Introduction:
There are a wide variety of insurance coverage options available to small business owners. This article will review the most common types of insurance sold to small businesses in the US. As small business owners ourselves, we've had to deal with many insurance companies over the years. It's important that you ask yourself what type of insurance your company needs.
In this article, I will try and answer that question by telling you what kind of insurance is sold to small-business owners and what it covers. Small business owners often fail to understand what types of insurance their small businesses need.
To do this, you must first understand the different types of insurance that can be purchased for a small business. The type of coverage you choose will depend on your specific needs and requirements. That said, they will still want coverage in necessary areas to protect their employees, customers, and assets.
Business Owners Policy
Business owners who own their own businesses are generally required to carry business insurance coverage. Business insurance policies vary, but they typically include protection for your personal assets and liability protection in case you cause injury or damage to others.
Coverage can include:
Personal property
Liability
General liability
Property damage (including fire)
Employment practices liability
An insurance policy for the business owner, provides cover for loss of profits, business interruption, and business property.
Business Personal Accident Insurance
Business personal accident insurance provides cover for work-related injuries, sickness, unemployment, and more.
Employer's Liability Insurance
Employers' liability insurance protects your business from lawsuits if someone is hurt or injured on the job. When you're starting a business, one of the most important things to do is get insurance.
The good news is that there are many types of insurance available for small businesses — and you can get coverage for your business through an independent agent or an insurance company.
Below are some of the more common types of coverage that small-business owners need to know about.
Business Owners Policy: This type of policy covers both personal injuries (physical injury) and property damage (loss of use) claims that result from operations on the insured site or vehicles used in the course of business. It also covers legal defense costs related to lawsuits filed against the insured by third parties or government agencies.
A business owners policy (BOP) is a type of commercial general liability insurance that covers the owner and employees or agents of a business who are involved in an accident or incident. Business owners' policies may be obtained at the same time as workers' compensation coverage.
Business owners' policies are also known as directors and officers (D&O) policies, professional liability insurance, or professional indemnity insurance.
Business Auto Insurance
Business auto insurance is designed to protect your business. It provides coverage for your vehicle, as well as liability and property damage, in case of an accident.
Business auto insurance typically includes:
Bodily injury coverage – this covers you and everyone in the vehicle for bodily injury to others that results from an accident
Property damage coverage – this protects your equipment and other items inside your vehicle from damage caused by an accident
Collision coverage – this covers the cost of repairing your vehicle if it’s damaged in a collision
Personal injury protection (PIP) – PIP has two components: medical payments and lost wages. This portion pays for expenses related to injuries sustained by people involved in an accident, including their medical bills. Lost wages can help you with things like childcare or transportation while you’re recovering from an injury or unable to work.
Business auto insurance is an essential part of the business owner's business. It provides coverage for your vehicles when you're traveling for business, and it can also cover damage to your vehicle caused by another driver. If your car is stolen or damaged in an accident, your policy will pay up to the full replacement cost of the vehicle up to the limits of your coverage.
You can buy policies from different companies that specialize in this type of coverage, including:
Geico General Liability Insurance Company
Progressive Direct Auto Insurance Company
State Farm Car Insurance Company
Business auto insurance typically covers:
- Liability for bodily injury or property damage caused by an insured vehicle in the course of a business use or operation conducted by the owner (the driver) or an employee of the owner.
- Bodily injury to any person while using an insured vehicle on public highways.
- Bodily injury or property damage caused by an uninsured motorist who collides with you while using your vehicle on a public highway (and this coverage will apply regardless of fault).
Professional Liability Insurance
Professional liability insurance protects your business against claims brought by clients, employees, and others. It covers you if someone is injured while on your premises or while using your equipment, or if they have a claim against you for something you said or did.
Professional liability insurance is also referred to as:
Dedicated professional liability (DPL) coverage
General liability coverage
Workers' compensation coverage
Professional liability insurance protects your company from the costs and legal risks associated with the actions of its employees, subcontractors, and agents. Professional liability coverage provides compensation to clients, customers, investors, and other parties who suffer losses due to your negligence or misconduct.
For example, if you are sued because of an employee's negligent act, professional liability insurance can cover the costs associated with defending against claims. If you fail to advise a client that their investment is at risk and they lose all of their money, your professional liability insurance will pay for any legal fees associated with defending against that claim.
The Business Owner's Policy (BOP), also known as commercial general liability insurance, protects your business from lawsuits filed by people who have been injured on your property or through their own negligence in the course of doing business with you.
The policy typically covers bodily injury and property damage claims made against you by customers and vendors, but it also provides protection for third parties who suffer injuries as a result of any activity on your property,
such as animals or vehicles owned by customers or vendors that become damaged while being operated at your location or while interacting with customers or vendors within your premises. You may have heard this coverage referred to as "CGL" - Commercial General Liability - but it is important to remember that this type of coverage is not limited only to those lawsuits filed against businesses;
Workers' Compensation Insurance
Workers' compensation insurance provides coverage for injured employees who are unable to work due to an on-the-job accident. Workers' compensation is usually required by state law, although some states have optional programs. If an employee is injured on the job, the employer will have to report the injury to workers' compensation insurance companies.
The employer pays a monthly premium based on the number of employees in the company and their average salary. The employer also pays a fee if there is a claim against the company's policy.
The benefit of workers' compensation insurance is that it covers medical expenses, lost wages, and replacement costs of your vehicle if you are hurt at work and can't drive it any longer because of injuries related to your job.
The benefit does not cover pain and suffering or punitive damages, but these types of damages may be covered under personal injury protection (PIP) or medical malpractice policies purchased separately from workers' compensation coverage or through an umbrella policy offered by your auto insurance company.
Workers' compensation insurance is designed to compensate employees who are injured on the job. Workers' compensation benefits include medical treatment, lost wages, and funeral expenses. Workers' compensation coverage is required by law in most states.
Employers that fail to provide workers' compensation insurance may be subject to heavy fines, damages lawsuits, and even criminal charges.
Workers' compensation insurance is purchased by small businesses that have employees working for them at least 20 hours per week - either full-time or part-time.
A worker's compensation policy covers both current and former employees of your business, as well as those who worked for you while they were employed elsewhere. The type of coverage you require will depend on the number of people employed by your company at any given time and on the nature of their work.
Property
Property insurance is a type of coverage that protects the value of your property against damage or loss. It also covers personal injury and health conditions that occur on the insured property.
Property insurance policies are more flexible than standard auto, homeowners, and renter's policies because they do not require a specific location to be named as an insured building. In addition, some property insurance policies offer discounts for small business owners who own multiple properties.
If you have a business with lots of assets and you want to protect them, choose a policy that covers all your assets, including inventory and equipment. This will give you peace of mind about potential losses due to fire or natural disasters in your business. Property insurance protects your personal property from loss or damage. It includes buildings, grounds, and contents.
In some cases, your business may be able to purchase additional coverage for items like vehicles, machinery, and equipment.
Unlike some home policies that provide a full replacement cost of lost or damaged property, small business property policies usually only pay out a percentage of the actual value of lost or damaged property. For example, if your business uses an old building with an assessed value of $50,000 and it is destroyed by fire, you may only be able to claim $25,000 as its replacement cost.
Your insurer will likely ask questions about how much money your business spends on replacing damaged assets such as computers and furniture; however, most insurers will still allow this type of claim for up to 10% of the actual value of lost or damaged assets.
General liability insurance
General liability insurance is the most common type of insurance sold to small business owners. General liability insurance covers businesses from lawsuits, claims, and other liabilities that might arise from their operations. The coverage typically pays for damages if someone is injured on your premises or if someone makes a claim against you.
General liability insurance can also cover legal expenses in the event that you are sued, including court costs and attorney fees. This type of coverage typically does not cover lost profits or property damage caused by a covered occurrence.
Other types of business insurance include:
General liability insurance policies cover you and your business for legal expenses, property damage, bodily injury, and other losses you may incur. The coverage is for claims that arise from activities that occur on the job site or at an off-site location.
The most common types of general liability insurance include:
Workers' compensation
Property damage
Bodily injury and property damage (BIPD)
General liability coverage is available in several forms: policy endorsements, add-on policies, and umbrella policies. A policy endorsement provides additional coverage above and beyond the limits of the standard policy.
For example, if a car accident occurs while your primary policy has $100,000 of BIPD coverage, an endorsement might provide $300,000 in BIPD coverage. Add-on policies are designed to provide additional protection beyond what's included in the standard policy. An umbrella policy provides secondary protection above and beyond any other form of insurance you may have.
Commercial vehicle insurance
Commercial vehicle insurance is for the driver of a large truck and other vehicles used in commerce. This type of insurance covers the use of your car for work, including commercial driving, towing, and hauling.
Commercial vehicle insurance is usually included as part of your liability policy. If you have this coverage and file a claim, the company that issued your policy will pay for damage to another person's property or injury caused to another person while you were driving.
Commercial vehicle insurance is a type of insurance that covers the cost of repairs or replacement of your truck, van, or SUV if it is damaged in an accident. It can also cover other commercial vehicles owned by your business.
Commercial vehicle insurance does not provide liability coverage for the driver or owner of a commercial vehicle. This type of insurance protects the business from losses resulting from injuries and property damage to others caused by a driver operating their vehicle.
Commercial vehicle insurance is the kind of insurance that you need if you own a truck or van. The type of commercial vehicle you own will determine what kind of coverage you need.
Types of Commercial Vehicle Insurance
There are two types of commercial vehicle insurance:
A policy that covers your business’s fleet of vehicles, including trucks, vans, and transit buses
An umbrella policy that covers multiple vehicles in your fleet
Commercial vehicle insurance is a type of insurance that covers vehicles used for commercial purposes. It can include trucks, buses, and other vehicles used in the business. Commercial vehicles often have higher limits than personal vehicles.
Insurance companies sell this type of insurance because it can be expensive for businesses to repair or replace damaged goods that are covered by commercial auto policies.
Conclusion:
There are many different types of insurance options available to small business owners today. It's certainly not a replacement for traditional health insurance, but it can be a great supplement. It's also worth noting that this isn't the only form of insurance for small businesses available—it's just the only type geared specifically towards the needs of small businesses.
While small businesses are often successful, they can be risky investments. The owners of these businesses have some unique needs in terms of insurance, and it's important to find an insurer that's right for you. The best person to ask is your accountant – he or she will know the ins and outs of your business and be able to help you find the right policies to protect your firm.
It covers both bodily injury and property damage to customers and to other people in general. It also covers your business for slip-and-fall claims made by customers who get hurt on your business premises.
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