Types of Business Insurance Coverage
Most Common Coverages of Business Insurance
Business insurance provides financial protection against risks like property damage, liability claims, and injuries, ensuring your business keeps running.
Comprehensive insurance coverages protect your business from unexpected losses, offering security for your property, employees, and future growth. Here is a list of prominent business insurance coverages:
Business Owner's Policy
A business owner's policy is an insurance package that combines essential coverage options to meet the requirements of small businesses. It usually includes property insurance to cover your physical assets, like your building, equipment, and inventory, so they’re protected if something happens. It also includes general liability insurance, which covers accidents, damage, or mistakes in advertising. A BOP is affordable and simplifies insurance management by combining these coverages into one plan.
Example: A local bakery experiences a fire that damages its ovens and inventory of baked goods. Under the BOP, the business gets compensation for the damage to the equipment and inventory and protection against legal liabilities if the fire caused injuries to a customer.
General Liability Insurance
General liability insurance (GLI) is a fundamental insurance policy designed to protect businesses from claims made by third parties due to incidents that occur on their premises or as a result of their business activities. It is essential for any business, regardless of its size, as it covers a range of risks, including bodily injury, property damage, and personal or advertising injury. GLI ensures businesses can handle legal claims and associated costs without jeopardizing their financial stability.
Example: If a customer is injured while visiting your store or office, GLI will cover their medical expenses and legal fees if they file a lawsuit. The policy also protects against damage during business activities, whether damage to a client's or your property.
Commercial Property Insurance
Commercial property insurance is a policy that protects a business's physical assets from damage due to events such as fires, vandalism, or natural disasters. It covers buildings, equipment, furniture, inventory, and other assets crucial for daily business operations. Unlike a business owner's policy, which combines multiple coverages, CPI focuses exclusively on protecting a business’s physical property. Businesses in all industries, including retail stores and office-based operations, can benefit from CPI.
Example: A fire breaks out in a warehouse, damaging inventory and office equipment. Commercial property insurance reimburses the business for replacing the damaged stock and repairing the facility, helping the company get back on its feet without financial loss.
Workers' Compensation Insurance
This insurance provides medical, rehabilitation, and wage replacement to employees who suffer work-related injuries or illnesses. It is a coverage for any business with employees. It protects workers and shields employers from legal liability. In exchange for receiving workers' benefits, employees typically give up the right to sue their employer. Workers’ compensation insurance covers various costs, including medical expenses related to the injury, disability benefits, and death benefits to the family.
Example: A construction worker falls from a ladder and breaks a leg while on the job. Workers’ compensation insurance covers the medical treatment for the injury, compensates the worker for lost wages, and ensures the worker’s job is held open during recovery.
Business Interruption Insurance
Business interruption insurance is a coverage compensating businesses for lost income and ongoing expenses when operations are disrupted due to natural disasters, fires, or other covered perils. This insurance is to help businesses recover from temporary shutdowns or interruptions in their operations, which can lead to significant financial losses. BII is particularly crucial for businesses relying on physical locations, such as retail stores, restaurants, or manufacturing plants, as it covers income loss.
Example: A manufacturing company’s production line is halted due to a fire. Business interruption insurance compensates for the lost income during the repair period and covers fixed costs, such as salaries and utility bills, ensuring the business can continue operating.
Crime Insurance
Crime insurance is designed to protect businesses from losses incurred due to criminal activities such as theft, fraud, embezzlement, and employee dishonesty. It is essential coverage for companies that deal with cash transactions or valuable inventory and are therefore vulnerable to theft or fraud. Unlike general liability, which covers third-party claims, crime insurance focuses on losses caused by criminal acts within the business, whether committed by employees, customers, or external parties.
Example: An employee at a local restaurant is caught embezzling funds from the cash register. Crime insurance covers the loss of funds and reimburses the insured organization for the stolen money, ensuring financial stability during the recovery period.
Liquor Liability Insurance
Liquor liability insurance is a specialized form of insurance coverage that protects businesses from legal and financial liability arising from the sale or service of alcoholic beverages. This type of insurance is crucial for businesses like bars, restaurants, nightclubs, and event venues that serve alcohol to customers. This type of insurance covers a wide range of claims, such as accidents or injuries caused by intoxicated patrons or property damage caused by the actions of intoxicated individuals.
Example: A customer at a bar becomes intoxicated and causes a car accident on their way home. The bar’s liquor liability insurance covers legal fees and settlements resulting from the lawsuit filed by the victims, ensuring the business is not financially devastated.
Cyber Liability Insurance
Cyber liability insurance is a specialized coverage that protects businesses from financial losses resulting from data breaches, cyberattacks, or other digital security threats. As businesses increasingly rely on technology and store sensitive customer information online, the risk of cybercrime has grown exponentially. This particular coverage is designed to cover a wide range of expenses that result from a cyber incident, including legal fees, notification costs, and customer support services.
Example: A retail company experiences a data breach that exposes customer credit card information. Cyber liability insurance covers the costs of notifying affected customers, providing credit monitoring services, and managing the legal expenses concerning the breach.
Commercial Auto Insurance
Commercial auto insurance is a specialized policy that covers vehicles used for business purposes, including cars, trucks, vans, and delivery vehicles. It protects businesses that use vehicles for transporting products, providing services, or traveling for business-related activities. Commercial auto insurance typically includes liability coverage, collision coverage, and comprehensive coverage, all of which are essential for organizations that rely on vehicles to conduct their operations.
Example: A delivery truck owned by a construction company is involved in a collision while transporting materials to a job site. Commercial auto insurance covers the repair costs for the truck and any damages caused to other vehicles or property during the accident.
Commercial Umbrella Insurance
Commercial umbrella insurance is a type of liability insurance that provides additional coverage above and beyond the limits of other business insurance policies. It’s extra protection for businesses when losses go beyond what their main insurance covers, like general liability, commercial auto, or employer’s liability policies. This type of insurance is for groups facing risks or lawsuits that could result in higher-than-expected financial damages. It helps secure the economic health of your business.
Example: A contractor faces a lawsuit after an accident at a job site causes extensive property damage and injury to a third party. The contractor's general liability insurance limits are exhausted, but their commercial umbrella insurance can cover the remaining costs.
Employment Practices Liability Insurance
Employment practices liability insurance provides coverage for businesses against claims made by employees related to employment practices, such as discrimination, wrongful termination, harassment, or retaliation. As workplace disputes and employee lawsuits become common, EPLI has become a form of protection for businesses of all sizes. It helps companies reduce the legal and financial risks of employee claims, ensuring they can defend themselves without the full economic burden of litigation.
Example: An employee sues a company for wrongful termination after being fired for reasons they claim were discriminatory. EPLI covers the legal costs, settlement, and any compensation awarded, allowing the business to handle the lawsuit without financial devastation.
Find the Perfect Business Insurance for You
Finding the perfect business insurance is simple with Insure C-Store. Simply enter your full name and phone number, then choose your business property type. Once you click submit, you’ll be directed to an easy-to-follow form asking for your personal details, type of business property, location address, and current insurance provider. Upon submitting, our agents will reach out to you soon.
Contact us today to get personalized options that protect your business against unforeseen situations.