There are several different types of commercial insurance. There is commercial car insurance, commercial liability insurance, errors and omissions insurance, malpractice insurance and directors and officers liability insurance, just to name a few.
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Not every business is going to need every type of liability insurance. For example, if you don’t drive an auto for your business, then you won’t need commercial auto insurance. Or, if you work from home and no clients come onto your premises, then you probably don’t need liability insurance.
Most insurance agents consider commercial insurance to be an investment for a business. That is because commercial insurance protects you against many of the numerous unexpected issues an insurance company might face.
What Commercial Insurance Can Cover
This is by no means a comprehensive list of all of the available commercial insurance options. The truth is that there are far too many options to name them all right here. What’s more, some options get very specific, such as boiler commercial insurance or glass insurance and so on.
Here are a few of the commercial insurance options that a general business might consider purchasing.
- Commercial car insurance – This is only for businesses that have business owned vehicles. Personal car insurance does not cover the cost of accidents that occur while you are doing business. It is important to carry commercial car insurance on all company vehicles. If you have numerous vehicles, then you should consider fleet insurance as an option.
- Commercial liability insurance – What happens if someone slips and falls while on your property or a product falls off of a shelf and hits someone and knocks them over? If you don’t have liability insurance, then your business has to pay for those costs. Don’t forgo this important coverage if customers or clients visit your property for any reason.
- Errors and omissions insurance – Sometimes you sell a product only to find out that there is something defective or dangerous about it. Errors and omissions insurance protect you against lawsuits as a result of a product or a service not being exactly as advertised.
- Malpractice insurance – This insurance isn’t just for doctors. When you provide a service to someone and it doesn’t meet their expectations, you could be open to a malpractice lawsuit.
- Directors and officers liability insurance – From time to time the upper management at a company is targeted in a lawsuit, either because they are directly responsible for a service or product not being right or simply because they are the top of the food chain in the company.
- Business interruption insurance – This insurance can cover salaries, taxes, and rent if your business has to close its doors temporarily due to a loss due to theft or acts of nature.
It is important to note that many of these insurance types, such as liability, errors and omissions, malpractice and directors and officers insurance cover the costs of getting sued; of course, they don’t prevent the action from happening.
For example, Jane Doe falls at your office because you left a box in the middle of the walkway. Jane sues your company but, because you have insurance, your insurance company pays. Your insurance company will also cover any court costs if a settlement cannot be reached with the complainant.
Your Legal Obligations for the Purchase of Commercial Insurance
By law, most business are not required to carry any type of commercial insurance with the exception of commercial auto insurance. Unfortunately, because there are no laws in place, many companies choose to forego this important insurance and suffer catastrophic loss when someone is injured on their property or their products or services come under fire.
In many cases, if you have a business loan your lender will require you to carry certain types of insurance, depending on what type of business you have. In most cases, there will be a requirement for liability, although this may be negotiable if you have a business that doesn’t accept visitors on the property and you don’t have any onsite employees.
You need to read your loan agreement carefully to determine what your commercial insurance requirements are so that you carry exactly what you need too.
The type of insurance you choose to carry, outside of what a lender might require, is totally up to you. Some commercial insurance can be very inexpensive while others can be quite expensive. Many of the costs of business insurance depend on where you are conducting business, what type of services or products you offer and so on. This makes it difficult to determine what range you could expect to pay for different types of commercial insurance.
Where to Purchase Commercial Insurance
You can purchase commercial insurance through most insurance companies. If you choose to purchase multiple policies, then you can receive discounts for purchasing multiple policies.
You won’t find many insurance companies that specialize in commercial insurance, most offer a variety of insurance options for the home and business for you to choose from. However, there are some companies that are known for their great commercial insurance coverage.
Companies like the Chubb Group and CNA are specifically known for selling commercial insurance policies. Other top rated companies include State Farm, All State, and more. To find out who is offering commercial insurance in your area, start with our free quote tool. It is fast, free and easy to use.
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