Basics on Business Insurance
Business insurance may aid in defending your organization from monetary loss brought on by mishaps, natural catastrophes, legal actions, and other unforeseen occurrences. In certain states, it may even be mandated by law.
Commercial insurance can seem complex, but it’s essential to understand what you’re buying. This guide will cover the basics of the types of coverage businesses need, including property insurance, liability insurance, and workers’ compensation.
Business Owner’s Policy (BOP)
BOPs bundle together commercial property and general liability coverage into a single policy. This method may be easier to administer than a collection of different policies, and it gives the piece of mind that comes from knowing that your company is most likely insured from substantial harm or a costly lawsuit.
Business insurance Suffolk County NY can include business interruption coverage, which pays for extra expenses incurred due to a fire or other disaster that shuts down your operations. The insurance can also help with the legal costs of a third-party bodily injury or property damage lawsuit.
Most insurance companies have conditions for businesses to satisfy to be qualified for a BOP, such as business class and revenue. Insurers also determine the value and type of insured property to determine cost. The higher the worth of the property and the greater the difficulty in replacing it, the more expensive the coverage.
General Liability
Any business that interacts with the public has a risk of lawsuits. Commercial general liability (CGL) insurance protects your business from the costs of a claim made against you by a third party. It covers bodily injury, such as when a customer trips over a box in your store and sprains their ankle. It also covers property damage, such as when an employee at a cybersecurity company accidentally damages a client’s computer while working in their home. However, it doesn’t cover claims related to work-related accidents or mishaps, which are covered by workers’ compensation and professional liability insurance.
With CGL, a single lawsuit’s legal fees and settlements could protect your small business. That’s why it’s typically included in a BOP, along with commercial property and business interruption insurance. However, you can also get a standalone policy.
Business Auto
A business auto policy (BAP) covers liability and physical damage for your company’s cars, trucks, trailers, vans, and other vehicles. This policy may also cover hired or leased vehicles or vehicles you or your employees use on business. Any company that employs automobiles must have this kind of protection. Many personal auto policies exclude business use and have very low limits of coverage, making a BAP an excellent alternative.
In addition, you can get an add-on for non-owned or hired auto liability coverage. This provides broader liability protection when your employees drive their cars or trucks on business or use vehicles not owned by your company.
Commercial Umbrella
To assist in covering losses and legal costs that exceed the limits of your underlying commercial liability policies (usually commercial general liability and commercial auto), including a commercial umbrella policy provides further liability defense. Umbrella insurance is generally written excessively and can “sit” on your commercial general liability, commercial auto, or workers’ compensation policies. It protects against catastrophic claims that can financially devastate a firm.
Umbrella plans may be tailored to work with your current risk management techniques without requiring underwriting or policy renewal and are typically issued in $1 million increments. Typically, your industry and your company’s level of public exposure determine the need for an umbrella policy. For example, businesses that allow the public on their property during business hours or use heavy equipment have a greater liability risk and may benefit from higher limit coverage. It’s vital to remember that an umbrella policy does not protect your company from employee-caused personal injury or property damage, necessitating the purchase of supplemental worker’s compensation or professional liability insurance.
