Commercial insurance is a frequently discussed term in the sphere of business, yet perhaps the most unclear terminology to business owners across the world.
Generally speaking, every business needs a way to protect itself in case of accidents. Most newly-launched businesses might assume that only large companies should obtain insurance coverage, but serious companies should consider getting one if they want to safeguard and protect their operations, especially during lawsuits. By taking out insurance coverage, you can save your company from financial disaster, and regardless of its size or nature, insurance coverage brings equal benefits whenever the need arises.
To understand what type of commercial insurance you need, you must first learn what this insurance coverage entails and decide what to opt for.
Commercial Insurance
Commercial insurances, which is also known as business insurance, is an insurance policy that gives your company protection from any unforeseen problems that could impact your business’s success. Commercial insurances safeguards both the business owner and their employees from any injury, interruption of business operations, and other risks.
As there are so many types of businesses with unique needs and situations, there is no one-size-fits-all insurance policy available but commercial insurances comes in many shapes, sizes, and colors. This is where a professional and licensed insurance broker comes into the picture who can provide and explain the commercial insurance quotes and help you decide what the best solution for your needs is.
When you’re running a business, it’s usually legally required to have commercial insurances. If you happen to run across the term business insurance and end up getting confused, you should know that it implies the same as commercial insurances. Generally, the terms can be used interchangeably as they refer to the insurance coverage of a company, regardless of its size or nature.
Main Types of Commercial Insurance
If you happen to own or run a business, it’s vital to understand that there are some types of commercial insurances that you must have while others are optional.
General Liability Insurance/Commercial General Liability (CGL) is the most basic form of insurance that every business should have as it brings a lot of benefits. This type of insurance helps cover costs for property damage claims against your business, settlements, judgments, and court costs for all covered claims, medical costs in case someone is injured at your company, and administrative costs to handle any covered claims. Remember that general liability insurance usually doesn’t cover any damages to your business property or office, personal injury claims made by employees, or car accidents caused by you or your employees while driving for work purposes.
Workers’ Compensation
The worker’s compensation insurance helps cover work-related injuries for employees by paying for medical treatment costs and restoring lost wages. Employers who have even just one employee are required to obtain workers’ compensation insurance. The insurance provider must give employee coverage if there is a work-related injury or illness, regardless of the cause, condition, or circumstance.
Commercial Property Insurance
Another crucial commercial insurances for businesses is commercial property insurance which helps cover damage to your business property and protect its physical assets from fire, explosions, storms, theft, and vandalism. Earthquakes and floods aren’t usually covered by this type of insurance unless it’s added to the insurance policy.
Commercial property insurance differs from commercial auto insurance, as the latter covers damage to vehicles that are owned by your company. If you require collision coverage for your business vehicles, consider obtaining a commercial auto insurance policy.
Professional Liability Insurance
Professional liability insurance is usually not required by the law but it’s worth looking into as it helps cover claims like negligence, violation of good faith and fair dealing, misrepresentation, and inaccurate advice.
Umbrella Business Insurance
If you feel that the business you are running is at a high risk of being sued or in a greatly litigious state, a recommendation is for you to consider liability coverage that goes beyond the maximum amount that is offered by your commercial liability insurance policy.
For such cases, you can purchase an umbrella policy or excess insurance policy to add additional coverage and be covered for liability claims that go beyond what your typical policy covers.
Final Thoughts
Whether you have a small or big business, it’s crucial to learn the various types of commercial insurance coverage so that you can protect your business in the long run. Check it out:
If you feel confused about what is the best insurance, it’s advisable to contact a reputable insurance agent to explain the different types of insurance policies you can invest in and help you find a custom commercial insurance plan that will match your budget and needs.
