some companies may require that you have a good driving record, while others may insist on proof of business ownership or regular operations before they will issue coverage to their clients.