Commercial insurance: insurance for small businesses


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As with the personal insurance policies you have for your car or your home, as a business owner you may also need commercial insurance to protect your business. The types of commercial insurance you need will depend on the type of business you run.

What is commercial insurance?

Commercial insurance (also called business insurance) protects your business against certain risks, especially in your business premises. Without insurance coverage, such as general liability or property insurance, you risk being prosecuted if someone is injured on your property, or in the event of theft, you could lose thousands of dollars in equipment. Business insurance covers these types of costs and more.


What does a commercial insurance policy cover?

Your business has certain risks: these include the possibility that someone could be injured on your property or that an employee could injure himself on the job. That’s what insurance coverage does: reduce the risk of accidents or injuries and reduce or eliminate what you would have to pay yourself to cover these costs for your business.

Some of the types of business insurance coverage include:

  • Theft
  • Property damage
  • Liability for Injury to Your Property
  • Commercial vehicle accidents

Who Needs Commercial Insurance?

Virtually every business needs some type of commercial insurance policy, but what specific policies your business needs depends on the industry you are in, whether you have employees, whether you have commercial vehicles, and whether there are requirements for certain types of policies. .

How much does commercial insurance cost?

Because there are many different types of business insurance, and because there are many factors involved in the cost of a policy, there is no one short answer to the cost of commercial insurance.

As you start comparing different policies and brands, you should realize that these factors affect what you are offered for a monthly or annual premium:

  • Coverage options
  • Whether you opt for extensive coverage or basic
  • The industry in which your company is located
  • Whether you have other types of policies with the company

Some insurance companies offer a discount if you set up automatic payment with personal or business credit cards every month, and can also be discounted if you pay one year in advance instead of monthly.

How to Choose the Right Commercial Insurance

As you begin your research, you will find that there are many options for the insurance company you choose. Some may specialize in one type of business insurance policy, while others offer a wide variety of products.

Consider whether you want a dedicated insurance broker to work with, or whether access to online or phone customer service is better for you.

Also look at the types of coverage you need as this will determine what you pay. Shop around until you find everything on your list.

Types of commercial insurance

There are different types of commercial insurance coverage and business insurance products. Some may need to be carried through your business, while others provide coverage that can give you peace of mind.

Liability insurance

The type of business insurance that you are likely to benefit most from is General liability insurance. This protects your business in the event that someone is physically injured on your property, and the general liability insurance will cover any medical or legal costs associated with the accident.

If your business sells products, you should consider this too product liability insurance. Should one of your products cause injury or even an accident, this coverage will protect your business against legal fees.

Commercial property insurance

The real estate where your company does business also needs protection, which is what business insurance does.

Should you experience property damage or theft, this policy will compensate you for your loss. This coverage includes damage caused by natural disasters such as fires, but may not include damage caused by earthquakes or floods, so make sure you know what your policy covers as you may need additional provision for this.

Keep in mind that a commercial real estate policy is unlikely to cover personal property.

Business income insurance

What would you do if your business burned down? Even if you had property insurance to cover the damage, you could still lose thousands of dollars in revenue during rebuilding.

That’s where business income insurance coverage pays off. Also called business interruption coverage, it pays for the loss of income you may experience in post-disaster rebuilding.

Your insurance company will cover your loss of income based on your income and expense records.

Home Business Insurance

If you run a business from your home, you also want to protect your assets and inventory. Some insurance companies offer special home business policies, while others offer homeowner or renter policies that cover home businesses as well.

Professional reliability

If you work in certain areas, such as consulting, project management, or medicine, you earn a living by advising others. There may come a time when a client or patient feels that you have been negligent in your advice and could sue you, even if in reality you are not at fault.

That’s true having one professional liability insurance policies (also called errors and omissions) can be helpful because it covers all legal costs associated with any malpractice that may be brought against your business.

Commercial auto insurance

Having commercial auto insurance ensures that all company vehicles you use in your business are protected, as well as you and the employees who drive them.

A commercial car policy works much like a personal car insurance policy: you pay a premium every month (or year) based on the coverage you want. This includes liability, personal injury, property damage and uninsured motorist coverage.

Work allowance

Another liability you have is your employees. What happens if one of them hurts himself on the job? Rather than paying for its medical expenses out of pocket, your employee compensation insurance the policy will cover them, as well as any costs for rehabilitation or disability benefits while he is not working and healing.

Note that every state except Texas requires employers to have workers’ compensation coverage.

A commercial insurance policy offers peace of mind

While none of us are planning theft, injury or loss, it is a very real possibility. And the financial loss that any of these disasters can cause can undermine your business.

Having one or more commercial insurance policies with a trusted insurance company can give you the peace of mind you need to know that should the worst happen, you are covered.

This article was originally written on Feb. 10, 2021.

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