Commercial Insurance 101: Types of Business Insurance
Most people think of skipping business insurance to save money. 
But when disaster strikes, you’ll spend a lot more money on repairs than you would have by having the right insurance policy. Types of business insurance vary based on your industry and the size of your business. Check out this guide to choosing the right business insurance for your organization.
Types of Business Insurance
As a business owner, you eat what you kill. While this is thrilling to some, it provides too much risk to others.
If you have investors to satisfy, for example, you might not want to gamble with your business outcomes by leaving your company unprotected. There are also legal insurance requirements by the federal and state governments if you have employees.
According to the Small Business Administration, businesses with employees can’t legally operate without worker’s compensation, unemployment, and disability insurance. These types of business insurance help protect both you and your employees.
If something were to happen to an employee while at work, you want to be sure your business isn’t sued beyond what you can afford to payout and that the employee receives the care they need.
Here are a few other types of business insurance that can help keep your business protected.
Business Interruption
If there’s a natural disaster, you’ll need to temporarily shut down your business to deal with damages and repairs. What happens to the income you lose because your business isn’t in operation?
If you are covered by a business interruption insurance policy, you’ll receive compensation for lost income during this time. The amount you receive is based on pre-disaster financial records.
This policy includes coverage for operating expenses like your commercial lease or mortgage payments. The great thing about business interruption insurance is that you can file claims even if your business hasn’t completely stopped after a disaster.
General Liability
There are around 12 million contract lawsuits filed every year against businesses. In addition to contract disputes, there are tort cases that involve discrimination, slip and falls, and wrongful death.
General liability insurance is a way to protect your business from the threat of lawsuits that could bankrupt your company. This type of protection covers both you and any damages resulting from the use of your products or services.
Errors and Omissions
Mistakes happen to everyone, especially if you provide a consulting service. You may fail to alert a client of new regulations before a critical deadline that results in a fine or gives outdated tax advice.
One way to cover yourself from a potential mistake is through errors and omissions insurance. This type of business insurance is very important to have if you’re a consultant, financial advisor, insurance agent, or a lawyer.
But you don’t have to be in a finance-related field to benefit from E&O insurance. Even a wedding planner could find E&O insurance useful if mistakes made during planning could result in a major lawsuit.
The amount of coverage you receive depends on your industry and the number of past claims you’ve filed. If you have a history of filing E&O insurance claims, this could limit your options.
Cyber Liability
Even Fortune 500 companies fall victim to cyber-attacks. Cyber liability insurance protects your company from losses that come from security data breaches.
The protection includes any leaking of sensitive data that causes financial losses for vendors and customers. Cyber liability insurance covers the cost to repair and restore your cybersecurity systems.
Commercial Auto
Any vehicles you use for company business should be included in a commercial auto policy. Some personal auto insurance policies include commercial coverage but it’s ideal to have a separate policy that fits your business needs.
A commercial auto policy covers both the driver and the bodily harm and property damage of anyone else involved in an accident. The coverage pays to repair or replace your vehicle in the event of theft, flooding, accidents, or acts of God.
Start-Up Business Insurance
There is no insurance available that protects you from a lack of interest in your business idea. If you can’t get customers or maintain sales revenue, there is little your insurance policy can do to protect you from financial losses.
Business insurance policies can prevent losses from lawsuits, tax or government fines. Workers’ compensation needs to be one of the first types of coverage you get.
The minimum number of employees required before you need a policy varies by state, but the most common minimum is between 3 and 5. Workers’ compensation insurance policies explain things like who pays for hospital bills and how employee wages are handled if an employee can’t work due to injury.
How to Get Business Insurance
The key to getting the most appropriate types of business insurance is finding a knowledgeable agency. You don’t need to be an expert in business insurance. A good insurance agent can help you make the right choice.
Talk to us about your biggest worries. The business insurance policy you get today won’t necessarily be the same coverage you’ll need in five years.
Don’t fret about picking the perfect business insurance solution right away. You can adjust your coverage as needed over time as long as you don’t let your policy lapse.
Unpaid premiums sully your relationship with your insurer, so focus on policies you can easily afford to pay. For more information or to get a quote on a business insurance policy, contact us today.