What is a Commercial Insurance Policy?


As a small business owner, you may be thinking: What type of business insurance do I need? Although the answer may vary depending on the type of business you are engaged in, most small business owners should consider several types of commercial insurance policies.

Commercial insurance can help companies protect against risks that may affect their success. Certain types of commercial insurance protect the reputation and well-being of an organization, while other types of commercial insurance protect the financial aspects. It is different from life insurance because commercial insurance covers multiple stakeholders and employees, and has a higher coverage limit.


Different types of Commercial Insurance Policies for Small Businesses.


There are different types of commercial insurance policies for small businesses. Some as follows:


General Liability:

Suppose a customer is injured at your workplace because of something you or your employees did or did not do. In this case, general liability insurance aims to cover potential medical expenses and related legal expenses. This type of insurance can also cover “advertising damage”, which may include crimes such as copyright infringement and defamation.


Property Insurance:

Commercial property insurance covers your building and its contents, as well as any impact on your business income in the event of damage due to fire, theft or natural disasters. Property insurance can be “specified risk”, “public risk” or “special”.


Business Interruption Insurance:

Big storms, local power grid problems, and even hacking incidents can disrupt your business processes. With business interruption coverage, you can ensure that your business is covered during the event. This insurance is designed to protect your business during the underwriting event and can replace the funds you should have earned or provide funds to temporarily operate in other locations.


AmTrust’s standard business owner policy (BOP) includes the above three types of insurance: general liability insurance, commercial property insurance, and business interruption insurance. BOP is a common insurance solution for small businesses because it can save costs for some of the most common corporate liabilities. BOP coverage makes it easy to maintain all common coverage for a business like you, no need to think about it. BOP does not manage multiple policies from multiple providers, it means that you have one policy, one provider, and a simple process to cover claims.


Workers’ Compensation

Small business owners can convince themselves that they do not need additional workers’ compensation fees. They may think that their company will never be hurt, and even if it happens, they will pay for it out of their own pockets. But workers’ compensation insurance is absolutely necessary for any small business.


Without proper workers’ compensation policies, the damage caused by work-related injuries could exceed thousands of dollars, or even millions of dollars. Without adequate insurance, employers will face punitive damages, painful and painful lawsuits, and potentially astronomical medical expenses.


For companies with more than one employee, workers’ compensation insurance is usually also mandatory (check local requirements). If you compare the cost of workers’ compensation policies with the potential costs of litigation, it makes sense to proactively provide appropriate insurance, because workers’ compensation policies usually cover out-of-pocket expenses to medical care—which can bring huge benefits to companies. Even in the most cautious and safe working environment, accidents that cause injuries can and do occur. No matter how impossible it seems, it is best to provide insurance and be prepared for any accident.


Commercial Auto Insurance

Why do small businesses need commercial auto insurance? Small businesses have a lot of expenses. It is expensive to hire workers with fair wages, generous benefits and stability. But it is wise to ensure that your employees and equipment are economically and medically protected.


Employment Practices Liability Insurance (EPLI)

The reality is that any business faces employment-related claims and general property or liability claims. If you work with people, your company is a candidate for employment practice liability insurance (EPLI) coverage. EPLI provides it alone or in combination with existing policies, helping to protect the company from employee lawsuits alleging improper or unfair behavior. Even without knowing it, infringing on the rights of employees (or contractors) can have devastating consequences. EPLI can be claims-based or event-based insurance. Most EPLI insurance policies are based on claims, which means that the insurance comes into effect when a claim is made to the insured for the first time within the policy term.


EPLI usually covers legal defense fees and settlement or damage costs, up to the policy coverage limit, regardless of whether the employer resolves, wins or loses, but the coverage options and costs of EPLI policies vary greatly. Suppliers or customers, you should consider EPLI coverage. Unlike EPLI, general liability insurance generally does not protect your business from employment-related claims made by employees or suppliers. Every employer, big or small, may be the object of legal action taken by past, present and potential employees.


Cyber Liability Insurance

Small businesses often fall prey to identity thieves because they are generally less secure than large businesses. This is why it is important to have a cyber liability insurance policy, especially for small businesses. Cyber ​​liability insurance provides protection for certain losses caused by data leakage. During a data breach, customer data, such as credit card numbers, names, phone numbers, addresses, driver’s license numbers, medical records, and even social security numbers, may eventually fall into the wrong hands. The cyber liability insurance plan will protect companies from part of the expenses incurred due to data breaches, such as attorney fees and customer notifications.


Management Liability Insurance (D&O)

Management liability insurance, also known as directors and officers (D&O) liability insurance, provides protection for directors and officers if they are personally sued while running a business or non-profit organization. D&O covers expenses and damages (compensation and settlement) arising from allegations of misconduct and litigation against board members or officials of the organization. D&O policies can help companies reimburse attorney fees, settlement fees, and other litigation costs for defending directors. Directors or officers can become part of a company’s litigation, even if they are no longer a member of the executive team or no longer work for the organization.


Errors and Omissions Insurance (E&O)

E&O insurance is also called professional liability insurance. It aims to protect the business from the consequences of litigation caused by the error or negligence of the owner or employee. Companies that provide fee-based services must purchase E&O insurance because it covers certain situations that are not covered by traditional commercial liability insurance. Professionals in the real estate industry, lawyers, insurance-related professionals, financial brokers, and service companies such as architects, designers, and medical professionals should consider buying error and omission insurance.


Crime Coverage

Commercial crime insurance protects companies from the theft of money, securities, and other property by employees and third parties. This includes employee theft, electronic funds transfer fraud, fraudulent identity theft and customer property.

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