How It Works

No one size fits all business policy exists. Typically, the business owner meets with an insurance agent to develop a custom policy that meets their needs. This could include all or any mix of the coverage types.

Different Types of Coverage

Five main types of business insurance exist. These are; professional liability insurance, property insurance, home-based businesses, product liability insurance, and vehicle insurance.

• Liability insurance pays out for negligence claims stemming from performance issues, product failures, cases of libel and slander, etc. The insurance agent will design the policy to meet the specific industry’s concerns.
• Property policies insure the company’s equipment, furnishings, inventory, and signage against common named perils such as fire, tornado,  or theft. It does not cover two mass-destruction events – earthquakes and floods. Each requires its own policy.
• A home-based business requires a policy to cover equipment and inventory against common named perils. If you hold meetings or entertain clients at your home for business, a liability policy is also recommended.
• Any business that makes a physical product to sell needs product liability insurance. It pays the damages from a lawsuit incurred due to a faulty product.
• Commercial auto insurance with full coverage protects the business owner from damage to their vehicles, others’ vehicles, and liability for damages or injuries they or a named driver cause.

Major Benefits

For any size business, the main benefit of business insurance is the guaranteed fiscal ability for the business to survive an accident or negative event. It reduces business risk and can make it easier for a company to obtain a bank loan or line of credit.