8 Key Types of Commercial Insurance Coverage to Get
According to the Insurance Information Institute, there are more than eight million small businesses in the United States with one thing in common: they would be wiped out by disaster or a lawsuit without the right insurance coverage. In 2022 alone, commercial insurance losses totaled $202,732,883,000.
Carrying commercial insurance can reduce the risks you know your business faces, as well as the ones unforeseen. However, commercial insurance coverage can be confusing, leaving you wondering which coverage is necessary for your particular company.
As a business owner, you want to see your company grow, and both you and your employees rely on it to provide your livelihood and help you take care of your family. Here’s what you need to know about the types of commercial insurance that are key to protecting your business.
What Is Commercial Insurance?
Commercial insurance, also known as business insurance, can provide coverage against financial losses in your business from unexpected events, such as:
Accidents
Burglaries
Thefts
Natural disasters
Lawsuits
Employee issues
You can obtain this insurance through a commercial insurance agent, who works to analyze the specific needs of your business and recommend the appropriate coverage.
8 Key Types of Commercial Insurance
You can buy many types of insurance from a commercial insurance agency. But these eight types of commercial insurance are essential for most businesses, regardless of the industry:
1. Property Insurance
Property insurance is designed to provide coverage for the physical building where you do business. It may cover the building itself, your inventory, and your equipment — including computers and furniture — from loss or damage.
2. Liability Insurance
Known as commercial general liability insurance, this coverage may safeguard your company against claims for bodily injury, property damage, slander, and false advertisement. These claims could arise from your business operations, services, or an employee.
3. Business Interruption Insurance
If your business is forced to temporarily close or relocate because of a covered hazard, business interruption insurance may pay for loss of income while you’re closed or the costs of relocating.
4. Workers’ Compensation Insurance
Most states require businesses — including small businesses with one employee — to carry workers’ compensation insurance. This insurance can cover the medical expenses and lost wages of an employee injured on the job.
Worker’s compensation insurance also has a benefit to you as an employer. Once an employee accepts insurance coverage for an injury, the employee typically waives their right to sue your company.
5. Commercial Auto Insurance
Commercial auto insurance pays for injuries and damages caused by your company’s vehicle or a personal vehicle used for company business. The insurance also can pay for damage to the vehicle.
6. Professional Liability Insurance
If someone files a claim against your company for negligence or faulty work, that claim may be covered by professional liability insurance. Other risks could include mismanagement of company assets and unlawful employment practices.
7. Crime Insurance
Your business may be able to recoup any losses from crime. These crimes may include fraud, burglary, theft, or employee dishonesty.
8. Cyber Insurance
Cyber insurance, or cyber liability insurance, may cover losses from a data breach or other cyber issues. For example, it can cover cyber extortion, investigative costs, regulatory expenses, and business interruption.
Find the Right Coverage for Your Business
Your company means a great deal to you, and many people count on it continuing to operate, even if an incident occurs. Talking to your commercial insurance agent can help you match the types of insurance necessary to effectively safeguard your business.