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Types of Business Insurance
Insurance coverage is available for every conceivable risk your business might face. Cost and amount of coverage of policies vary among insurers. You should discuss your specific business risks and the types of insurance available with your insurance agent or broker. Your agency can advise you on the exact types of insurance you should consider purchasing.
General Liability Insurance
Business owners purchase general liability insurance to cover legal hassles due to accident, injuries and claims of negligence.
These policies protect against payments as the result of bodily injury, property damage, medical expenses, libel, slander, the cost of defending lawsuits, and settlement bonds or judgments required during an appeal procedure.
Product Liability Insurance
Companies that manufacture, wholesale, distribute, and retail a product may be liable for its safety. Product liability insurance protects against financial loss as a result of a defect product that causes injury or bodily harm. The amount of insurance you should purchase depends on the products you sell or manufacture. A clothing store would have far less risk than a small appliance store, for example.
Commercial Property Insurance
Property insurance covers everything related to the loss and damage of company property due to a wide-variety of events such as fire, smoke, wind and hail storms, civil disobedience and vandalism. The definition of “property” is broad, and includes lost income, business interruption, buildings, computers, company papers and money.
Property insurance policies come in two basic forms: (1) all-risk policies covering a wide-range of incidents and perils except those noted in the policy; (2) peril-specific policies that cover losses from only those perils listed in the policy. Examples of peril-specific policies include fire, flood, crime and business interruption insurance. All-risk policies generally cover risks faced by the average small business, while peril-specific policies are usually purchased when there is high risk of peril in a certain area. Consult your insurance agent or broker about the type of business property insurance best suited for your small business.
Some types of business insurance are required by law:
- If you are an employer you are legally obliged to have employers’ liability insurance to cover the cost of compensating employees who are injured or become ill through work
- If your business uses vehicles you are legally obliged to have commercial motor insurance
Other types of business insurance are optional, such as:
- Commercial property insurance, which covers the cost of repairing or rebuilding your business premises, or replacing your stock or equipment
- Liability insurance, which covers the cost of compensation claims following fault or negligence brought against you or your business by clients, customers, shareholders, investors, or members of the public
Types of liability insurance include:
- Public liability
- Product liability
- Professional indemnity
- Directors’ and officers’ liability
- Buying business insurance
Business insurance is usually sold as a package, combining a number of different policies under one premium. The types of policies you need, and the cost of your premium, will be based on a number of factors including:
- The nature of your business
- Its annual turnover
- The number of people you employ
- Your insurance claims history
Need to insure your business, investments, car, home and your life?
We can help make the process as simple as possible.