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Why do I need business insurance coverage?
As a business owner, you need business insurance to protect yourself, your employees, your customers, your assets and the future of your company. Think about the high costs associated with worker injuries, lawsuits, temporary business closures and data breaches. Without business insurance, any one of those examples could jeopardize the future of your business. Also, your state may require you to carry certain types of business insurance.
Types of business insurance products
Business owners policy
A businessowners policy (BOP) combines business liability, commercial property, business income, and equipment breakdown coverages into one cost-effective package for businesses. BOPs can be general in nature, or personalized to meet your business’s industry-specific needs. Standard BOPs include commercial property insurance, business liability insurance, business income insurance, or equipment breakdown insurance.
Business liability
This type of coverage can provide reimbursement for the resulting medical, repair and legal expenses if your business is held liable for injuring someone or damaging their property. For example, if a customer slips and injures themselves on your property, business liability insurance can help pay for any medical costs or lawsuits that may arise from the incident. Such a policy can also be supplemented with additional coverage endorsements—including fire legal liability and employment-related practices liability—based on your business’s unique risks and exposures.
Commercial property
This form of coverage can help protect your business’s building,
as well as any commercial property surrounding the building and
the contents within. These assets may include fencing, signage,
furniture, equipment and inventory. If a covered event—such as a
fire, burst pipe, storm damage or vandalism—damages or destroys
your business’s building or its contents, commercial property
insurance can recoup the cost of rebuilding, repairing or
replacing the property. Commercial property insurance policies
typically utilize one of the following valuation methods:
Replacement cost coverage pays for the cost of rebuilding,
repairing or replacing your business’s property as new (with
similar materials and quality), without any deduction for
depreciation. Actual cash value coverage reimburses your business
for the cost of replacing the damaged or destroyed property, based
on the depreciated value of the building or contents prior to the
incident.
Commercial auto
This type of coverage can provide protection for the vehicles your
business uses to conduct its operations—including cars, trucks,
vans and more. Commercial auto insurance typically includes three
forms of coverage:
Auto liability coverage can cover medical expenses and legal costs
in the event that you or an employee causes an accident that
injures another person or damages their property. Collision and
comprehensive coverage can recoup the price of repairing your
business’s vehicle(s) after an accident or other covered event.
Uninsured and underinsured motorist coverage can help pay for any
vehicle damages or injuries that result from an accident caused by
a driver who doesn’t carry adequate insurance (if any).
Workers' compensation
In the event that one of your employees experiences an occupational injury or illness, workers’ compensation insurance can cover their associated medical expenses and rehabilitation costs, and—in some cases—recoup a portion of their lost wages from the incident. This form of coverage can also help pay death benefits to an employee’s family if they are killed on the job. For example, if an employee injures themselves while operating workplace machinery at your business, workers’ compensation insurance could cover their resulting hospital bills and physical therapy costs. This coverage is required in most states, although specific policy standards vary.