Business Insurance Coverage: What Types Do I Need?

Failure to carry adequate business insurance coverage can have catastrophic consequences, including lawsuits, employee injuries and disasters. So how much and what type of coverage does your business need?

Most businesses need basic property insurance, liability insurance and workers’ compensation, but there is no one-size-fits-all business insurance policy. The amount of business insurance your company needs will vary depending on the nature of your business.

Property Insurance

Business property insurance is designed to protect structures and property against loss due to fire or theft. If you have a home business, you may think that your home insurance policy will provide the business insurance coverage you need. However, most home insurance policies do not cover structures in which business is conducted. 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.

Liability Insurance

Liability insurance 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 this business insurance coverage. Liability insurance also covers for medical bills accrued by others injured by the business.

Workers' Compensation

Businesses with more than three to five employees are required by law in every state (except Texas) to carry workers' compensation coverage. 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. Many workers' compensation policies also include return-to-work programs that will provide rehabilitation services to injured employees to help expedite the recovery process.

Commercial Auto Insurance

Many businesses own automobiles, trucks, vans and other vehicles that are used in business operations. Obviously, these vehicles need commercial auto insurance. However, if a small business owner uses a personal vehicle for business purposes, the owner's personal auto insurance may exclude it from coverage, making commercial auto insurance a necessity.

Business Owner's Package Policy

Need a hassle-free solution? A business owner's policy package includes property insurance, liability insurance and other business insurance coverage in a single policy. Business owner's policies also include income insurance to compensate the company for losses incurred due to disasters like hurricanes, floods and other catastrophes. Small to medium-sized businesses are usually eligible for this coverage.

What Makes Sense for Your Business?

There's no cookie-cutter solution when it comes to business insurance coverage. A business owner's policy may make sense for you, or you may be better-served putting together a customized business insurance coverage plan. Either way, it's important to protect what you've worked so hard to create with a business insurance policy. Get great business insurance coverage by comparing multiple business insurance quotes at InsWeb.com.