You know you need to insure your house and your car. Have you ever thought about insuring your business, though?
If the answer is “no,” you’re not alone. Forty percent of small businesses have never had any kind of commercial insurance.
But what is commercial insurance, and why should you worry about it for your business?
Read on to learn more about this insurance, the benefits it has to offer you, and how you can ensure you’re choosing the right policy for your needs.
What is Commercial Insurance?
First, let’s go over the basics of commercial insurance.
Commercial insurance is a type of insurance designed to protect businesses, as well as business owners and the people they employ.
Types of Commercial Insurance
There are several different types of commercial insurance available to cater to the various types of businesses that operate throughout the country.
The following are some of the most popular types of commercial insurance you may want to consider for your business:
- Property Insurance: This covers loss and damage to real or personal property, including things like fire damage or items lost to theft
- Liability Insurance: This type of insurance covers injuries that are caused to third parties while they’re on your business’s property
- Errors and Omissions Insurance: This insurance covers the cost of inadvertent failures or mistakes that cause an injury to a third party
- Malpractice Insurance: This covers business losses that affect a third party as the result of professional conduct falling below the standard of care
- Automobile Insurance: If you have cars, trucks, or trailers that are used as part of your business, this insurance will cover damage, theft, and/or injuries and damages that occur while someone is driving your company vehicles
- Directors’ and Officers’ Liability Insurance: This insurance covers the cost of lawsuits that may be filed against your business’s directors or officers
- Workers’ Compensation Insurance: This covers costs related to injuries your employees may sustain while on the job
You may not need to purchase all of these types of insurance. The specific policies that you purchase will vary depending on the type of business you run. It’s a good idea to have some kind of insurance policy in place, though.
Many small business owners opt to combine several insurance policies. This is known as a Business Owners Policy (BOP for short), and it combines popular options, like commercial property insurance and general liability insurance.
Benefits of Commercial Insurance
There are lots of reasons to invest in commercial insurance. The following are some of the greatest benefits that a good insurance policy has to offer:
- Comply with the law: If you have employees, you need to have some kind of insurance, including worker’s compensation insurance
- Protect yourself: You never know when an accident could happen; it’s better to be prepared than to have to spend a ton of money trying to clean up the mess later
- Maintain credibility: Your business will appear more credible and attract more (and better) customers if you’re properly insured
- Attract and retain employees: People will be more inclined to work with you (and continue working with you long-term) if you have insurance
As you can see, the benefits you’ll experience from investing in insurance are worth way more than the cost of a policy.
How to Choose an Insurance Policy
There are plenty of reasons to purchase a commercial insurance policy for your business. How do you know which policy is right for you, though?
If you’re unsure of what you need to consider when choosing a policy, here are some tips to keep in mind:
Know What You Need
Start by thinking about the specific type of coverage that you need.
Do you have a lot of expensive equipment that you need to protect? Do you have employees you need to insure?
The answers to these questions will help you determine which policy works best for you.
Pay Attention to the Details
When you’re looking at a policy, be sure to give it more than just a cursory glance.
Pay attention to the details so you understand exactly what it covers. And don’t forget to read the fine print and look for any caveats that could come back to bite you later!
You may understand the details of one policy, but that doesn’t mean it’s the right one for you. Be sure to look at several different options (closely) so you can find the one that offers the best coverage.
Consider the Cost
Don’t forget to think about the price of your commercial insurance policy, too.
Pay attention to what kind of coverage you get for the price of each insurance policy. Consider, as well, whether you want to have a higher deductible and a lower premium or vice versa.
There’s no wrong answer here. It depends on how much money you have available and what you’re willing and able to spend.
Talk to a Professional
If you have questions or are still unsure of which kind of policy you ought to purchase, there’s nothing wrong with contacting an insurance agent.
They can give you all the information you need, and they may also be able to tell you about special deals or discounts.
This guide can tell you more about finding the right insurance agent to help you through the shopping process.
Find the Right Policy Today
You now have a clear answer to the question, “What is commercial insurance?”
You also have answers to other important questions, like “what are the benefits of commercial insurance?” and “How do I choose the right insurance policy?”
Armed with this information, are you convinced that you need commercial insurance for your business? If so, keep the tips listed above in mind to ensure you’re choosing the best policy.
If you need more advice on insurance, or on running your business in general, don’t hesitate to check out the Management section of our website. You’ll find lots of great information here on everything from insurance to legal help and accounting tips.