Commercial Insurance: Types of Coverage for Every Company

A commercial insurance policy is designed to protect the widely varying needs of businesses large and small.  Because there are so many different types of commercial operations, there are many different kinds of commercial insurance.  However, there are a few types which are standard for most businesses, and these fall into a couple of categories: business property insurance & liability insurance.

Business Property Insurance

For most businesses, the property that is needed to run the company is very valuable.  From a small office to a large retail company, there is always property that must be protected.  Business property can include everything from the chair and desk you sit at to the stock kept in a warehouse.  Your products, your files, your equipment – all of these things are the property of your company and needed to run the business.

Property insurance can also cover the building itself if you are the owner.  For those who lease space to run their business, it refers to everything inside the offices, warehouses, and other space occupied by the company.  For many businesses, the loss of this property would be catastrophic.  Property insurance is thus one of the most basic types of commercial insurance and often the first thing your insurance professional will discuss with you.

Liability Insurance for a Business

When it comes to liability, the risks are much higher for a business than for the average citizen.  Especially when you are dealing with the public, the risk of a small mistake that results in a big problem is very high.  Businesses are therefore protected by liability insurance.

When it comes to liability, there are many different types.  Most businesses will carry what is known as a general liability policy.  This covers a wide range of potential incidents and can prevent the company or its employees from facing a serious financial loss in the event of a lawsuit.

Depending on your type of business, you may need some different forms of liability coverage in addition to the general policy.  Common types are what are known as professional liability coverage, which comes in a few forms.  Some companies require errors & omissions coverage, which is a type of liability coverage that protects from mistakes, often in paperwork, made in the course of helping a client.  Often people like tax preparers and lawyers require this type of coverage.  It is similar to another, better known type of liability coverage, malpractice insurance, but has some differences.  Most people think of malpractice in relation to doctors, but it can actually apply to a wide range of professionals; it protects from errors seen as being below the standards expected of the professional.

Other Types of Business Insurance

Since companies and their business activities can be so varied, there are many other types of insurance that are available to business owners. Commercial auto insurance is a common type of coverage for any company that uses company-owned vehicles in the course of running the business.  This can be anything from a company car to a delivery truck.

There are also other types of liability, such as business practices liability and product liability, both intended to deal with specific types of potential liability issues.  Other types of coverage include business overhead insurance, garage keeper’s liability, and disability income insurance for business owners.

Putting together a comprehensive package to fully protect a business requires the knowledge of an insurance professional who can evaluate the needs of your business and make sure the right coverage is in place.  Whether a start-up or an established business, every company needs to have the right insurance; protecting the company from everything from theft to fire to a lawsuit is the job of a commercial insurance policy.

The three main policy types are usually bolstered by additional coverage tailored to the type of business and the size of the company, but every business should have the main three in place before ever opening their doors.