Good insurance decisions begin with an understanding of business insurance and what it covers. You may or may not need all of these types of coverages, but you should know what they are so you can make the best decision for you company.
General liability and property. If someone is injured using your product or service, or while on your property, your liability coverage pays the damages and funds your legal defense. Property insurance covers your physical assets, such as your building, equipment, furnishings, fixtures, and inventory.
Umbrella policy. These policies provide additional liability coverage after the limits of the underlying policy are reached; essentially, they are an "umbrella" over your basic policies.
Commercial vehicle. These policies cover the vehicles your business owns and operates. If you or your employees use personal vehicles for business purposes, appropriate coverage may be available through a personal automobile policy, but check with your agent to be sure.
Professional liability. If you provide a professional service, this insurance protects you for negligence and/or errors and omissions that injure your clients.
Directors & officers. Popularly referred to as D&O, this coverage protects corporate directors and officers for wrongful acts typically described as bad business judgment.
Key man. This insurance pays cash to the company on the death of a key person, usually an owner or senior executive, to help the business deal with the financial impact of the loss and replace those services.
Business interruption. If you are unable to operate due to a covered peril, business interruption insurance replaces lost income, pays ongoing expenses, and pays the cost involved in setting up in a temporary facility.
Employment practices. This is a relatively new type of insurance which provides coverage for an employer against claims made by employees, former employees, or potential employees for such actions as discrimination, wrongful termination, sexual harassment, and other employment-related allegations
Destroyed or damaged records. If your business records, such as accounts receivable, are destroyed or damaged, this coverage compensates for your inability to collect income as well as the cost of reproducing the records.
Workers' compensation. Insurance that pays for medical care and physical rehabilitation of injured workers and helps to replace lost wages while they are unable to work. State laws, which vary significantly, govern the amount of benefits paid and other compensation provisions.
It's unlikely that you'll have separate policies for each type of coverage. Most insurers offer a range of package policies designed to cover a range of standard small business risks. Such packages can save you money--but they may also provide coverage you don't need or not provide a specific coverage that you do need, so read the policy carefully and be sure you know exactly what it does and doesn't cover.
General liability and property. If someone is injured using your product or service, or while on your property, your liability coverage pays the damages and funds your legal defense. Property insurance covers your physical assets, such as your building, equipment, furnishings, fixtures, and inventory.
Umbrella policy. These policies provide additional liability coverage after the limits of the underlying policy are reached; essentially, they are an "umbrella" over your basic policies.
Commercial vehicle. These policies cover the vehicles your business owns and operates. If you or your employees use personal vehicles for business purposes, appropriate coverage may be available through a personal automobile policy, but check with your agent to be sure.
Professional liability. If you provide a professional service, this insurance protects you for negligence and/or errors and omissions that injure your clients.
Directors & officers. Popularly referred to as D&O, this coverage protects corporate directors and officers for wrongful acts typically described as bad business judgment.
Key man. This insurance pays cash to the company on the death of a key person, usually an owner or senior executive, to help the business deal with the financial impact of the loss and replace those services.
Business interruption. If you are unable to operate due to a covered peril, business interruption insurance replaces lost income, pays ongoing expenses, and pays the cost involved in setting up in a temporary facility.
Employment practices. This is a relatively new type of insurance which provides coverage for an employer against claims made by employees, former employees, or potential employees for such actions as discrimination, wrongful termination, sexual harassment, and other employment-related allegations
Destroyed or damaged records. If your business records, such as accounts receivable, are destroyed or damaged, this coverage compensates for your inability to collect income as well as the cost of reproducing the records.
Workers' compensation. Insurance that pays for medical care and physical rehabilitation of injured workers and helps to replace lost wages while they are unable to work. State laws, which vary significantly, govern the amount of benefits paid and other compensation provisions.
It's unlikely that you'll have separate policies for each type of coverage. Most insurers offer a range of package policies designed to cover a range of standard small business risks. Such packages can save you money--but they may also provide coverage you don't need or not provide a specific coverage that you do need, so read the policy carefully and be sure you know exactly what it does and doesn't cover.
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