Insurance coverage protects against different types of risks in every aspect of life. In business, the risks are many, which is where business insurance comes in.
Business insurance refers to a range of insurance coverages that protect against loss. There are many forms of business insurance on the market. Whichever you choose depends on your needs and the type of business you operate.
This post will take you through the most common types of business insurance and what they cover.
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1. General Liability Insurance
Your daily business operations can cause harm or damage. General liability insurance safeguards your business from operation-related claims arising from injuries, property damage, or reputation damage.
If your business deals directly with customers, you may want to consider this form of business insurance.
A client may get injured within the company premises and sue for compensation. If you have a general liability policy, it will cover everything, from legal fees to compensation.
2. Errors and Omission Insurance
The errors and omission insurance is a liability coverage that protects your business against harm and damages resulting from your services. The harm resulting from the provision of services usually includes negligence, errors, and malpractice.
Also known as professional liability insurance, this coverage is vital for businesses that offer services.
Remember, no business is immune to errors, and if a client feels like you didn’t do a good job resulting in a loss on their part, they could sue your business for negligence.
3. Commercial Property Insurance
As the name suggests, commercial property insurance covers business property, which includes the premises and everything considered business property, like equipment.
The coverage protects against a wide range of risks like fire, theft, and vandalism. However, each insurer has its own understanding of what risks fall within the coverage of standard property insurance.
Some providers may offer a comprehensive plan that covers a wide variety of property risks. Others may provide coverage for additional risks in the form of riders.
4. Data Breach Insurance
A data breach or cyber liability insurance protects your business from the costly damages associated with a data breach.
Basically, if your business is hacked and suffers property damage or client data leaks, the policy takes over the costs of legal disputes and compensation.
5. Business Income Insurance
Business income insurance, also known as business interruption insurance, is a cover that secures income from business operations when such operations are interrupted.
The cause of the business interruption is usually a disastrous event resulting in lost income.
Suppose your business suffers damages from a fire or earthquake, for instance. In that case, your business income plan compensates the loss of regular income provided the event that caused interruption is covered in your policy.
6. Product Liability Insurance
A product liability cover is similar to a professional liability cover, except it deals with actual products sold instead of professional services. This type of business insurance protects against damage and harm claims associated with your products.
If a client claims your products caused physical, financial, or property harm, you will need this insurance plan to take care of the resulting legal dispute or settlement.
Let’s say you sell a product that ends up being defective, causing injuries like beauty products or electronics. The financial loss could be disastrous if your business doesn’t have a product liability cover or a similar plan.
7. Commercial Auto Insurance
Commercial auto insurance is car insurance that covers vehicles owned by your business. It covers expenses from damages and injuries caused by company vehicles while on business operations.
Since personal car insurance doesn’t extend to third-party entities like your business, if you get into an accident with a company vehicle, your commercial auto insurance settles hospital bills and other costs related to the damages.
The policy also covers injury claims caused to others by company vehicles. If you’re looking to insure your commercial vehicle, consider visiting autopac kenaston to get an autopac policy tailored to your specific needs.
8. Home-Based Business Insurance
For individuals with established businesses at home, whether you are freelancing or selling products, home business insurance is meant for you.
The policy is not the same as homeowners insurance because if your business causes damages or harm (including professional harm like errors), your homeowners’ policy can’t cover the costs.
Home business insurance policies vary depending on the type of business and the risks you want to cover.
Final Thoughts
If you run a business, you definitely need business insurance to offset the costs of damages during an unexpected event. What form of business insurance you choose depends on your needs. You could buy a single policy or multiple policies to secure your business.
