Business Insurance Basics


Business insurance is an important way of protection against financial loss. It’s a basic form of risk management, mostly used to mitigate the risk of an unpredictable or contingent monetary loss in specific circumstances. A business insurance policy will cover you from any liability that is directly related to the performance of your business. Business insurance comes in three forms: property, liability and Casualty. There are also special policies called business interruption policies, which protect you during a catastrophe caused by your business.

Liability covers all those things that can be made responsible for your liabilities. Commonly these are accidents and errors. Errors can take the form of substandard performance, failure to meet quality standards or improper supervision. Property coverage protects you from losses that are incurred due to natural disasters such as fire, storms, earthquakes and slips. Casualty policies cover injuries to employees and property, and these are usually the most common types of business insurance.

Casualty business insurance helps pay for property damage and legal fees, and it covers the legal costs related to your business. When you have a casualty policy, the policyholder takes responsibility for any legal costs (such as judgments or claims) related to the death of a customer, employee or member of the business or damage to the business. This can help cover lost business income in the event of lawsuits. For business owners who have property or casualty property policies, this can be an additional way to help pay for unexpected losses.

Many insurance companies also offer special policies called umbrella policies. Umbrella policies cover business risks not just with one type of loss, but with several different types of risks. These policies may cover the loss of business assets from lawsuits and products from theft. While these policies are generally only suitable for companies with a very large number of customers, they can be an attractive option for small businesses that have many unique products or services. Business insurance is just one part of the many factors that make small businesses operate successfully. Many small businesses rely on short-term lending methods that need to be renewed every few months. These loans, along with payroll, taxes and other business expenses make the operating costs of a small business extremely high.

Workers’ compensation and disability insurance are two other important business risks. Workers’ compensation covers accidents or injury on the job, while disability coverage ensures that employees do not miss work because of physical problems. These policies may also cover long-term illness or even death in the workplace. Before you decide which type of insurance best suits your business, consult with a business insurance agent who can help you understand the types of coverage available and recommend the best choice for your company.