Understand the Different Commercial Insurance Policies

Anytime a new business is started, certain risks are inherent and should be dealt with appropriately. In order to protect a business from any future problems, entrepreneurs turn to commercial insurance policies, similarly to how a consumer would plan for the future with an auto or life insurance policy. These policies are used to ensure the financial stability and the future of the business for things that cannot be controlled for. It’s important that every business owner understand the different types of commercial insurance in order to choose a policy that aids in the process of building a successful business.

Commercial Insurance Policies Every Business Needs

Regardless of the type of business you own or the industry in which you operate, there are seven policies that it is recommended all businesses purchase in order to minimize risk.

•Property – If you own or lease a space for your business, property insurance is an absolute must. This coverage includes inventory, furniture, signage and equipment in the event of a theft, storm or fire. If your area is at risk for earthquakes and floods, you may also choose to add those incidents to your policy.

•Vehicle – If your business uses any company vehicles, they should be insured under a commercial policy in order to protect for accidents. Employees who use their own vehicles for company purposes are covered under their own auto insurance policies, but any company vehicles should be covered under a commercial policy.

•Home-Based Business – Thousands of small businesses are started at home each year, but many entrepreneurs are unaware that they need home-based business insurance. While commercial insurance may cover you if you operate outside the home, there are specific policies for those without an actual physical location or store.

•Product Liability – If you are in the business of marketing any type of product that is sold on the general market, then product liability is a must-have. If at any time your product is used in a lawsuit, despite your best attempts to keep your products safe, then product liability insurance will help cover your costs.

•Workers’ Compensation – Once you’ve hired your first employee, you should have workers’ compensation insurance. This coverage handles disability, death benefits and medical treatment in the event that one of your employees is injured or dies while working. Even jobs that are low-risk require a workers’ compensation policy, not only to protect your business, but to provide for your employees if an accident occurs.

•Professional Liability – This is also referred to as errors & omissions insurance, and basically covers a company against any negligence claims that may come from failure to perform or unforeseen mistakes. Each industry is different, and companies should consult their own insurance agent rather than choosing a one-size-fits-all policy regarding professional liability insurance.

•Business Interruption – If any type of catastrophic event or disaster occurs and your day-to-day operations are affected or interrupted, you may suffer revenue loss. Business interruption insurance covers your business for any loss you take if your staff is unable to come into the office or your location must be fixed.

You can’t predict the future, and you can’t account for every risk or problem your business will face in the future. Commercial insurance is designed to minimize those risks as much as possible, and to give your business every opportunity to succeed. Companies without the right coverage may fail or deal with catastrophic losses that take years to recover from.

No Blanket Approach to Insurance

There is no blanket approach to commercial insurance, and every business and industry is different. This is why it’s important that every entrepreneur meet with an agent to determine exactly which policy will protect their individual company. Your products and ideas are unique and different from your competitors’ – your insurance policies should be also.

Legal Disclaimer

The content on our website is only meant to provide general information and is not legal advice. We make our best efforts to make sure the information is accurate, but we cannot guarantee it. Do not rely on the content as legal advice. For assistance with legal problems or for a legal inquiry please contact you attorney.