Business General Liability and Commercial Property Insurance

You want to be covered in the event of an accident. Business insurance protects your company from financial loss in the case of a crisis or an unforeseen occurrence. There is no such thing as one-size-fits-all business insurance, but many businesses will benefit from a general liability policy and other more specific insurance riders to protect their people, property, and equipment.

Key Takeaways:

  • Whether you work in retail, construction, or finance, most business owners require business insurance
  • Business insurance can help you secure the livelihood you’ve worked hard to establish against accidents and loss
  • While almost half of businesses have never had insurance at all, all it takes is one major accident or lawsuit to cause irrevocable damage, as even the cost of dealing with a single slip-and-fall accident could be as much as $25,000

There are numerous kinds of business insurance, each designed to protect your company from a specific financial risk. Business insurance can help keep your firm solvent when events happen, from litigation to vehicle accidents and natural disasters. 

The main point to remember is that while your business may never need insurance, if an accident ever happened and you weren’t insured, it could result in a total loss or restructuring of the business if the total costs exceeded your ability to pay. 

What insurance do small businesses need?

Most businesses require general liability insurance, and your state’s regulations may demand workers’ compensation and commercial auto insurance as well. However, depending on what your business does, where it operates, the kind of assets you have, and other considerations, you may require other forms of coverage or benefit from them, in any case.

What Most Insurance for Business Covers

Business insurance can protect you from a variety of issues. It ranges from simple to comprehensive, so choosing coverage that effectively safeguards you best at the best price is only going to be possible by researching in advance and shopping around.

The following are some of the most typical characteristics of a business that insurance can cover and protect:
  • The lives of the business owners
  • Key employees’ lives
  • An employee group’s lives
  • Owners’ and employees’ long-term and short-term incapacity or absense from work
  • Owners and employees may be held liable for injuries sustained
  • Building and machinery, property and casualty insurance
  • Liability and damage to commercial transportation
  • Product liability
  • Employee health insurance protects employees from illness and injury
  • Workers’ compensation for lost wages due to injury

Business Liability Insurance

Your company is safeguarded by commercial general liability insurance (CGL) in the event that a claim for bodily injury or property damage is made against it. Your business has the potential to affect people’s lives on a daily basis, including customers, clients, employees, and members of the public. 

And at any time, one or more of these individuals could file a lawsuit alleging that your company has damaged their property or caused them bodily harm.

What Is Covered by General Liability Insurance for Businesses? 

Commercial general liability insurance provides coverage for a number of claims for damages that may arise from: 

  • Injuries sustained while on your property, such as slip-and-fall accidents 
  • Bodily harm or property damage to a third party brought on by your work, your products, or the actions of your employees 
  • Liability assumed by third parties in clearly outlined contracts 
  • Libel, slander, or disparagement of a company 
  • Your advertisement violates a copyright or registered trademark

Commercial Property Insurance

Commercial property insurance protects against physical property damage or loss due to theft, such as an office space or inventory. It also protects against natural disasters, which can cause damage to your building, inventory, equipment, or other property.

Some causes are typically excluded, such as flood or water damage, but you may be able to add policy riders that extend your coverage if you face specific risks depending on your needs.

Business Owner’s Policy (BOP) Insurance 

A BOP combines fundamental insurance coverages at a low cost and provides coverage for the majority of significant property and liability risks. A BOP typically includes business interruption insurance, which compensates for income lost as a result of an event that disrupts normal business operations, as well as property insurance for the company’s owned buildings and contents. 

A BOP also includes liability insurance, which protects a company from the harm it might inflict on others, such as bodily harm or property damage brought on by subpar goods, improper installations, or subpar services.

According to the Insurance Information Institute, BOP does not cover professional liability, health and disability, vehicle insurance, or workers’ comp.

Worker’s Compensation Insurance

Most companies require workers’ compensation insurance to cover medical expenses, rehabilitation and missed income for employees injured on the job. Workplace injuries and illnesses can occur at any time, even if your employees work from home. 

Increased workers’ compensation claims and decreased production can have a significant impact on your bottom line. Most states require companies with a specific number of employees (which varies by state) to have workers’ compensation insurance and policies.

Commercial Vehicle/Car Insurance

Commercial auto insurance provides liability and physical damage coverage for cars, trucks, and vans used for business purposes. Commercial vehicles need a different policy because they frequently face greater risk than personal vehicles. 

Commercial auto insurance is not only used for heavy trucks and semis. Businesses that use automobiles to transport clients, carry tools, make deliveries or run errands may also require a commercial auto policy. If you have a landscaping, mowing, or construction business, you’ll need commercial auto insurance.

Your profession, coverage requirements, vehicles, drivers, driving history, and location are all risk factors that affect your commercial car insurance premiums. If your company needs more coverage or has a history of claims, you should be prepared to pay more than the average rate. Additionally, the best way to save on car insurance is to shop around, as prices vary greatly by company.

Contractor Insurance

To obtain licenses and land contracts as a contractor, insurance is almost always necessary. Additionally, if an accident does happen, having the appropriate insurance for your contracting business means you won’t have to pay out of pocket. 

You can complete your work and concentrate on the task at hand without worrying about those annoying “what if” scenarios if you have the appropriate coverage. Contractors liability insurance safeguards your company if you’re ever accused of causing an injury or damaging property at a job site, or if someone claims that your work error resulted in financial losses. Contractor liability insurance can help cover those costs.

This can also help if you’re a contractor operating under an independent LLC for liability and tax purposes.

Disability Insurance

In the event that a business owner or employee is unable to work as a result of a disease or accident that occurred outside of the workplace, disability insurance provides income to the affected party. For disabilities related to the workplace, workers’ compensation offers insurance. 

Disability insurance only pays for illnesses or accidents that happen away from the place of employment. Workers’ compensation disability insurance only pays benefits for illnesses and accidents related to work. 

Benefits include money to cover medical expenses and lost wages (typically two-thirds of normal pay).

Life Insurance

To ensure that your business continues to run and your loved ones have enough money to live comfortably in the event you pass away, life insurance can protect your family, business, business partner, and employees. 

Life insurance can give your business partner the money to buy out the company and give your family access to the money they need in the event of your passing. Having separate life insurance policies for your company and family will take care of your family’s financial worries as well as those of your business partner.

What is the cost of business insurance?

Your yearly fees are determined by the type of business insurance you select. The average monthly cost of business insurance is $70 for general liability and $115 for workers’ compensation. 

Factors affecting the cost of business insurance:

  • Type of business you are in
  • Size of your business
  • Amount of coverage needed

A business owners insurance policy, which combines liability and property coverage into a single policy, is also available. A business owner’s insurance policy costs an average of $105 per month.

How to Choose the Right Business Insurance

Choosing the business insurance plans that your company requires can be a difficult undertaking. 

Here’s how to check this one off your to-do’s and make the best choice:

Compile a list of your assets. You must understand precisely what your insurance must cover.

Consider your options. Every firm faces its own set of hazards. A jet ski rental company has quite different risks than a dog groomer, but both could be sued if something goes wrong – and both have a lot to lose from theft or natural disaster.

Think about your obligations. Professional services are exposed to several sorts of risk. When you supply these services, you are expected to be an expert. That implies that even honest mistakes or bad advice can land you in legal and financial problems. It is critical that you understand your responsibilities and have proper liability coverage for them.

Contrast coverage with cost. Money is usually a major consideration. It’s tempting to buy the bare minimum of coverage to save money on premiums, but this is a significant risk for small businesses. It’s worthwhile to look at comprehensive plans, supplementary coverage, and add-on features to discover what makes sense for your specific situation. 

Ironically, double coverage rarely costs twice as much as single coverage, so it’s worth considering.

Other Business Insurance Policies You Might Need

The insurance industry offers other types of business insurance that are tailored to your specific needs and risk exposure.

Cyber Attack Insurance

A policy called “cyber liability insurance” protects against financial losses brought on by cyber incidents. Cyber coverage insurance is a wise idea for any business that handles sensitive information or conducts business online, given the rise of cybercrimes like phishing, malware, security breaches, network security issues, and computer system breakdowns.

Employee Practices Liability

One of the sources of litigation that is expanding the fastest is employment practice disputes. Employment Practices Liability Insurance (EPLI) can lessen an employer’s financial exposure if a worker files a claim against the business. 

An EPLI policy is a type of commercial insurance that aids in paying for business losses brought on by employment claims. EPL insurance gives your business the defense it requires when facing claims of improper hiring practices.

Commercial Umbrella Insurance 

Some of your liability insurance coverage’ limitations are increased by commercial umbrella insurance. So, if a costly claim exceeds your policy limit, commercial umbrella coverage might help pay the difference if the source of loss is covered. 

A $1 million or $2 million umbrella policy can usually be purchased for a few hundred dollars. Making this investment now could save you hundreds of dollars later if you one day have to file a claim.

Conclusion: Insurance for Your Business

Businesses may require commercial insurance to help with the costs of liability and property damage claims. Without business insurance, business owners might be forced to cover expensive damages and legal claims made against their organization out of pocket. 

This could be a financially disastrous situation for many business owners, depending on the scope of an incident, lawsuit, or claim.

That’s why we think it’s best to prepare now, while you still can.

Frequently Asked Questions – Business Insurance

Does everyone need business insurance?

A general liability insurance policy protects the assets of your company by paying for defense expenses, financial losses, and settlements for covered claims up to the policy’s maximum. This coverage guards against monetary loss brought on by bodily harm, property damage, medical costs, libel, slander, defending legal actions, and settlement bonds or judgments.

These dangers might surface during typical business operations over the years. Small businesses may find them expensive, and many lack the funds to pay a liability claim out of pocket.Business General Liability and Commercial Property Insurance

Do you need commercial vehicle insurance?

You can shield yourself and your company from exposure to uncovered liabilities that arise from a serious accident by purchasing a commercial vehicle insurance policy. Similar to personal auto insurance, commercial auto insurance can be set up to offer financial safeguards against personal liability and other liabilities in addition to collision and uninsured motorist coverage.

Additionally, you can purchase comprehensive coverage, which will protect you from losses like fire, theft, hail, and floods that could result in damage to your vehicles. Compared to personal auto insurance, commercial auto insurance typically offers higher policy limits. Protecting your company’s assets from claims and other liabilities is the key objective here.

When should you get product liability insurance?

A general liability policy, which typically costs $500 to $600 per year, typically includes product liability insurance. Any legal obligations to third parties resulting from harm or injury caused by a product that a company sells are covered by product liability insurance, including physical harm, disease, accidently caused harm, or harm to a third party or their property. When you consider that the cost of business insurance over 30 years could be only $20,000, it might save the day if you’re ever liable for damages from an accident exceeding that amount.