What Types of Business Insurance Do You Need

Business insurance helps protect companies from financial loss resulting from accidents, property damage, theft and lawsuits. It is often required before renting space in a commercial building or entering into contracts with clients.

There is no one-size-fits-all business insurance policy. Different businesses have unique needs, so it’s important to assess your risks and choose a policy that works for you.

Property Insurance

Property insurance is an important coverage for businesses of all sizes. It covers business assets like inventory, furniture and equipment from damage or theft. It may also cover the costs of lost income when a loss occurs and a company must close. This is often included in a business owner’s policy along with commercial property and general liability insurance, or it may be purchased separately.

Whether your business needs this type of coverage depends on the assets you have and the risks you face. Most small businesses need at least some form of liability and property insurance, and you should consider a business interruption policy as well.

Many business owners opt to buy a business owner’s policy, which combines property, general liability and crime insurance into one convenient package. But you can also purchase standalone policies or specialized coverage for certain industries. To get started, tally up your business’s assets and think about the risks you face.

Liability Insurance

When your company faces a liability claim, such as a customer slipping on a wet floor and injuring themselves, or damage to their property, this type of business insurance covers damages and legal fees. This is a must for any company, large or small.

It also helps if you have this coverage to demonstrate to clients, customers and suppliers that your company is responsible and trustworthy. Many contracts and leases require proof of commercial general liability before signing.

Every business has different liabilities and risks, so you’ll likely need a custom policy that includes several business insurance types. Your best option is to consult with a knowledgeable insurance agent who can help you assess your unique risks and liabilities and develop a comprehensive plan. Remember to re-assess your coverage needs annually, as well as after any major changes to your operations or assets. Hiscox offers business insurance policies for companies with 10 employees or less and for professional services such as consultants, PR agencies and graphic designers.

Business Auto Insurance

A business auto policy (BAP) is similar to a personal car insurance policy, but it’s designed for vehicles you use in the course of business. It includes liability and physical damage coverage for cars, trucks, vans or other vehicles your company owns, leases or rents. It can also include coverage for employees who drive their own personal cars or trucks as part of their work for your business. This is typically covered by adding the Drive Other Car Coverage endorsement to your BAP.

A business car insurance policy may also include a variety of other valuable coverages like comprehensive and collision coverage, medical payments coverage, uninsured/underinsured motorist coverage and more. Talk to your independent agent about the specifics of a business auto policy for your company. It’s a smart investment that could protect your business from costly claims. And, it may even help you save money on your premiums.

Business Owner’s Policy (BOP)

Unlike personal insurance policies, which generally don’t cover business-related incidents, a BOP can protect your business from third-party bodily injury and property damage. The general liability portion of a BOP protects your company from lawsuits over things like customer or client slip-and-fall accidents, while the commercial property coverage safeguards your assets from damage caused by fires, natural disasters and theft. Some insurers also offer optional endorsements for additional protection, such as data breach coverage and environmental liability coverage.

While no single policy can protect against every possible risk, a well-crafted BOP provides small businesses with peace of mind and the leverage they need to negotiate with landlords and major clients. Plus, bundling multiple coverages often results in lower premiums than purchasing the policies separately. However, not all small businesses qualify for a BOP. Insurers typically look at industry parameters, location, revenue and size when determining whether to offer a BOP. And, some industries may have more workplace-related risks than others, which could increase the cost of a BOP. assurance pro