What are the Different Types of Business Insurance?

There are numerous insurance choices available for company owners. Insurance shields your business from a variety of dangers that could arise in the course of daily business. It might be difficult to decide what type of business insurance you require, but we can assist you.

For their small business insurance requirements, many business owners begin with a Business Owner’s Policy (BOP). It incorporates three crucial protections:

  1. General liability insurance

  2. Commercial property insurance

  3. Business income insurance

However, we are aware that businesses can be unique. We’re here to assist you get the appropriate kinds of company insurance because of this.

You can also check out the business insurance calculator if you’re looking to estimate the coverage your business needs.

What are the Different Types of Business Insurance?

Eight Types of Insurance Policies That Small Businesses Can Consider

Depending on the sector of the economy you work in, you might need to obtain several types of insurance because some businesses can face several risks.

While there are other insurance options available, this article will focus on eight policies that many small businesses might get to help safeguard them against a range of dangers.

1. General Liability Insurance (GLI)

General liability insurance helps defend your company against allegations that it injured someone physically, damaged their property, and/or caused personal hurt, such as libel or slander.

2. Professional Liability Insurance

Having professional liability insurance can protect you from claims alleging that the services you rendered were defective. Errors and omissions (E&O) insurance is another name for this kind of coverage.

3. Commercial Property Insurance

The facility and equipment you own or rent to conduct your business are protected by commercial property insurance.

Be warned that damage caused by earthquakes or floods is not covered by this insurance. To help shield your company from potential natural disasters, you’ll probably need to get a different coverage, such as commercial flood insurance.

4. Business Income Insurance

Firm income insurance covers you in making up for lost income if covered property damage prevents you from operating your business. Therefore, you can utilize this coverage to subsidize recurring costs like rent, utilities, or wages. Business interruption insurance is another name for this kind of coverage.

5. Workers’ Compensation Insurance

If your employees become ill or injured while working, workers’ compensation insurance provides benefits for them. These advantages can support:

  • Paying for their medical expenses

  • Replacing most of their lost wages if they miss work to recover

  • Covering funeral costs if they lose their life due to a work-related injury or illness

  • Paying for ongoing care, like physical therapy

The majority of states mandate that companies with employees maintain workers’ compensation insurance. If you break the law in your state, you could be subject to fines, jail time, and criminal charges.

6. Data Breach Insurance

If personally identifiable information is lost or stolen as a result of data breach then data breach insurance can assist your company deal with the situation. Some insurers also call it cyber insurance.

Data breach insurance covers your cost in notifying affected individuals, offering identity-theft monitoring services, and/or creating a public relations campaign.

7. Commercial Auto Insurance

If you use company-owned vehicles for business purposes, commercial auto insurance can help protect you, your drivers, and your passengers. In the event that your business causes an accident, it would cover the cost for property damage and physical injury claims. This one important because if you cause an accident with a company vehicle, your personal auto insurance won’t aid with third-party claims.

8. Commercial Umbrella Insurance

Some of your liability plans’ coverage limits are increased by commercial umbrella insurance. So, if a claim is more than the policy’s maximum, your umbrella insurance would make up for the difference.