Most small businesses need to purchase at least the following four types of insurance: property insurance. Most businesses need general liability insurance, and your state laws may require workers' compensation insurance and commercial auto insurance. However, you may need other types of coverage depending on what your company does, where it operates, what types of assets it has, and other factors. General liability insurance is a fundamental component of business insurance.
It protects you from lawsuits filed by people outside your company who allege that your company caused bodily injury, property damage, or reputational damage. All companies must have general liability insurance. Commercial property insurance pays for damage or loss to physical property, such as an office building or inventory, due to things like a fire or lightning strike. Some causes, such as damage caused by floods or water, are generally excluded, but you may be able to add endorsements that expand your coverage if you are faced with particular risks.
Business income insurance, also called business interruption insurance, protects you financially in the event of a covered disaster or situation that prevents you from operating your business. This insurance can reimburse you for lost business income, rent, payroll and taxes. Cyber liability insurance is designed to protect you and your company if your digital data is compromised. This insurance, which is sometimes available as a supplement to a business owner's policy or general liability insurance, generally covers your operating expenses, as well as expenses incurred by customers whose online security was affected.
If your company sells any type of physical product, you may want product liability insurance. This covers legal expenses if someone claims that a product you manufactured, sold, or distributed caused an injury, damage, or loss. Commodity suppliers, even final retailers, should consider this type of coverage, since plaintiffs' demands generally have extensive coverage to maximize payments. If you're not covered, you may have to pay for damages out of pocket.
Companies that provide any type of professional service could be appropriate with professional liability insurance. Professional liability protects you against claims of negligence, misrepresentation, poor advice (even if you think it's good advice), or losses due to the services you provide. Accountants, lawyers, writers, photographers, designers, consultants, and many businesses should consider liability coverage. If your company owns or rents a property, commercial property insurance may be a good decision.
Just as homeowners insurance protects you and your property from losses caused by fires, burglaries, and other covered incidents, your insurance policy would cover losses up to the policy limits. Most companies wouldn't want to buy this coverage on their own. It pairs well with general liability insurance and other commercial insurance. If you purchase multiple policies from the same insurer, you may qualify for discounts.
General liability insurance protects you from claims related to business operations. If someone is injured on your business property or if you damage someone's property, this insurance covers the cost of your defense and any damage that is granted. Any company that works directly with customers needs general liability coverage. This type of commercial insurance protects your company's assets from damage or theft.
If your office is damaged by a fire or if your computer equipment is stolen, this insurance will reimburse you for the cost of repairs or replacement, as well as the loss of income. Any company with physical assets needs commercial property insurance. For example, let's say you own an accounting firm and your office is being robbed. Thieves steal your computer, printer and office furniture.
If you have commercial property insurance, your insurer will reimburse you for the cost of repairs or replacement, as well as the income you lost when your equipment was unable to work due to a lack of equipment. For example, let's say you're an architect. You design a house for a client, and they claim that the roof leaked during the first storm because your design was bad. If you are sued, your professional liability insurance will cover your legal expenses and any damages awarded to you.
Learn the 11 steps to starting a business Try Shopify free for 3 days, no credit card required. By entering your email, you agree to receive marketing emails from Shopify. For those just starting to work in insurance or looking to ensure they have the right coverage for their business needs, it's important to understand the different types. Workers' compensation insurance, or “workers' compensation” for short, provides coverage for medical expenses and lost wages if an employee is injured while working.
If you own or manage a business, business insurance offers important protections against losses due to accidents, errors, employee misconduct, lawsuits and other liabilities. Cyber liability insurance protects you from the cost of damage or injury that occurs as a result of a data breach. Cyber liability insurance would compensate them in the event of a claim and pay for free credit monitoring for affected customers. If you or one of your employees is involved in an accident, this insurance will cover the cost of vehicle repairs or replacement, as well as medical expenses and lost wages.
You need commercial insurance to cover the costs of an unexpected event, such as injury, fire, theft, or vandalism. By understanding the types of commercial insurance available, you can ensure that your business is properly covered in the event of an accident or disaster. Business owners and managers who want to review their policies can contact a Westfield agent today to learn about the options that best suit specific business insurance needs. D&O insurance protects members of its board of directors and executive leadership team if they are named in lawsuits against the company.
If the customer sues it, their product liability insurance will cover their legal expenses and any damages awarded to them. Here are the most common types of business insurance and what each of them covers so you can determine which one is right for you. . .