4 Forms of Business Insurance Coverage

There are several types of business insurance coverage. With that in mind, how much and what type of business insurance coverage does your company need? In this article, the insurance experts at InsWeb outline the major forms of business insurance coverage.

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Property Insurance

Business property insurance is designed to protect structures and property against loss due to fire or theft. In some situations, it will also provide the money necessary to keep a business in operation while repairs are being made after a covered loss.

Additionally, home-based businesses often require this form of business insurance coverage in addition to their standard home insurance. Why? Home insurance policies typically do not extend coverage to home-based businesses, making it necessary to purchase property insurance.

Liability Insurance

This type of business insurance coverage protects the business owner against claims where the business is legally responsible for injury resulting from a defective product or lack of care that should have been exercised to protect another person or property. Claims of errors in service resulting in real or perceived losses, or accusations that the business (including its principals) is responsible for creating a hazardous environment that places others at risk are part of liability insurance.

This business insurance coverage also provides for medical bills accrued by customers and other guests injured while visiting the business.

Workers' Compensation

This business insurance coverage is designed to cover the medical costs and some portion of lost wages incurred by an employee injured on the job. It is a no-fault business insurance coverage and applies regardless of who was responsible for the injury. It also will compensate an employee's family in the case of death.

Businesses with more than three to five employees are required by law in every state (except Texas) to carry workers' compensation coverage.

Commercial Auto Insurance

Many businesses own vehicles that are used in business operations. Obviously, these vehicles need commercial auto insurance. Personal auto insurance usually excludes business-related activities, making commercial auto insurance a necessity.

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