Business insurance is a type of insurance that helps protect your business from financial loss. Businesses can buy coverage to protect themselves against the risk of liability or accidental injury and damage. The type of coverage you need depends on your business’ size and industry sector.
What is business insurance?
Business insurance is a contract that you enter into with an insurance company. The main purpose of business insurance is to provide financial protection for your company and its assets.
Insurance can be purchased for many different situations:
- Property damage due to fire, storm or vandalism.
- Personal injury protection (PIP) coverage;
- Medical payments coverage if someone gets hurt on the premises.
- If someone becomes disabled while performing duties at work.
- Protection against lawsuits filed against you by third parties.
Business insurance is a critical part of running a business. This can range from covering liability to protecting your assets and employees. They include:
General Liability Insurance
This insurance is the most common type of business insurance. It covers you against claims of bodily injury or property damage to people or their property, as well as third party claims related to injuries that occur at your business premises. General liability can also cover employees if they are injured on the job while working for you, even if they weren’t directly involved in operations at your site.
Professional Liability Insurance
This is a form of business insurance that covers you if you are sued for malpractice. It also covers you if you’re sued for mismanaging your business or making an error in judgement (like accidentally burning down your house). In addition to these general coverage types, there are many other specific examples of professional liability policies that can be purchased through an agent or broker:
- Errors in Design Coverage – This type of policy will help protect against product defects caused by errors during design phases.
- Errors During Production/Installation – This kind of policy protects against damages caused by defective products during production and installation procedures.
Business Owners Policy
A business owners policy covers the business owner and their employees. It also covers property owned by the company, such as money in a bank account or inventory items. The policy will pay for lost wages if you’re unable to work due to illness or injury.
Although it doesn’t cover other expenses like medical bills that aren’t related directly with your job. For example, if you get hit by an ambulance while walking down the street. Business owners policies often include coverage for some of those types of situations as well. But only if there’s time left on your policy before renewal date and no preexisting condition applies.
Workers’ Compensation Insurance
It protects the employees of your business. If an employee is injured on the job, this insurance will pay for medical bills and lost wages. It’s a requirement in most states, so if you don’t have it, they can sue you for damages. Because it’s required by law in many states, there are many coverage types available through this kind of plan:
- General Liability – This provides protection against lawsuits filed against your business by third parties who were harmed due to any negligence or carelessness.
- Property Damage – Covers damage to property owned by others caused by acts within their control (like drunk driving)
Product Liability Insurance
This is the responsibility of a business to ensure that its products are safe. Product liability claims can arise when a consumer or third party suffers injury due to a defect in one of your company’s products. If you’re not aware of any defects or manufacturing issues with your products, then this type of insurance may be unnecessary for you.
In order to understand what product liability covers and how much it costs, let’s look at some examples:
- A glass vase breaks because it was made with poor quality materials. The customer can sue if she suffers injuries from tripping over this piece.
- A child swallows several small pieces from an unfinished toy which causes him significant injury.
As you can see, business insurance covers a lot of different things. It’s important to have enough coverage in place to protect your business from the risks that come with running it. We’ve got some tips on finding the right policy.
This insurance covers you against claims of injury or damage to property, including legal fees and the cost of defending a claim. It can be important to have this coverage if you own a business, because it protects from financial loss.
All businesses need some form of liability insurance; however, there are different types of policies available depending on your needs (and budget). Some examples include:
- General Liability – Covers claims against the company itself for damages resulting from bodily injury or property damage caused by its employees
- Products Liability – Covers lawsuits alleging harm caused by defective products sold by your business
Property Damage Liability Insurance
This covers damage to your building and other property. It also covers the repair cost or replacement, as well as loss of business income if your building is damaged. Property Damage Liability Insurance protects you against claims of damage to other people’s property.
Examples of property damage include:
- Damaged or broken windows
- Slips and falls
- Flooding/water damage resulting from a breakage or leaky pipe (examples include burst pipes, sink drains that back up into the wall of your business)
- Fire damage at your business premises (e.g., smoke inhalation due to fire)
Product Liability Insurance
This insurance is a type of commercial insurance that covers you if your product causes damage or injury to a consumer. It can cover the cost of legal fees and settlements, as well as costs associated with recalls.
Product liability coverage protects companies against legal action brought by consumers injured by their products and services. This type of coverage is typically required when selling any kind of product that’s intended for public consumption (i.e., food items).
Professional Indemnity Insurance
If you are a professional, this type of insurance can help cover your legal bills in case of an accident. It also protects you from lawsuits brought by customers who have been injured while using your services.
Professional Indemnity Insurance covers:
- Medical expenses related to business-related injuries or illnesses; and
- The cost of defense against lawsuits based on claims arising out of bodily injuries or property damage caused by acts performed as part of your job duties.
Public Liability Insurance
This is a type of insurance that protects you from lawsuits, judgments and claims brought against you by others. It covers the expenses of defending yourself in court if someone was hurt on your property or injured while visiting it. The amount that public liability insurance costs depends on several factors, including:
- Your age (younger people tend to cost more)
- The size and location of your business (bigger companies with more employees tend to cost more)
- The industry in which you operate (more risky industries like construction will usually cost more than less risky ones like retail).
Business Interruption Insurance
It is a form of insurance that covers the cost of lost profits due to an unforeseen event such as fire or natural disaster. You can get this type of coverage through a company like AIG, which offers business interruption plans.
The policy protects you against losses that are caused by:
- Fires (including lightning strikes)
- Floods/flood damage
Key Man Insurance
This insurance can help your business survive the loss of a key employee. It provides financial protection for any employees who are vital to your organization, such as executives or managers, in case they leave due to illness or injury.
Key man insurance also protects against equipment loss or other assets that have been depreciated over time. This type of coverage helps ensure that you’re not left with liabilities in place while trying to replace lost property (like furniture) at a time when business needs are high and cash flow is low.
Errors and Omissions Insurance (E and O)
E and O insurance covers you for errors and omissions. This means that if a third party makes a claim against you, your insurer will cover any losses incurred as a result of their mistake.
How much should I get? This is a case-by-case decision but it’s always good practice to consider how many employees are on the policy.
In conclusion, business insurance covers a wide array of important risks for businesses. Not only does it protect you from lawsuits and claims involving your business, but also protects employees as well. While there are many different kinds of insurance policies available on the market today, we hope this article has helped explain how these policies work!