Business Insurance
Business insurance is a means of protection for businesses in case of external accidents or other possible events that might lead to significant losses, but can’t be effectively predicted or controlled. Business insurance exists in many types, with each variation covering a specific area. It may protect from damage to property, legal issues and lawsuits, employee-related complications, and other instances. So, it’s important to explore business insurance options which are available for a particular organization to choose the most suitable one.
Business Insurance main features
As business insurance provides aid in case of losses, it’s crucial for companies operating in different areas, but especially for small businesses which are vulnerable to heavy expenses. It’s particularly challenging to said companies due to the fact that many owners of such businesses are personally financially exposed to losses.
For choosing the best option, it’s also important to assess correctly the possible risks a business is sensitive to. Those risks are different in each business area, and an amount of coverage of business insurance depends on such risks, so, it’s necessary to be evaluated individually in each case.
If it seems to be difficult for a business owner to assess it properly, there’s a possibility of hiring an insurance broker to perform such evaluation. It’s recommended to turn to experienced and certified specialists to get the best results. Lists of such specialists are usually provided by insurance departments of jurisdictions. In the U.S., The National Association of Insurance Commissioners, or NAIC, is an interstate organization aiding individuals and businesses in finding and choosing the necessary insurance programs and tools.
The main category of insurance products for covering business is Commercial Lines Insurance. It usually provides coverage for such risks as professional liability, property damage, product liability and some others, often depending on the type of business, as many business areas have their own specific features which might need coverage.
This type of insurance supports the economy, as it provides the opportunity for small businesses to keep running in a risky environment despite possible events causing significant losses, which might be too serious for business owners to overcome on their own.
Commercial Lines Insurance is opposed to insurance programs aimed at individuals.
Types of Business Insurance
As it has been stated above, business insurance may come in different forms. For instance, if a business is focused on manufacturing goods, it is possible for it to face unpleasant consequences of improper use of its products by some customers, or even of the outright harm caused by the product. In such cases, it’s worth to get secured in advance by a certain type of insurance program.
For a better understanding of different kinds of business insurance, it’s worth studying their most common types, which are the following:
- Property insurance, which provides coverage for facilities, stored products and equipment a business owns, although it doesn’t usually include cases of natural disasters and catastrophic events, which requires a separate policy;
- Professional liability insurance, which covers for various customer claims of wrongdoings, which are specific for each industry;
- Product liability insurance, which covers for lawsuits and cases when a product quality is claimed to be the problem;
- Business interruption insurance, which provides offsets in cases a business cannot operate due to external events that cannot be controlled and similar exceptional circumstances;
- Vehicle insurance, which covers all the transportation used in a certain business for its main activities.
It’s also important to additionally note that businesses operating from home might need separate insurance program to cover their risky areas, which are business insurance programs and not personal lines insurance.
