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Commercial Insurance

Commercial Insurance

Similar to the personal insurance you carry for your car or your home, as a business owner, you may also need commercial insurance to protect your business. The types of commercial insurance you need will vary, depending on what kind of business you run.

What is Commercial Insurance?

Commercial insurance (also called business insurance) protects your business from certain risks, particularly on your company’s property. Without insurance coverage such as general liability or property insurance, you run the risk of being sued if someone is hurt on your property, or in the case of theft, you could lose thousands of dollars of equipment. Business insurance covers these types of costs and more.

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What Does a Commercial Insurance Policy Cover?

Your business has certain risks: those include the possibility of someone getting hurt on your property or an employee injuring himself while on the job. That’s what insurance coverage takes care of: mitigating the risk of accidents or injuries, and reducing or eliminating what you would have to pay out of pocket to cover these expenses for your company.

Some of the types of coverage with business insurance are:

  • Theft
  • Property damage
  • Liability for injuries on your property
  • Accidents in commercial vehicles

Who Needs Commercial Insurance?

Just about every business needs some sort of commercial insurance policy, though which specific policies your company needs will depend on what industry you’re in, whether you have employees, whether you have commercial vehicles, and whether there are requirements for certain types of policies.

How Much Does Commercial Insurance Cost?

Because there are a lot of different types of business insurance, and because there are many factors that go into the cost of a policy, there’s no short answer to how much a commercial insurance policy costs.

As you start to compare different policies and brands, realize that these factors will go into what you are quoted for a monthly or yearly premium:

  • Coverage options
  • Whether you choose comprehensive coverage or basic
  • The industry your business is in
  • Whether you have other types of policies with the company

Some insurance companies offer a discount if you set up auto pay with personal or business credit cards each month, and may also discount it if you pay for a year up front rather than monthly.

How to Choose the Right Commercial Insurance

As you start your research, you’ll see there are many options for the insurance company you choose. Some may specialize in one type of business insurance policy, while others will offer a wide range of products.

Consider whether you would like a dedicated insurance broker to work with, or whether having access to online or phone customer service would suit you better.

Also look at the types of coverage you need, because this will determine what you pay. Shop around until you find everything on your list.

Types of Commercial Insurance

There are several different types of commercial insurance coverage and business insurance products. Some, your business may be required to carry, while others offer coverage that can provide you with peace of mind.

Liability Insurance

The type of business insurance you are most likely to benefit from is general liability insurance. This protects your business in the event someone suffers from bodily injury on your property, and general liability insurance coverage will pay for any medical expenses or legal fees associated with the accident.

If your business sells products, you should also consider product liability insurance. Should a product of yours cause an injury or even casualty, this coverage will protect your company from having to pay legal fees as a result.

Commercial Property Insurance

The property where your company does business also needs protection, and that’s what commercial property insurance does.

Should you experience property damage or theft, this policy will reimburse you for your loss. This coverage includes damage caused by natural disasters like fires, but may not include damage caused by earthquakes or floods, so be sure to see what your policy covers, as you may need an add-on for these.

Note that a commercial property policy will not likely cover personal property.

Business Income Insurance

What would you do if your business burned to the ground? Even if you had property insurance to cover the damage, you could still lose thousands of dollars in revenue while you rebuild. 

That’s where business income insurance coverage pays off. Also called business interruption coverage, it pays for the loss of income you might experience while rebuilding after a disaster.

Your insurance company will cover your loss of income based on your income and expense records.

Home Business Insurance

If you run a business out of your home, you also want to protect your assets and inventory. Some insurance providers offer special policies for home businesses, while others offer homeowner’s or renter’s policies that will also cover home businesses.

Professional Liability

If you work in certain fields, such as consulting, project management, or medicine, you make your living advising others. There may come a time when a client or patient feels you have been negligent in your advice and might sue you, even if in reality you are not at fault.

That’s where having a professional liability insurance policy (also called errors and omissions) can be helpful, because it will cover any legal fees associated with any malpractice suits filed against your company.

Commercial Auto Insurance

Having a commercial auto insurance policy ensures that any commercial vehicles you use in your business are protected, as well as you and the employees who drive them.

A commercial auto policy works much like personal auto insurance: you pay a premium each month (or year) based on the coverage you want. This should include liability, bodily injury, property damage, and uninsured motorist coverage.

Workers’ Compensation

Another liability you have is your employees. What happens if one of them hurts himself on the job? Rather than you paying out of pocket for his medical expenses, your workers’ compensation insurance policy will cover them, as well as any rehabilitation costs or disability payments while he’s off work and healing.

Note that every state except Texas requires employers to carry workers’ compensation coverage.

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A Commercial Insurance Policy Provides Peace of Mind

While none of us plan for theft, injury, or loss, it is a very real possibility. And the financial loss that any of these disasters can cause could be debilitating to your business operations.

Having one or more commercial insurance policy with a trusted insurance company can provide the peace of mind you need to know that, should the worst happen, you’re covered.

This article was originally written on February 10, 2021.

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ABOUT AUTHOR

Susan Guillory

Susan Guillory is a Senior Content Writer for Nav. She’s written books on business and travel, and blogs about small business on sites including Forbes and AllBusiness.

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