Operating a business can be a dangerous and costly endeavor, so protecting it against financial disaster is paramount for safeguarding all the hard work you’ve invested into building it.
Most businesses need various forms of insurance coverage; some types are mandated by law while others simply make sound business sense. Many insurers offer packages that combine property and liability coverage into one policy.
Property Insurance
Business insurance serves to protect companies against financial loss caused by accidents and other unforeseen circumstances. While some types of coverage, like commercial general liability or workers’ compensation insurance are legally mandated for most companies, others like professional liability or business interruption insurance can be chosen freely depending on factors like location, industry and whether or not their premises are owned. When selecting an appropriate policy it depends on various criteria including location, industry and whether or not your premises is yours or leased from someone else.
Property insurance policies usually cover any buildings owned by companies as well as most of the equipment within them, although certain policies may exclude foundations, paved surfaces and IT systems as well as floating property that moves between worksite locations as needed for different projects.
With so many insurance options to choose from, it’s crucial that business owners understand their specific requirements before selecting an appropriate policy. One effective method to do this is assessing potential risks before comparing quotes from multiple providers – working with an experienced insurance agent is also key in helping navigating through the often complex world of commercial insurance.
Business Interruption Insurance
Business interruption insurance (BI) covers operating costs associated with recovery after physical loss to a company, typically when caused by fire, hurricane or theft. BI coverage typically comes bundled together with property and general liability in a Business Owners Policy (BOP), although separate commercial property policies may offer it. It usually kicks in following direct physical damage that prevents it from operating such as fires, hurricanes or theft, leaving you temporarily unable to conduct business – an example would be fires, hurricanes or theft – however this coverage does not cover indirect financial losses such as customers leaving or delays in getting new supplies arising as a result.
Business interruption coverage (BI) may be enhanced with additional provisions, including civil authority ingress/egress coverage, service interruption coverage and dependent properties coverage. As COVID-19 continues to spread nationwide, business owners should review their current BI policies to make sure they are sufficiently protected. Insurance costs vary per business but could potentially cover for an entire year’s lost revenues.
Commercial Auto Insurance
Commercial auto insurance provides peace of mind when driving for work or simply operating vehicles on behalf of your business, such as trucks, vans and cars. Also referred to as business car insurance, commercial auto policies offer liability and physical damage coverage for these types of vehicles as well as coverage for employees using personal vehicles for work-related use (UM/UIM coverage).
Costs associated with business car insurance policies can vary significantly, depending on a variety of factors such as vehicle type, driving distances, deductible and other considerations. Contractors reliant upon large vehicles for transporting tools and equipment may require higher policy limits than food truck owners; similarly businesses providing passenger transportation services (taxi and limousine companies) need specific types of policies. If you need guidance regarding your commercial auto coverage needs speak with a licensed independent agent; in many instances this coverage can be purchased alongside other policies as part of an effective package saving both time and money.
Commercial General Liability Insurance
Cost-effective commercial general liability insurance should be an integral component of every small business’s financial protection plan. Without it, one frivolous lawsuit can quickly rack up legal bills and settlement expenses that would devastate its finances.
CGL policies offer coverage against bodily injury claims (such as slip and fall accidents), property damage claims, personal and advertising injury ( such as slander or false advertising) as well as defense costs to defend against these types of suits. Some policies even include professional liability coverage to guard your business from errors and omissions in its work processes.
CGL coverage can be purchased either individually or included as part of a Business Owners Policy (BOP) or Commercial Package Policy (CPP). Annual payments instead of monthly instalments can help lower premium costs; prices of business insurance policies depend on industry, location and building size – with higher operating expenses or customer interactions likely incurring greater premium costs for their CGL policy coverage.
Business Owners Policy (BOP)
Business Owner Policies provide both general liability insurance and commercial property coverage in one policy tailored to small businesses, often at reduced costs than purchasing these coverages separately.
BOPs generally cover damage to customers’ or clients’ property, business interruption, inventory loss and the costs of repairing or replacing equipment, in addition to providing financial protection against certain lawsuits and covering medical expenses for injured customers.
BOP rates depend on factors like location and size of a business as well as industry and operations. Construction firms tend to face greater risks than media or advertising firms and thus their premiums tend to be higher.
Companies looking to keep business insurance costs under control can invest in risk management programs designed to prevent costly claims and losses from happening, such as implementing safety measures and training employees to prevent accidents that could lead to claims. Some insurance providers even offer discounts for companies taking steps to mitigate their risks.
