If you’re feeling confounded over your choices of business insurance policies, don’t worry – you’re not alone. It can be overwhelming when you start thinking about everything that could go wrong – and what insurance you might need to protect yourself and your business.
Small and medium businesses can start with a basic business owners policy, which includes some property insurance and liability coverage. Depending on the type of business you own, you may need additional protection. Here is a closer look at property and liability insurance.
Commercial liability insurance
A business liability insurance policy pays for covered losses arising from real or alleged injury (that results in a lawsuit filed against your company), up to the limits of your policy. It may cover bodily injury occurring on your business premises or arising from your operations. This may include someone falling and breaking an arm or an appliance installation worker damaging a family heirloom.
Your policy can also protect you against libel, copyright infringement or wrongful eviction. For anyone owning a business, commercial general liability insurance is something you cannot do without.
Business property damage insurance
Property damage insurance protects your business against losses when property is damaged or destroyed. Property is considered to be any item that has value. It is classified as real property, such a building, or personal property, such as a computer.
Basic property insurance policies typically cover explosions, fire, lightning, windstorm, hail, smoke, aircraft or vehicle damage, vandalism, sprinkler leakage and sinkhole collapse. Additional coverage can be added for water damage; damage from the weight of snow, ice or sleet; breakage of glass; and falling objects.
Business owners policy
Sometimes known as a BOP, this policy combines standard levels of property, liability and other types of coverage (known as endorsements), which can be added to customize the policy and meet the specific needs of a business. A business owners policy is usually recommended for businesses with fewer than 100 employees and under $5 million in sales.