Business insurance is a tool that helps businesses manage risk. It covers unforeseen losses that may threaten a company’s livelihood, such as natural disasters or the death of a key employee.
The types of coverages vary, but most small businesses need general liability, property, business auto and workers’ compensation insurance. Typically, these are combined into one policy called a business owners policy or commercial package policy.
Property Insurance
Business property insurance protects your business from financial loss resulting from damage to or theft of your company’s physical space and equipment. It can also include coverage for the personal property of others that is in your care, custody or control, subject to policy limitations and exclusions. Check out further at Leading Insurance Outsourcing Company.
The property portion of a business insurance policy may offer actual cash value (ACV) or replacement cost coverage, which pays your company for its property up to a specified limit, less depreciation. It can also include additional expense coverage in the event of a catastrophic loss to help you get your company back on its feet after a disaster.
The liability portion of a business insurance policy, sometimes called commercial general liability or business owners’ policy (BOP), safeguards your company from lawsuits that stem from accidents on your premises, the use of a defective product or even allegations of libel and slander. It also covers certain legal defense expenses.
Liability Insurance
Liability insurance in a business setting protects the financial interests of the insured company or individual against claims alleging negligent business activities that result in bodily injury or property damage. In many cases, this type of coverage also pays for legal costs. It may be combined with property insurance in a single policy or offered as an umbrella policy to provide greater protection.
For professionals such as doctors and lawyers, professional liability insurance (or errors and omissions insurance) is often required or strongly recommended. This type of coverage is specific to the risks/liabilities associated with the profession.
Business Auto Insurance
Property and liability insurance are typically offered together in a package policy known as a Business Owner’s Policy (BOP). This option simplifies the purchasing process and helps to reduce premium costs. It is important for businesses to re-evaluate their insurance needs on a regular basis. As the business grows and changes, so too will its insurance needs. This includes adding or deleting coverages as well as reviewing the level of coverage provided by each policy.
If you or your employees drive for work, business auto insurance (also known as commercial auto insurance) may help protect your company’s vehicles and drivers. It also typically includes liability coverage to pay for property damage or bodily injury caused by an accident you or your employees cause.
Depending on the type of work you do, your business might need specialized coverage for vehicles like dump truck utility trailers or special purpose trailers that have equipment mounted on them. Your policy can include protection for those vehicles as well as cars, trucks and vans you or your employees use for work.
You might also need a separate hired and non-owned auto insurance policy to provide coverage for people who drive personal cars or trucks that your business provides them with for work. This is especially important if you frequently allow employees to take company cars home at night or for weekend errands. A separate hired and non-owned policy can help ensure those personal drives are covered.
Workers’ Compensation
For businesses with employees, workers’ compensation insurance (also known as workmans’ comp) pays for medical expenses related to workplace injuries and illness. It also covers lost wages and provides death benefits. This coverage is required in most states for businesses with employees.
In addition, the workers’ compensation policy may include employer liability coverage to protect the business from lawsuits resulting from a worker’s claim. A variety of other insurance policies are available to small business owners. For example, professional liability insurance (also called errors and omissions insurance) protects the business against client lawsuits over unsatisfactory work. And cyber liability insurance helps cover costs associated with a data breach or malware attack.
Typically, this policy is purchased as a separate policy, although a few insurers offer a package policy that bundles workers’ comp with property and commercial auto insurance. The cost of this coverage depends on factors such as employee job classification, risky duties, payroll and history of claims.