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Business Insurance Policies

In addition to risk assessment and other precautions, the best defense against crippling legal claims is the right combination of insurance coverage. Business insurance policies cover many potential liabilities, such as slip-and-fall accidents on company premises, employee claims, and injuries from defective products.

This section contains information and links to articles on various types of business insurance policies. For guidance tailored to your business, consider contacting an experienced attorney who can provide legal advice regarding insurance coverage.

Why You Need Business Insurance

Insurance covers business owners when an accident happens. Even the most careful small business owners may find themselves liable for a customer's injury or a misfortune that causes a significant loss for the business. The following circumstances could result in a claim against your company:

  • An employee claims they suffered a work-related injury and requests you pay their medical bills and cover their lost income.
  • A thief steals all of your company's computer equipment.
  • A salesperson defames a competitor, leading to a lawsuit against your company.
  • A customer slips on a wet floor and injures themselves.
  • A child suffers an allergic reaction after your company fails to list an ingredient on your food packaging.
  • Cybercriminals hack into your network and steal customers' information, and the customers sue you for the data breaches.

Insurance providers offer financial protection to policyholders for covered losses. With the right coverage and business insurance products, you may avoid the financial ruin of your company.

Business Owner's Policy

A common insurance policy for businesses of all sizes is a business owners' policy (BOP). A BOP often combines different types of insurance into a single policy. This, in theory, reduces the business insurance cost compared to buying several types of coverage.

Although a BOP may differ depending on the business insurance company you work with, it often provides the following types of insurance coverage:

  • General liability insurance (GLI): GLI protects businesses against many types of claims, including property damage or burglary. General liability coverage also protects against lawsuits brought against the business. GLI is also called business liability insurance.
  • Business income insurance: This insurance replaces lost income caused by property damage. For example, if a natural disaster destroys your business, business income insurance could cover lost income and financial losses until the business is again operational. This type of insurance is also called business interruption insurance.
  • Business property insurance: This protects your company's building and other property, like machinery and office supplies. It is also called commercial property insurance.

The nature of your business determines the type of insurance coverage and policy limits it needs. Small businesses with few employees may only need a small business insurance policy. A Fortune 500 company dealing with confidential customer data may have extensive insurance needs, such as cyber insurance, higher property coverage, and specific business insurance coverage.

Different Types of Commercial Insurance

This section describes several of the most common types of commercial insurance.

Property Insurance

Property insurance covers losses and damages relating to real or personal property. For example, it covers most types of storm damage, theft, vandalism, and other types of property damage.

Another form of property insurance is commercial auto insurance. It only applies to vehicles, as opposed to personal property or real estate. Commercial auto insurance also typically covers injuries sustained or caused in motor vehicle accidents.

Common variations on property insurance include the following:

  • Boiler and Machine Insurance
  • Debris Removal Insurance
  • Builder's Risk Insurance
  • Glass Insurance
  • Inland Marine Insurance
  • Ordinance of Law Insurance
  • Tenant's Insurance
  • Crime Insurance
  • Fidelity Bonds

Liability Insurance

Liability insurance covers injuries your business causes to third parties. For example, liability insurance may cover the claim if someone alleges they sustained a bodily injury when they slipped on your business's sidewalk. Liability insurance may also cover the cost of litigation resulting from liability claims.

Professional liability insurance coverage is similar but is a more specific type of liability coverage. It covers injuries your business causes while providing professional services. 

For example, suppose your business involves giving financial advice to clients. A client claims one of your employees misrepresented an essential fact in their financial briefing, and the client lost money because of it. The client decides to sue your business to recover their alleged damages. Professional liability insurance will likely cover the cost of the litigation and may cover the cost of the damages if a court finds the business liable.

Other common types of liability insurance include the following:

  • Errors and Omissions Insurance
  • Malpractice Insurance
  • Automobile Insurance
  • Directors' and Officers' Liability Insurance

Workers' Compensation Insurance

Workers' compensation insurance covers employee injuries they sustain at work. Most states require employers to provide some form of workers' compensation insurance. The workers' comp insurer typically covers the cost of an employee's wage loss benefits and related healthcare and medical expenses, if any.

Workers' compensation is essentially a tradeoff between employers and employees. In general, an employee who sustains a work-related injury will receive wage loss and medical benefits. In exchange, the employee often cannot sue their employer for negligence related to the injury.

For more information about workers' compensation, consider browsing FindLaw's section on Workers' Compensation.

Business Insurance Costs and Considerations

There are many types of insurance options available to business owners. The coverage cost depends on which insurance company you decide to work with, as well as the following factors:

  • The number of employees your business employs
  • The work your business conducts
  • Your business' location
  • The specific types of insurance coverage your business needs
  • The amount of coverage your business needs

An insurance agent can give you different business insurance quotes. They will ask you questions about your business and come up with a quote.

Business Insurance Claims

Although no business owner looks forward to making an insurance claim, it is essential to prepare for the worst. Suppose you arrive at your business on a Monday morning and find all your tools and computers missing. You call your insurance company to make a claim. The questions they may ask you include the following:

  • Do you know exactly how much property is missing?
  • Do you have a list of all your business property?
  • Do you have receipts for the missing property?
  • Who else have you spoken to about the apparent break-in?
  • Did anyone else have access to the property?
  • Did you take pictures of the business when you arrived?

Keeping records of your business property is just one of several ways to prepare to make an insurance claim. Proper accounting methods will help if you believe someone has embezzled money from your business accounts.

Insurance companies may deny claims for many reasons. For example, they can deny a claim for a fire if someone just so happened to remove all the valuable property from the building the night before. They may also deny a claim if you do not file the claim within a specific time limit, or if your insurance policy does not cover the damage you claim. Your liability policy will have more information about the claims it covers.

More Business Insurance Policies Articles

Contact an Attorney

If you have questions about insurance policies, consider contacting a business attorney near you. An experienced insurance litigation attorney can provide you with valuable legal advice regarding, for example, the following:

  • Different types of insurance your business needs, like employment practices liability or cyber liability coverage
  • Whether it is worth it to remove specific exclusions from your general liability insurance policy
  • How to prepare to make an insurance claim

If you believe you have an insurance claim, do not delay preparing to file it. For more help, contact an attorney near you today.

You Don’t Have To Solve This on Your Own – Get a Lawyer’s Help

Meeting with a lawyer can help you understand your options and how to best protect your rights. Visit our attorney directory to find a lawyer near you who can help.

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