July 24, 2020

You know that health insurance, car insurance, and life insurance is important to you – personally. But, can you say the same for your business? If the answer is anything, but a resounding ‘yes’, it’s time you should be asking, “what is commercial insurance and what should I know about the coverage policies available?”

In this article, you learn everything you need to know about commercial insurance policies and the options available to small business owners. Discover the many liability issues that exist for businesses in the event they are not covered by a commercial policy, and which policy options your business needs. 

What is Commercial Insurance? The Small Business Guide for 2020

The smaller your business, the easier it is to put off the need to cover your business with commercial insurance. No matter how large or small the operation – if you own a business, you need commercial insurance. So, what is commercial insurance, and why is it so important for your business to have it?

Commercial coverage insures your business against a wide variety of risks associated with your day-to-day operations. Business policies are designed to provide coverage to the business, employee workforce, and owners. If you own a business without commercial coverage, all of the risk and liability falls on your personal insurance. 

It only takes one incident to financially destroy, not only your business, but your personal finance, credit, and more. Without business insurance all of the risks fall on your shoulders, placing you at direct risk for personal bankruptcy in the event of an unfortunate and unforeseen business-related accident. 

Unlike personal insurance plans, there is no ‘one-size-fits-all’ solution when it comes to business. Commercial business insurance is like an al-a-carte menu. You only pick the coverage options that your business needs. 

General Liability Insurance

Liability insurance is the bedrock of every business’s coverage, by protecting your business from going-under from legal fees and settlements. If your business is responsible for the injury or harm of an employee or bystander, liability insurance provides coverage for legal fees and litigation costs. 

Errors and Omissions Insurance

General liability insurance, however, does not cover legal fees associated with clients suing your business for harm or damages rendered through professional services. If you are sued for something that happens in the course of your professional service, you need professional liability, or Errors and Omissions insurance. 

Worker’s Compensation Insurance

Each state has different laws regarding workers’ compensation insurance. Even so, in all 50 states, every business has to offer some degree of coverage to employees in the event of an on-the-job accident. Also, by providing workers compensation, employees are contractually prohibited by law from suing your business for injuries sustained while on the job. 

Commercial Automotive Coverage

If your business involves a vehicle fleet of 10 or more vehicles, commercial auto insurance is essential. The same logic applies, for a business’s fleet of vehicles, as for your own personal car insurance. It protects you from paying the entire cost out-of-pocket for injuries or property damage sustained by anyone involved in an accident with the business’s fleet vehicles during business operations. 

Data Breach Insurance

Small businesses are one of the biggest targets of online theft. Most business owners assume that they are not a big enough fish to be targeted by thieves. In fact, small businesses are, often, the easy and profitable targets. When it comes to cybercrime, a single incident can bankrupt your entire business. 

Almost every business in the world stores important business information, client data, and sensitive financial records on dedicated servers. No matter how and where your business chooses to store its digital assets, data breach insurance provides vital coverage in the event of loss due to theft.

Business Owner’s Insurance Policy (BOP)

A business owner’s policy provides property coverage, liability, and legal protections from any lawsuits by employees or clients. Since, as a business owner, the ‘buck stops with you,’ a BOP provides much-needed protection. After all, just because the boss has to take responsibility, doesn’t mean everything is your fault, so a BOP offers coverage for the events that business owners can’t predict. 

Commercial Property Insurance

Even as many businesses move more and more operations to digital platforms, the essential things still require physical infrastructure, equipment, and inventory. Regardless of the size of your facility, equipment, or throughput, commercial property insurance protects the nuts-and-bolts of your business. Property insurance policies cover financial losses associated with theft, fire, smoke damage, natural disasters, and vandalism to which the business property falls victim. 

How to Find the Best Commercial Plan for Your Business

The question, “what is commercial insurance?” is answered by the needs of your commercial business activity. Some businesses need a policy that includes coverage for all of the above options, while others only require two or three. For detailed information on a policy that works for your business, contact a commercial insurance specialist.