About Business Insurance

What is Business Insurance?

Business insurance, also called commercial insurance is an insurance policy that protects a business owner from any event that may cause disastrous consequences to the business, monetarily and/or physically.

 

It is mostly used to insure contents in a building or provide protection against a lawsuit that may have been the responsibility of the business. There are many different types of insurance coverage that can be tailored to suit your business needs, as described below.

 

Main Elements of Business Insurance

  • Property Insurance – Provides the business owner with coverage for any damage that may have resulted from a disaster, such as a hurricane, tornado, or fire. It also will cover any property in your possession that is not yours. For example, an auto body shop may keep cars overnight to be fixed the next day. If something happens to the building where the cars are stored, those cars will be covered. Property insurance will cover any location of the business, whether the property is rented, leased or owned.
  • Liability Insurance – Business liability insurance covers the business in case of any personal injury or loss caused by the business or an employee of the business. It is a type of insurance that protects against the company when being sued by another person or business.
  • Commercial Auto Insurance – This insurance coverage will protect a business’ vehicles, for example a car dealership or work vehicles needed to run the business.
  • Stop Gap Insurance – This insurance covers anything that workers compensation insurance doesn’t cover. It may be mandatory for business owners, in some states, to hold Stop Gap insurance.
  • Business Interruption Insurance – This is a type of addition to property insurance. If the property or a piece of machinery is damaged, the loss of income, while it is being repaired, may be significant to the income of the company. This covers the income loss incurred by waiting for the property or machine to be fixed

The Benefits of Business Insurance

Business insurance provides the confidence that everything you have built to become successful doesn’t go up in flames, literally. It reduces the risk associated with running a business. It also provides confidence in the employees and suppliers that their interest is also covered if anything unforeseen were to happen.

 

Business Insurance Statistics

According to a recent NFIB National Small Business Poll, natural disasters have impacted more than 30% of all small businesses in the USA. As well, the survival rate for companies without a disaster recovery plan is less than 10%, according to study done by Touche Ross.

 

Why would someone want Business Insurance?

Business insurance is extremely important in maintaining a responsible business plan. There are many factors that are out of your control, if you aren’t properly covered everything that you have worked for could be gone in an instant. You may currently have coverage on your building or machinery but when that property is damaged it is important to understand that your ability to produce income suffers. In turn, so does your supplier rating, employee moral and credit relationships.