What Types Of Insurance Do Businesses Need?
Businesses come in all shapes and sizes. Each business is unique. Even among businesses within the same industry, individual businesses have diverse needs when it comes to insurance protection. That being said, there are certain types of insurance needs that many businesses, across all industries, share. These are some of the business insurance needs your business is likely to experience.
Business Owner's Policy
A business owner's policy is a general policy that offers a few specific protections for businesses. This is not designed to be the only business insurance protection your business needs but is intended to serve some of the basic protections that all businesses need, such as the following:
Business property insurance covers the physical buildings in which your business is located, as well as inventory, shelving, equipment, computers, etc.
General liability insurance offers basic liability protection for your business for bodily injury and property damage as well as legal fees to defend your business (up to the limits of the policy).
Business interruption insurance helps to protect a portion of your business income if your business is forced to close its doors while repairs for covered events are underway.
Some businesses feel that the coverage provided by the BOP is insufficient, especially when it comes to general liability coverage, and elect to purchase additional coverage amounts.
Business Auto Insurance
If your employees make deliveries, visit clients, or conduct business on behalf of your company in a vehicle, you need business auto insurance. If your employees operate out of personal vehicles on behalf of your business, you may wish to consider non-owned vehicle insurance coverage to provide protection for your business in the event your employee's insurance does not cover judgments made against your employee if an accident occurs.
Professional Liability Insurance
General liability insurance protects against injuries and property damage resulting from your work. Professional liability insurance, also called errors and omissions (E&O) insurance, protects against financial losses related to negligence, mistakes, and other specific issues related to your profession that are enumerated in your policy. Medical malpractice insurance, for instance, is a type of professional liability insurance.
One final example of business insurance needs that are common among many businesses is umbrella insurance. This insurance provides a type of additional liability protection that only comes into play if claims against your business exceed the limits of your other liability policies. For instance, if you have $1,000,000 in general liability coverage but the costs of your defense and the jury award against you equal $1,250,000, your umbrella policy would cover the additional $250,000 beyond your general liability coverage (deductibles excluded).
Because every business is different, it is important to work with an insurance agency that puts your needs as a business first and will help you identify the correct coverages and coverage amount for your business insurance protection.