Commercial insurance protects a company’s financial assets, intellectual property, physical property and liability from a covered loss. There are many risks that a business is susceptible to, including fire, theft, lawsuits, property damage, injuries, loss of income and more.
Most Common Types of Commercial Insurance policies:
Business Owners Policy (BOP) -Combination of property coverage and liability coverage. The property coverage works like homeowners’ insurance. If the business is broken into, robbed, or vandalized, it will be covered to replace and repair the property to its original condition. If tools or equipment are stolen or destroyed by a covered loss, they too will be replaced.
General Liability– Protects the business owner against accidents, injuries, or property damage on the business premises or due to the business operations. Policy covers costs if a claim is filed against your business for bodily injury or property and advertising damage. If you do not have general liability insurance, you would have to pay for your own defense.
Many factors affect general liability rates, including the type of business operations, your experience in the industry, the location of the business, and claims history.
This policy is often confused with workers compensation policy. General Liability does NOT provide coverage if an employee is injured.
Workers Compensation– Provides compensation to an employee due to an accident, injury, or illness caused by the job. These policies are rated based on the type of business operations, and employee payroll. Business owners can opt out of the policy to reduce the rate.
These policies are audited so it is important to provide accurate numbers when estimating payroll. If you use subcontractors in your business, it is important to obtain proof of insurance, otherwise their pay will be calculated in your payroll resulting in higher premiums.
Commercial Auto- Provides liability and physical damage coverage for vehicles used for business purposes.
Commercial auto insurance is for any vehicle, that is used for business purposes. The number of vehicles you insure, as well as your employees driving record(s) will impact your rate.
If you are in an accident while driving to see a client or delivering goods, for instance, your personal auto insurance may not cover your losses. If you are unsure if you need commercial auto coverage, contact your personal lines insurance agent first. They should be able to tell you if the type of business operation you are handling can be covered under your personal policy.