Commercial insurance is a widely used term across the business industry. This type of insurance is a non-life policy and is simply protection that you buy to guard you from unforeseen circumstances or against business losses. Commercial insurance is a broad term where several different insurance policies are under its umbrella, offering varying protection depending on what type of business you own.
There is a term called Business Owners Policy (BOP) which is a type of commercial insurance that combines three policies (general liability, commercial property insurance, crime insurance) into one convenient package. Most small business owners choose this type of policy because of its broad coverage and low premium cost. Others, however, choose standard insurance based on their business type.
If you own a retail store, you will probably need an entirely different coverage compared to a doctor who needs to be protected from malpractice. Perhaps you are in the food industry who invests in buildings and equipment; you can also avail of BOP. However, there are certain building restrictions such as your office building should not exceed 10, 000 square feet or must not be more than six stories high.
Common Types of Commercial Insurance
General Liability Insurance
If someone files a lawsuit against you (personal injury, bodily injury, damage to property), your liability insurance coverage will pay for or cover the costs of resolving the lawsuit.
You have to remember that your business location and industry will play a large role in your insurance premium.
As the name suggests, this type of commercial insurance covers/protects against damages or losses to personal or real property. Property insurance is critical and even home based businesses must carefully think about getting one. It is important that you be upfront with the value of your properties when purchasing this type of insurance, or you may suffer the consequences because your policy is not enough to cover the damage.
If you own a business, even if it is a small one, you are probably going to hire 1-2 employees. No matter the number, every business or employer is required to get an insurance policy that covers their statutory obligations to employees. It is an ever-present challenge that employers have to face.
Choosing The Best Commercial Insurance
Here are several factors that you should consider when choosing the best type of commercial insurance for your business.
- What type of business do you own
- How many years in the business
- Gross annual revenue
- Does the business have its own vehicles
- Does the business own, rent its buildings where they operate from