Business insurance is specially designed to provide coverage against the risks your business may encounter at various stages of its operation.
It provides coverage against damages to your business premises, vehicles used for the business, your office equipment and your inventory. It also protects your company in the event of a lawsuit for specific acts of your business or employees. It protects against losses resulting from burglary or other forms of crimes, including employee fraud.
Commercial insurance can be divided into three broad categories:
- Commercial General Liability
- Commercial Property Insurance
- Commercial Automobile Insurance
Commercial General Liability coverage protects your business against financial loss from claims for physical injury or property damage that your business is found liable for. In addition to covering the claim, it also provides coverage for legal fees.
Commercial (Business) personal property coverage reimburses an insured party who has suffered a financial loss because their property has been damaged or destroyed. Most commercial insurance companies use two approaches to determine value of your property at the time of a claim; 1) The replacement cost is the cost to replace property with new property, and 2) the actual cash value which is the replacement cost minus the accumulated depreciation for age and condition.
Basic property insurance policies are written to cover fire, lightning, explosion, windstorm, hail, smoke, aircraft or vehicle damage, riot or civil commotion, vandalism, sprinkler leakage, and sinkhole collapse. Other property insurance policies add coverage for water damage, weight of snow, ice or sleet, breakage of glass and coverage for falling objects.
The building and personal property coverage form is used to insure almost all types of commercial property. This insuring agreement promises to pay for direct physical loss or damage to covered property at the premises as described in the policy under covered cause of loss (perils). Coverage for the building includes the building and structures, completed additions to covered buildings, outdoor fixtures, permanently installed fixtures, machinery and equipment.
A Business Owners Policy (BOP) is a combination policy that includes both General Liability and Business Property Coverage.
Related to the property or equipment that you must cover as a small business is your Commercial Auto coverage. Commercial auto insurance provides protection against the damages caused by the vehicles used for business purposes. For example, similar to private auto insurance, comprehensive coverage provides coverage for vehicle damages resulting from fire or theft. Collision coverage covers losses due to accidental collision, while liability coverage protects you if your business is sued for an accident involving your company vehicle. A complete inventory of your fleet, a listing of the drivers and details of the vehicles use will be required in order to get a quote.
Once you select the right type of coverage for your business, you’ll also need to select the appropriate limits and deductibles to suit your needs and your budget. Before buying a business insurance policy, it is very important to have a detailed discussion with a trusted insurance agent. By analyzing the type and size of your business, an agent will guide you to the type of insurance you need.
