Types of Business Insurance
Businesses, like people, are one-of-a-kind. Individual requirements. Risks specific to the industry. Various revenue streams. Everything is one-of-a-kind!
That is why there is no such thing as a one-size-fits-all business insurance package. There are numerous types of business insurance coverages that can be combined. We’ll go over what’s available so you can get the protection you require.
Types of Business Insurance
Business insurance (also known as commercial insurance) is one of the best defensive strategies to protect your company, whether you’re selling pop sockets out of your garage or building apartments in Atlanta.
It covers theft, on-the-job injuries, vehicles, medical costs, costly lawsuits, cyberattacks, and other events that could put your company out of business. Some insurance policies pay you directly for covered events. Others pay the people you owe for filed claims. (If you already know what kinds of business insurance you require, see our five-step guide to obtaining business insurance.)
Here is a breakdown of the 11 different types of business insurance available.
1. Business Owners Policy (BOP)
If you own a small business, a business owners policy (BOP) is a good place to start. It is a package policy that typically includes general liability and property insurance. It’s also a fantastic way to save money!
2. General Liability
General liability is the hero of all business insurance policies. It addresses issues such as:
- Property damage
- Legal costs
- Medical expenses
- Bodily injury
So, if a customer slips on the ice in front of your building, breaks their foot, and sues, general liability kicks in and pays for legal and medical expenses. It can also cover space you rent for your business and assist you if you are found liable for damage to your landlord’s property.
3. Workers’ Compensation
With the right coverage, you can protect both your business and your budget! General liability insurance is required if you own a business. In conclusion.
However, it, like Superman, has some Kryptonite flaws. It does not cover employees who are injured on the job, or cases of poor workmanship, professional errors, or car accidents.
3. Compensation for Workers
The majority of people have heard of workers’ compensation (or workers comp). When there are on-the-job injuries, it protects your company and employees. As in, if someone slips on a stray monkey wrench and breaks their ankle (c’mon, people!). Even if you only have a few employees, most states require you to have workers’ compensation insurance. It addresses:
- Medical bills for the injured worker
- Lawsuits against you or the company
- Lost wages if someone misses work
- Physical therapy
- Funeral costs for worst-case scenarios
Funeral expenses in the worst-case scenario
You’d have to pay these costs out of your own pocket if you didn’t have workers’ compensation. That’s not good.
4. Health Insurance
Another type of business insurance you can add to cover your employees’ medical expenses is health insurance. It’s also an excellent way to attract and retain employees. There’s even a small-business health care tax credit you could qualify for.
5. Business Personal Property (BPP)
Inventory, tools, office supplies, computers, heavy machinery, furniture, and other equipment are all covered under business personal property insurance (also known as business contents insurance). It also includes buildings that you own or rent. So you wouldn’t be devastated if a fire broke out and you lost a warehouse full of inventory. However, it will not help with floods or earthquakes. You will need separate flood and earthquake insurance.
Also, if you run your business from home, don’t assume your belongings are covered by your homeowners insurance policy. Usually, it isn’t.
6. Professional Liability Insurance
If you work in the professional services industry, professional liability business insurance (also known as errors and omissions insurance) protects you (think consulting or accounting). If someone sues you or files a claim against you for negligent work, you will not be forced to pay legal fees on your own.
7. Business Auto Insurance
If you drive for work, you’ll need business (or commercial) auto insurance. (Your personal auto insurance policy will not cover commercial use.) Commercial fleet coverage is also available. So, if those donut trucks break down, even if you’re “forced” to eat all of them yourself (to prevent spoilage, you know), at least you’ll be able to get the trucks back on the road soon.
9. Excess Liability
Digital threats are a major concern these days. And cyber liability insurance will provide some protection in this new Wild West of digital bad guys. It covers the costs of data breaches and leaked customer data. Check out cyber liability if your company relies on cloud storage or servers.
10 .Crime Insurance
Concerned about a claim or lawsuit exceeding the policy’s limits? This is where additional liability coverage comes in. It is an additional layer of coverage that you can add to existing policies to increase the amount your insurer will cover for damages caused by you or your employees. It is also sometimes included in umbrella insurance policies.
10.Criminal Insurance
Is it possible that someone is stealing your colorful yard gnomes? Crime insurance protects your company from theft, forgery, and fraud. It makes no difference whether it is done by employees or non-employees.
11. Business Income Insurance
If your business is closed, business income (also known as business interruption) compensates you for lost revenue. For example, suppose a freak tornado destroys your main warehouse and you lose money for a few months while you rebuild your inventory.
What Types of Business Insurance Are Required?
Most states require workers’ compensation insurance. In addition, if you have more than 50 employees, you must provide health insurance. Accountants must have professional liability insurance in some states, and doctors must have malpractice insurance.
Investigate the laws of your state and work with an independent agent who can point you in the right direction.