Shopping for commercial insurance isn’t always easy. Not only do you need to consider the costs for each type and level of coverage and types of insurance on the market, but also that requirements can vary greatly by state—which can be a big deal if you do business in more than a single state.
So how do you choose the right kind of commercial insurance for your business and make sure you’re getting a reasonable rate for it? It starts by understanding the commercial insurance options that you are likely to need.
Commercial Property and Casualty Insurance
Property and casualty insurance caters to personal property damage and liability claims. It’s one of the most commonly requested type of commercial insurance.
Let’s break it down further. Property insurance covers you for any belongings that have been stolen or damaged due to events such as fires, theft or damages resulting from faulty structures. In a nutshell, it means that you can replace or repair assets such as buildings, equipment, furniture and inventory. Other items covered here also include high-value possessions and property that your business owns, such as expensive machinery.
Casualty insurance, on the other hand, protects you should you be found responsible for an injury to a person or damage to another’s property. Examples would be having someone fall down in your office, or you accidently breaking a window at a customer’s location while you’re cleaning it. The right casualty insurance policy should cover costs related to legal responsibility both in and out of court, meaning it’s important you select the right amount of coverage.
Commercial Automobile Insurance
Auto insurance is required on your personal care or truck, and it’s also necessary on the vehicle you use to conduct your work. Having a good policy in place on cars, trucks, vans and other vehicles owned by your business protects your company should you or one of your employees become involved in an auto accident. Some policies also cover expenses relating to employees who may suffer an injury while driving during work-related duties.
Workers’ Compensation Insurance
You’ve probably heard of workers’ compensation insurance, which often referred to as workers’ comp. This insurance replaces lost wages and pays medical expenses resulting from of a work-related injury or an illness. Workers compensation requirements vary by state, by industry and by business type, you may incur significant penalties if you don’t comply with those which apply to your business.
Commercial Umbrella Insurance
Even when you have basic policies in place, what if something happens and the liability claim exceeds the limits of your commercial insurance? For some companies, that could be catastrophic, which is why they carry a commercial umbrella policy. An umbrella policy is separate from other policies, and it takes over when the limits on your other liability policies have been reached. It covers things like medical expenses, attorney’s fees and any damages that might be assessed as part of a lawsuit.
Business Interruption Insurance
Unfortunately, bad things happen, like fires, weather incidents and theft—all of which can impact your ability to conduct business. But just because your office can’t operate doesn’t mean that bills stop. Business interruption insurance protects against lost income and covers extra expenses that are required to get you operational again (for example, a rental space while your offices is rebuilt after fire.)
Builders Risk Insurance
This type of insurance, as the name indicates, covers buildings that are still under construction. Suppose you’re building a new warehouse, and it is damaged by a storm before it can be completed. Builders risk insurance provides you with the funds you need to recover from losses and move your operations forward.
Equipment Breakdown Insurance
Whether your business functions on computers or boilers, equipment breakdown insurance can come in handy. It not only covers the cost to repair or replace damaged equipment but, depending on your policy, could even pay for the costs of spoiled materials, business income losses, and other expenses.
Although these are the most common types of commercial insurance, others are available, like professional liability insurance, errors and omissions insurance and even policies for aircrafts, debris removal, and crop hail insurance. Learning more about them, and talking to a qualified commercial lines agent who will shop rates and find you the best policies for your business will make sure that your company is protected against even against the most unexpected occurrences.