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Business Insurance

Business insurance coverage protects businesses against losses caused by events that may occur during the normal course of business operations. There are many types of business insurance, including coverage for property damage, legal liability and employee related risks.

Companies assess their insurance needs based on potential risks, which can vary depending on the type of environment in which the company operates.

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Business insurance broadly refers to a class of insurance coverage intended for purchase by businesses rather than individuals.

Companies require insurance to cover potential property damage or to protect against lawsuits or contractual disputes.

Business insurance accounts for about half of the property casualty insurance industry in the United States and includes many insurance products known as "business lines."

Understanding business insurance

It is especially important for small business owners to carefully consider and evaluate their business insurance needs, as they may have greater personal financial exposure in the event of a loss.

If a business owner does not feel they have the ability to effectively assess business risks and the need for coverage, they should work with a licensed, experienced and reputable insurance broker. You can get a list of licensed agents in your state through your state's insurance department or the National Association of Insurance Commissioners.

Also known as business line insurance, these covers include property and corporate casualty insurance products. Line of business insurance helps the economy run smoothly by protecting businesses from potential losses they cannot sustain on their own, allowing businesses to operate when it is too risky.

Commercial policies may conflict with personal lines insurance.

Types of business insurance

Small business owners may consider several types of business insurance, including the following:

professional liability insurance

Professional liability insurance insures against negligence damages resulting from errors or omissions in performance. There is no one-off professional liability cover. Each industry has its own unique concerns that must be addressed.

property insurance

Property insurance covers equipment, signs, inventory and furniture in the event of fire, storm or theft. However, it does not cover mass destruction events such as floods and earthquakes. If your area is at risk of these problems, you will need a separate policy. Another exception is very valuable and expensive personal property - usually covered by purchasing an add-on to the policy called a "passenger". If there is a claim, the property insurance policy will either reimburse the policyholder for the actual value of the damage or the replacement cost to fix the problem.

Business from home

Homeowner's policies do not cover home-based business activities, like commercial property insurance covers commercial activities. If you run a home business, inquire about additional coverage for equipment and inventory.

Product efficiency guarantee

If your business makes products for sale, product liability insurance is very important. Any company can find itself in a lawsuit over damages caused by its products. Product liability insurance protects the company in such cases.

Vehicle insurance

All vehicles used in the business must be fully insured. At the very least, companies should insure against third party injuries, but comprehensive car insurance will cover the car in the event of an accident. If employees use their own cars for business, their personal insurance will cover them in the event of an accident. One big exception is if a person delivers goods or services for payment, including delivery personnel.

Business interruption insurance

Business interruption (or continuity) policies are a type of insurance that applies especially to businesses that need a physical location to operate, such as retail stores or manufacturing facilities. Business interruption insurance compensates a company for lost income during events that disrupt the normal course of business operations.

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