What Is Commercial Business Insurance? Plus 5 Key Benefits

Take a moment and think about all the hard work you’ve put into your business.

Consider the time it took to start, the energy you’ve expended and the funds it took not just to start but run successfully.

A lot, right?

By all means, you want to protect your investment, and this is exactly where commercial insurance comes in.

Commercial insurance is among the most important insurance policies you can have for your business.

But what is commercial insurance anyway, and why do you need it?

What is Commercial Insurance?

By definition, commercial insurance is coverage for a business.

It serves as protection against losses through unforeseen problems such as theft, property damage, liability, injured employees, workers’ compensation, or any business interruptions that are not planned.

What Does Commercially Insured Mean?

When a business is commercially insured, it means that it’s protected from all the above problems that may happen as long as the coverage is in force.

An insurance policy from a professional insurance company will always cover your business, regardless of the issues you face.

How much coverage you pay for depends on the commercial insurance you have.

Different Types of Commercial Insurance

Many types of commercial insurances can help protect your business from potential lawsuits, lack of compliance and losses.

Let’s look at some of the most popular commercial insurance policies.

Business Owner Policy

The business owner policy (BOP) bundles up several types of business protection into one, and it’s usually very affordable.

However, workers’ compensation, auto insurance and liability insurance are not included in the bundle, so consider the characteristics of your business to decide if BOP is the right policy.

Business Property Insurance

Property insurance covers damages to the business properties that include the structure where you conduct your business and inventory, including products, documents, warehouses, machinery and furniture.

General Liability Insurance

Businesses have a lot of liability.

Most businesses need general liability insurance, which covers an array of damages, from injuries to lawsuits and everything in between.

Commercial Auto Insurance

If you have business vehicles, commercial auto insurance will come in handy.

Your premiums will be determined by the type of vehicles you use, and the risks associated with the items you transport in those vehicles.

Workers’ Compensation

If you have employees, you undoubtedly need workers’ compensation to cover them if they get hurt on the job.

Most states mandate businesses with employees to have this insurance, but even if your state does not, it’s very important.

Other Types of Commercial Insurance

There are many other types of commercial insurance policies, which include:

  • Crime insurance
  • Commercial umbrella insurance
  • Cyber liability insurance
  • Equipment breakdown insurance
  • Business interruption insurance
  • Accounts receivable insurance

5 Top Benefits of Commercial Insurance

Running a business always comes with inherent risks.

Employees could get injured in your business, clients can file lawsuits and natural disasters could happen.

For these and many other reasons, it’s crucial that you get business insurance for your business.

Here are the top five benefits of carrying commercial insurance.

1. Prevents Business Downfall

What would happen in case of a natural disaster?

What if a fire broke out in your business and burns everything, from the building to office property?

How would you carry on with business?

Property insurance will help you start over, and business owner’s insurance will help you cover income loss.

2. Makes the Business Look Credible

Most consumers do their research before conducting business with a company, and one component they check out is whether a business is insured.

Business insurance assured clients that you are a credible business, and it’s safe doing business with you.

Most companies advertise as “licensed, bonded and insured” because it builds trust, and trust is crucial to the success of a business.

3. Protects the Employees

The most valuable asset your business has are the employees, not the products or the properties of your business.

Most business owners think it’s the equipment they take such good care to maintain and the brand they have built for years.

While all these are important, they are not possible without employees.

Protecting your employees is a crucial step that you must take by getting workers’ compensation insurance.

If you could also get disability insurance, then it will be just as beneficial for your business.

Protecting the employees also means protecting the company from liability claims and lawsuits.

Insurance also helps attract and retain qualified employees.

Most job seekers are always on the lookout for benefit packages that include health, life, disability and long-term care insurance.

If you have commercial insurance, your employees are provided protection.

4. There is Always a Possibility of a Lawsuit

We are living in a very litigious world where people get sued left right and center.

One broken contract, one accident, or one disgruntled employee and your business could go down.

Even if you were to win the lawsuit, the cost of legal defense could drag your business down.

You will always worry when something happens, but with liability insurance, you can save yourself the trouble and run your business without worry.

5. Contracts Require Insurance

If you intend to rent your business facility, you’ll need insurance, and if you intend to take business loans, the lenders will need your business insurance.

Some client contracts may also require insurance in case things go wrong, so business insurance is very important.

Commercial Insurance Summary

It’s safe to say that the future is unpredictable, and anything can happen.

It will be beneficial to you and your business if you have commercial insurance to back you up.

So what is commercial insurance?

It’s undoubtedly something you must get for your business.

Do you have more questions about commercial insurance?

Would you like to know more about which types of insurance will best suit your business?

How about you get in touch with us, and we’ll guide you through it.

You may also check out our website for more information about insurance.