What is Small Business Insurance?
Business insurance is a broad category of insurance coverages designed for businesses. It is also called commercial insurance. Businesses buy insurance to protect themselves against financial losses resulting from lawsuits or physical damage to company-owned property. A business that has no insurance may be unable to continue operating after a loss occurs.
Each coverage in your BOP has a coverage limit. A limit is the maximum amount your insurer will pay for a covered claim. It's also important to note that each coverage in a policy is typically subject to its own limit.
And, some coverages may come with a deductible. A deductible is the amount of money you pay out of pocket toward a covered claim.
Business Property Coverage
The property coverage in a business owners policy helps protect your business's building and its contents against covered perils. For example, if there is a fire at your business, a BOP may help pay for building repairs (if you own the building). This coverage also helps replace business property, such as office furniture, computers or machinery.
Keep in mind that business property coverage will be subject to a deductible and limits. You can typically choose your property coverage limits based on the estimated cost to repair, rebuild or replace your business's property. But, if your losses exceed the coverage limit you chose, you'll then need to pay out of pocket to finish building repairs or replacement of your business's property. It's important to note that having insufficient policy limits may also result in a penalty. This is a fine you'd need to pay for not purchasing enough insurance. To help avoid penalties, make sure you purchase enough insurance to cover your business and its contents.
General Liability Coverage
A business owners policy usually includes general liability coverage (sometimes called commercial general liability, or CGL). If a customer or visitor is injured at your business, and you're found liable, general liability coverage may help pay for the injured party's medical expenses. It may also help pay for legal costs if you're taken to court over an accident that occurred at your business.
Commercial general liability insurance is also subject to a coverage limit. That means if an injured person's medical bills exceed your coverage limit, you may have to pay out of pocket to cover the rest.
Business Interruption Coverage
Business interruption coverage, sometimes called business income coverage, is also typically part of a business owners policy. This coverage helps replace lost income and extra expenses if your business is affected by a covered peril.
For example, say a tornado or fire makes your office uninhabitable. Business interruption coverage may help pay for rent costs at a temporary office while repairs are made. Business interruption coverage may also help replace lost business income due to a covered peril. Similar to other coverages in a BOP, you will be subject to a limit. You may also be subject to a time period. This means the coverage may only last for 6 months, for example, so be sure to ask us about specific limits.
Additional Insurance Coverages for your Business
There may be additional coverages you can add to your business owners policy. Some available coverages may include:
- Data compromise coverage
- Business auto insurance
- Employment practices liability coverage
- Equipment breakdown coverage
- Outdoor property coverage
Talk to your agent about your specific business insurance needs, so they can help you customize your policy with coverages that may work for your situation.
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