What Are the Different Types of Business Insurance?

Business insurance is essential for the protection of every enterprise. Medical expenses, property damage, and the high cost of litigation could be costly out-of-pocket expenses. However, there is no one-size-fits-all policy, so your company's insurance needs are determined by its risk exposure. Here are some popular types of insurance purchased by businesses.

General Liability

General liability coverage protects against risks arising from dealings with other parties. It protects against claims of customer injury, property damage, copyright infringement, and defamation. This sort of insurance does not cover employee injuries, professional errors, business vehicles, or commercial property damage.

Although general liability insurance is not required by law, you may be asked to provide proof of coverage when applying for certain professional licenses.

Product Liability

Product responsibility is more than just a warranty or guarantee. It protects your firm from product-related litigation in the event that its products cause injury or damage to third parties. Customers may be damaged by the manner in which your product is created, manufactured, advertised, or utilized. Even if a product is used improperly, your company may still be liable for resulting damages.

Due to the likelihood of being held accountable for injuries caused by products they create or sell, manufacturers and merchants should invest in this form of insurance.

Commercial Property

Suppose you possess buildings or business personal property, such as office equipment, inventory, and tools. In that case, you must purchase commercial property insurance. This sort of insurance safeguards the physical assets of your business against fire, burst pipes, explosions, storms, vandalism, and theft. Typically, floods and earthquakes are not covered, so you may need to add them to your insurance coverage.

After a natural disaster, commercial property insurance will assist in getting your business back up and operating. Your policy's premium will vary based on the value of your company's assets, its location, the nature of its building materials, and the existing security systems.

Workers' Compensation

Workers' compensation insurance supports employees who have workplace injuries. It provides compensation for medical expenses and lost wages due to a work-related illness or injury. This policy will also pay death benefits in the event of a fatality.

This coverage is considered social insurance since it is contingent on a social contract between management and employees. In exchange for purchasing this insurance, business owners are covered against civil actions filed by their employees. If you have W-2 employees, workers' compensation coverage is required.

Professional Liability

A professional liability or errors and omissions coverage offers compensation and defense in the event that professional services are rendered poorly or not at all. It assists in covering common claims, such as negligence, erroneous counsel, misrepresentation, and breach of fair dealing and good faith. Depending on the provisions, this policy may also address violations of privacy.