Commercial Insurance|Cheap Commercial Insurers

Common Types Of Commercial Insurance

Commercial Insurance, commercial liability insurance
Commercial Insurance

There are many different types of commercial insurance, but the most common kinds are liability, workers’ compensation, and property.

Basically, commercial LIABILITY INSURANCE covers damages that you cause to third parties. For example, if someone were to bring suit against you for personal injury or damage to their property, your liability insurance policy would cover the expense of settling and defending this type of suit.

While there are many specialized types of commercial liability insurance, a general liability policy should cover you for the most common risks like customer injuries that happen on your business premises, however, depending on the type of business that you are engaged in, you may need to also buy one of the following.

1. We tend to think of Malpractice insurance, a type of professional liability insurance, in regards to Physicians and Surgeons, but it can also be beneficial to other professionals such as lawyers, accountants, dentists, architects, and other trusted professionals.

This type of liability insurance pays for losses resulting from injuries to third parties when the conduct of the professional falls below the standard of care for that particular profession.

Let’s use the more familiar example, if a physician makes a mistake that other doctors in his same field of specialty would not have made, the patient involved might bring suit seeking damages for the mistake. The physician’s malpractice insurance will pay for costs of defending the suit as well as for any settlement.

2. Another specialized type of liability insurance that falls under the general category of commercial insurance is Errors and Omissions Insurance (E & O Insurance). This type of liability insurance covers mistakes and failures that are made inadvertently that cause injury to a third party.

The failure or mistake must be due to an oversight, and not just poor judgment or intentional acts. As examples, damages caused from an insurance agent failing to file policy application, or a notary failing to fill out a notarization correctly would be covered by an errors and omissions liability policy.

3. Most of us are familiar with the next type of liability insurance for our own vehicles, but there are commercial liability policies sometimes called commercial fleet insurance that will cover the vans, trucks, trailers, cars, and other types of vehicles that you may use in your business activities.

Like your personal liability car insurance, your commercial automobile policy will cover the loss or damage of your business vehicle as well as damages caused if the driver injures someone or damages property.

4. A fourth type of specialized commercial liability insurance is called, Directors’ and Officers’ Liability Insurance. This type of commercial insurance covers the cost of suits brought against directors and officers of nonprofit organizations and corporations.

The next type of commercial insurance that we’ll discuss is WORKERS’ COMPENSATION INSURANCE. Most companies over a certain number of employees are required by their various state laws to buy and carry workers’ compensations insurance.

In most states, because of workers’ compensation laws, employees are prohibited from bringing negligence lawsuits against their employers for injuries that are work-related.

The final type of commercial insurance that we’ll discuss is PROPERTY INSURANCE. This well known type of commercial buildings insurance covers damages and losses to personal or real property.

There are also a number additional coverages for business property that you might also want to investigate depending on your type of business:

1. Debris removal insurance is a specialized type of property insurance that would cover the cost of removing debris after a flood, windstorm, fire and so forth.

For example, if a fire burns your business building down, the wreckage and debris from the burned building would have to be removed before you could start rebuilding. Your property insurance while covering the cost of rebuilding would not cover the cost of removing the remains of your burned building.

2. Glass insurance covers broken store windows and plate glass windows. This can be an unexpected, recurring and an enormous expense especially in some parts of the country where high winds are common.

3. Boiler and machinery insurance, which is also called “equipment breakdown” or “mechanical breakdown coverage,” covers the accidental breakdown of equipment, boilers, and machinery.

If you have this important type of property insurance coverage, usually commercial insurers will reimburse you for property damage and business interruption losses. Under this type of commercial property insurance coverage, you would be reimbursed for fire damage to your business computers.

4. Builder’s risk insurance is another type of commercial insurance that provides coverage for buildings while they are under constructed. For example, your builder’s risk policy would cover losses if high winds blow down your partially constructed apartment complex.

5. Another type of property insurance that we don’t often think to buy, but could certainly come in handy is business interruption insurance. This type of commercial insurance covers business expenses and lost income that might have resulted from property damage or loss.

A good example of business interruption insurance would be if a fire caused you to have to close up shop for a few months, this valuable type of property insurance would reimburse you for all kinds of expenses and lost profits including salaries, taxes, rents, and net profits that you would have made during that few months when you were unable to open your doors for business.

6. Some kinds of businesses could not do without inland marine insurance. It covers other people’s property on your premises and property that is in transit.

For example, it you owned a dry cleaning business, this type of commercial property insurance would cover fire-damage to your customers’ clothing if your cleaners experienced a fire.

7. Tenant’s or renter’s commercial insurance is yet another type of property insurance. Most commercial leases require renters to carry a insurance that will cover damages you’ve made to your rental space an this type of policy will also cover any damages to your space caused by your employees’ negligence.

8. Crime insurance, also a type of commercial property insurance, provides coverage for burglary, theft, and robbery of securities, stock, money and fixtures from employees or outsiders.

9. Ordinance or law insurance covers the costs that you might incur if your building has been partially destroyed. Usually, if 50 percent of your building has been destroyed, you will be required to demolish and rebuild to code.

For example, let’s say your three-story building was originally built in 1910, it’s now a hundred years old. A recent flood not only destroys the basement, but it also destroys the first two stories of your building.

Since more than fifty percent of your building requires rebuilding, a local ordinance requires that the entire building be completely demolished and rebuilt according to current building codes.

One important point to remember with this type of property insurance is that it will cover replacement cost, but will not cover the cost to upgrade.

10. The last type of property insurance under the general category of commercial insurance is Fidelity Bonds. This is insurance from a bond company that covers losses when a business experiences theft of business property or money by a bonded employee.

While the type of commercial insurance that you eventually buy will depend on the type, size and needs of your particular business, most businesses will do fine with one of the standard packages the insurance industry has designed.

Before you settle on a commercial insurance policy, be certain that your agent completely understands your business, you may need to add a more specific type of insurance to make your coverage more complete.

Also, seek several commercial insurance quotes from a few different commercial insurers. Commercial insurance is like anything else, quotes vary from company to company, but also keep in mind that cheap commercial insurance is not always the best buy.

Bookmark It