What You Need to Know About Commercial Insurance

If you own a business, it's important to make sure it is protected from loss so that you don't lose everything if something unexpected happens.  There is no one size fits all commercial insurance policy.  The term 'commercial insurance' simply refers to any insurance policy purchased by a business.  There are many different types available, so you can find a policy to suit your company's needs whatever they are.  In fact, it is likely that your business will require more than one type of insurance.

Many of the things that businesses need to be insured against are the same things that individuals insure their homes and cars for:  damage, theft and liability.  However, businesses have additional concerns that must be addressed, such as lost income when the business is unable to operate for whatever reason.  Employee injuries can also be problematic for companies.  Insurance is needed to protect the employer against litigation by injured employees as well as to provide medical treatment as needed.

Commercial insurance is not hard to find.  Many of the companies that sell insurance to private individuals also sell insurance to businesses.  In fact, the insurance agent who handles your personal home and vehicle insurance is often a good place to start when looking for quotes for business insurance policies.

However, you should not stop there.  Just as you would compare prices and shop around if you were buying an insurance policy for your house or car, you should do the same before deciding on a company to insure your business.  In addition to looking for a good price, be sure to do a little research on the Internet or through the Better Business Bureau to find out what people are saying about the company.

Here are some of the many types of commercial insurance available.  Perhaps this list will help you think of something you didn't even realize you needed.

Property insurance pays for losses incurred as the result of damage or theft to the business's property. Depending on the policy you purchase, this can include real estate, inventory, equipment and other business assets. Make sure the policy you purchase covers everything your business needs.

In some cases, you may need additional riders in addition to the basic commercial property insurance policy. Some options that may be available to you are equipment breakdown coverage, builder's risk insurance, debris removal insurance, glass insurance, tenant's insurance, crime insurance and business interruption insurance.

Most of the above insurance riders are pretty self-explanatory, but there are some that require some explanation. Ordinance or law insurance provides coverage to pay additional costs required to rebuild that are incurred as the result of changes in building codes. If something happens to your building and you have to rebuild, you will have to meet the current building codes, which may result in a higher cost than rebuilding the structure as it was.

Inland marine insurance sounds like it applies only to shipping companies, but it actually provides coverage for any property that is being moved from one place to another. It can also provide coverage for damage to property owned by a third party, such as a customer, that is on your company's property.

Bonding is also a form of commercial insurance. When an employee is bonded, the bonding company is responsible for damages if that employee steals from the company.

Liability insurance covers the legal fees and damages incurred when someone sues your business. A general liability policy is enough to cover most businesses from lawsuits filed by customers or persons who are injured on company property. Most companies will also need liability insurance for their vehicles. This is usually included in commercial auto insurance policies.

There are other forms of liability insurance that may be required for specific types of businesses. Malpractice insurance is probably the most well-known of these. This insurance protects doctors from legal costs resulting from mistakes they make in treating their patients. Accountants, architects and other professionals whose errors can result in damage to their clients can also get malpractice insurance.

Errors and omissions insurance is similar to malpractice insurance, except that it covers inadvertent errors such as typos that result in damage, whereas malpractice insurance covers losses caused by poor judgment or intentional wrongdoing. Directors' and officers' insurance is a rider for liability insurance that protects the officers of a company from damages due to lawsuits.

State law requires most businesses to carry worker's compensation insurance.  This insurance usually protects the company from being sued for negligence related to an accident as well as paying for medical expenses incurred by the injured employee.  In cases where the employee is unable to continue working, worker's compensation insurance will sometimes pay for training to allow the employee to obtain a different type of employment.