Types of Business Insurance

Every potential risk that your company could face is covered by insurance. The price of a policy and the level of coverage it provides differ depending on the insurer.

With your insurance agent or broker, you should discuss your specific business risks and the types of insurance that are available. Your insurance firm can advise you on the specific types of coverage you should consider.

The Right Types of Insurance for Businesses

Our BOP is adjustable, so you may add additional business insurance coverages to increase your protection. If your company provides a professional service to customers, for example, you may want to consider purchasing a professional liability insurance policy.

It might assist insulate your company from charges that it provided poor professional services. We understand that every business is unique. That’s why we’re here to assist you in obtaining the appropriate sorts of commercial insurance.

Related: A Step-by-Step Guide to Launching a Business

1.General liability insurance

General liability insurance is purchased by business owners to cover legal costs associated with accidents, injuries, and allegations of carelessness.

These insurance policies include payouts for personal injury, property damage, medical bills, libel, slander, the cost of defending litigation, and settlement bonds or judgments required throughout the appeals process.

General liability insurance helps protect your business from claims that it caused: 

  • Bodily injury to someone else
  • Property damage to another person’s belongings
  • Personal injury, like libel or slander

2. Product liability insurance

Companies that manufacture, wholesale, distribute, and retail a product may be liable for its safety. Product liability insurance protects against financial loss as a result of a defective product that causes injury or bodily harm.

The amount of insurance you should purchase depends on the products you sell or manufacture. A clothing store would have far less risk than a small appliance store, for example.

3. Professional liability insurance

Professional liability insurance should be considered by business owners that provide services (also known as errors and omissions insurance). This sort of liability insurance protects your company from mistakes, blunders, and negligence when providing services to clients.

Depending on your profession, your state government may require you to have such an insurance policy. In some states, for example, physicians are required to acquire malpractice insurance in order to practice.

Professional liability insurance helps cover lawsuits claiming that you made a mistake in the services you provided. This type of insurance is also known as errors and omissions (E&O) insurance. 

4. Commercial property insurance

Property insurance covers all losses and damages to firm property caused by a wide range of catastrophes such as fire, smoke, wind and hail storms, civil disobedience, and vandalism. Lost income, business interruption, buildings, computers, company paperwork, and money are all included in the definition of “property.”

Property insurance plans are divided into two types: (1) all-risk policies, which cover a wide variety of incidents and dangers except those specifically named in the policy; and (2) peril-specific policies, which only cover losses caused by the perils listed in the policy.

Fire, flood, crime, and business interruption insurance are examples of peril-specific plans. Peril-specific policies are typically obtained when there is a high risk of peril in a specific location. All-risk policies generally cover the risks faced by ordinary small businesses, whereas peril-specific policies are typically purchased when there is a high risk of peril in a specific area.

Consult your insurance agent or broker to choose the appropriate type of commercial property insurance for your small business.

Commercial property insurance protects the building and equipment you need to conduct your business, whether you own it or rent it. This insurance does not cover damage caused by earthquakes or floods.

To help protect your business from these types of claims, you’ll probably need to purchase a separate policy, such as commercial flood insurance.

5. Home-based business insurance

Contrary to popular assumption, most homeowners’ insurance plans do not cover damages incurred as a result of a home-based company. You can add riders to your homeowners’ insurance to cover common business risks like property damage, depending on the risks your business faces.

However, homeowners’ insurance only covers a certain amount of risk when it comes to home-based enterprises, so you may need to obtain extra policies to cover other risks like a general and professional liability.

6. Business Income Insurance

If you can’t run your business because of covered property damage, business income insurance can help replace your lost income.

So, you can use this coverage to help pay for ongoing expenses like rent, utility bills, or payroll. This type of insurance is also known as “business interruption insurance.”

7. Workers’ Compensation Insurance

Workers’ compensation insurance gives your employees benefits if they get hurt or sick at work. These benefits can help: 

  • Pay for their medical bills
  • Replace most of their lost wages if they miss work to recover
  • Cover funeral costs if they lose their life due to a work-related injury or illness
  • Pay for ongoing care, like physical therapy

Most states require businesses with employees to carry workers’ compensation insurance. You can face fines, penalties, and criminal charges if you don’t comply with your state’s laws. 

8. Data Breach Insurance

Data breach insurance helps your business respond to a data breach if personally, identifiable information gets lost or stolen. Some insurers may call this coverage “cyber insurance.” Data breach insurance can help pay your costs too.

  • Notify impacted individuals
  • Offer identity theft monitoring services
  • Create a public relations campaign

9. Commercial Umbrella Insurance

Commercial umbrella insurance extends the coverage limits for some of your liability policies. So, if a claim exceeds the limits on your policy, your umbrella insurance can help cover the difference. 

10. Commercial Auto Insurance

If you drive company-owned vehicles for business, commercial auto insurance can assist in protecting you and your employees on the road. It can assist in the coverage of property damage and physical injury claims resulting from an accident caused by your company.

This is significant since a personal automobile insurance policy will not cover third-party claims if you cause an accident using a company vehicle.

Get Recommendations on the Types of Business Insurance You May Need

Getting the correct forms of business insurance is critical no matter where you are in your organization. It can help entrepreneurs get off to a solid start when they first open their doors.

It’s also vital for seasoned business owners since, depending on your industry and the types of insurance you carry, your policy requirements may alter over time. We’re a small business insurance firm with over 200 years of experience and over 1 million satisfied customers.

Our experts wish to help you in the same way. We can assist you in obtaining the forms of commercial insurance that your firm needs. Get a quote for business insurance today and find out how we can assist you.

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