Whether you’re self-employed or own a small business, insurance is an important part of keeping your company afloat. Businesses require different types of cover depending on their structure and size, so it’s essential to identify the right markets before making a purchase.
Still not sure where to start? Here is a guide to business insurance; including the most common types of policy and which they are best suited to. Business Insurance can be complicated, but this guide simplifies the jargon into easy-to-understand concepts that will allow you to make an informed decision about what kind of coverage is necessary for your company.
It is commonly thought that small businesses don’t need Business Insurance because they might not have anything worth insuring. But Business Insurance is not just for big companies; there are Business Insurance options available to companies of all shapes and sizes, no matter how modest their assets may be. Businesses can ensure anything from property assets like machinery or office furniture, to more intangible assets like future profits and goodwill. Business Insurance is usually divided into three types; Business Interruption Insurance, Business Property Insurance, and Business Liability Insurance.
Commercial Property Insurance
This is most commonly used to ensure equipment and machinery, and Business Liability Insurance is designed to protect against claims of negligence. Businesses also need Business Auto Insurance (also known as commercial vehicles) and Employer Liability insurance. Business property can be insured in two ways: on the basis of a risk or a named perils. An all risks policy is designed to cover any damage or loss to your Business Property (such as machinery and computers) and has no limitations. A named-perils policy is more limiting; it covers only those losses listed in the policy – usually fire, theft, and vandalism – although exclusions such as war and nuclear disaster may also be included.
Business Interruption Insurance
This will cover your business income if you are forced to shut the doors owing to the destruction of your building or some other unforeseen event that makes it impossible for you to operate from that location. Business interruption insurance ensures lost profits as a result of these events by reimbursing your business for those losses, allowing you the time necessary to rebuild and rebrand.
General Liability Insurance
Business liability insurance (also known as commercial general liability) protects a business from financial liabilities that arise from accidents on business premises, products sold/manufactured by the company, injuries sustained by customers or employees, misrepresentations made about a product or service which result in injury or other losses.
Commercial Auto Insurance
This is similar to personal car insurance but specifically tailored for small businesses who own work-related vehicles. Business auto insurance will cover your liability if you are involved in an accident while driving a business vehicle, and can also provide coverage for the physical damage to your vehicle and its contents.
As Business Insurance can be tailored to fit the specific needs of your company, it is important to consult with an expert to ensure that you have the right coverage in place. By taking the time to understand the different types of Business Insurance available, you can be confident that your business is protected from all eventualities.