When we talk about commercial insurance, we refer to an insurance policy for companies , and in this article we break down the importance of having this type of insurance. First of all, buying business insurance is vital if you have a growing business . Likewise, having the appropriate insurance coverage can help your company overcome almost any unexpected situation . Are you looking for a business policy ? Would you like to know how this insurance works? So, keep reading …
What is a Commercial Insurance in the US?
The term “commercial insurance” refers to any insurance policy that is intended for business purposes; These policies apply to both small and large companies. Commercial insurance helps you reduce the risk of your business being sued; It also offers compensation for property damage, employee injuries, and other unexpected circumstances . Currently, there are several types of commercial insurance policies that you can choose from, each of which covers different aspects of commercial property.
What coverage does commercial insurance offer in the US?
When you buy a commercial insurance policy, your assets are protected against financial losses that occur after an unexpected crisis or catastrophe. For example, an insurance policy can help you when an employee is injured on one of your properties or if work equipment is totally lost in a fire or flood. In other words, commercial insurance policies come into play when faced with inconveniences and are capable of covering all expenses. It is important to mention that the policies or coverages may vary depending on the issuer of the policy. However, the most common coverages offered by commercial insurance are:
- Property damage
- Legal responsability
- Lost business income
- Employee related risks
Important: When selecting a policy, consider the most common risks that you may face in your workplace. Remember that commercial insurance can be adapted to your company and the possible risks to which you are subjected while operating your business.
Types of Commercial Insurance in the US
Currently, there are different types of coverage for companies; Starting with general umbrella-type policies (specialized in covering everything) to very specific plans for your business. It is vitally important that when you speak with an agent to obtain insurance quotes, you are assured that you have obtained all the information available on the different coverage options. Next, we describe the different types of commercial policies that exist:
Commercial Business Liability Insurance in US
This type of business insurance protects your business financially in the event of: Injury, property damage, or other major legal disputes. Additionally, these policies often cover legal costs , natural disasters, vandalism, and much more. Within this broad category we find specific coverage such as:
- General civil liability insurance : General civil liability insurance covers physical risks; This section includes property damage and bodily injury. It is generally the most widely used and is commonly requested to cover legal fees for work- related claims .
- Professional Liability Insurance : Professional Liability is also known as Professional Indemnity or IP Insurance. In this case, it is a policy that covers claims associated with negligence, misrepresentation, and inaccurate advice. Also, it can be very useful in the event of errors or omissions in the company’s services. Finally, this coverage is ideal for companies that offer direct customer service. In fact, many companies are required to request this coverage by law.
- Product liability insurance : This type of insurance covers claims related to product defects . If you have a company that manufactures raw materials, it is best to consider this policy as your first option.
Commercial Workers’ Compensation Insurance
In some states within the US, the law requires most companies to cover their employees for work-related injuries and illnesses . That is, this coverage should take care of paying medical costs and the costs of employees who are unemployed due to an injury caused within the company.
Commercial car insurance
If you have a company that has private vehicles and automobiles for transportation, you should consider this type of policy. The commercial auto insurance will protect your business and your company’s employee if accidents and collisions . Generally, the cost of this policy is based on the number and type of vehicles your company operates; likewise, other factors to consider are the risk involved and the claims history.
Commercial property insurance
Property insurance covers expenses related to the partial or total damage or loss of commercial buildings due to fire, smoke or specific natural disasters. It also includes coverage of the property for loss of income due to business interruption and loss of materials in the building.
Business Owner Policy (BOP)
These policies group a variety of insurance coverages to protect your company against circumstances that could directly affect the business. The “BOP” which stands for ” Business owner’s policy ” includes liability, property and business interruption coverage .
Important : Some essential coverages are not included in a BOP. For example: Flood, commercial cars, workers’ compensation, and professional liability. Therefore, this type of insurance is 100% complementary to a general policy.
This form of coverage protects your business against computer-related crime , including data breaches, fraud, lawsuits, and more. Today, with cyberattacks becoming more and more prevalent, web data breach insurance is a common and ideal complement for companies that process customer data .
Commercial home insurance
This policy is ideal for those companies that are administered from a home. Therefore, business owners should invest in home-based business insurance; as well as homeowners insurance policies. Lastly, this type of insurance helps cover additional risks such as general and professional liability.
How to get commercial insurance in the US?
Choosing your commercial insurance policy involves making important decisions; from selecting the issuing insurance company to choosing the ideal policy that meets all your needs and those of your company. Therefore, if you are in the search for commercial insurance and want to know what the important considerations are, keep reading:
Evaluate your risks
If you are aware of the risks to which your business is exposed, you will be more likely to be right when you buy a commercial policy. Remember that the specific risks that affect your business determine what types of insurance you need. Also, don’t forget to check with your insurance agent to create a list of possible risks that may affect your business. Also, make good use of the free resources found on the web; for example: A calculator to determine coverage limits .
Choose the type of commercial insurance
Depending on the laws in your state of residence , you may need to have workers’ compensation insurance, commercial auto insurance, or professional liability insurance. As we mentioned before, the use of these policies will depend on your zip code and place of residence. On the other hand, you should also evaluate optional coverage options such as: Business interruption insurance, protection against deterioration of merchandise or credit insurance.
Compare the offers
When you still don’t know what decision to make, it is best to get some quotes from providers to find the best coverage and price options for your business. If you are a business owner, it is important that you take the time to investigate whether the insurance provider is knowledgeable about the specific types of policies that your company requires. Likewise, it will always be important that you ask all the questions that are necessary, assess risks and compare the reputation of each provider .
Important : If you don’t know where to check the reputation of an insurance company, visit the AM Best and Standard & Poor websites . There you will find information about reviews, audience ratings, experiences and more.
Check and buy a policy
Once you have selected your commercial insurance policy , review the plan one last time with your insurance agent and make the payment. Remember that when you cancel an insurance policy you have the option of making a single payment or starting to pay month by month.
Renew or change your policy
It is normal for the needs of your business to change over time; therefore, over the years you may need to remove or add additional coverage. That is, if this is your case, you must contact your insurance provider to update your policy . Likewise, some of the changes in the policies can be made online. Are you not satisfied with the policy you bought? Then change it! And adjust your insurance based on the current status of your company .
How much does business insurance cost in the US?
Depending on the type of policy you need, commercial insurance prices can range from $ 40 to $ 90 per month. There are even more comprehensive business policies whose total payment varies between $ 500 and $ 1,000 per year. Typically, the policy issuer calculates your premium based on the risk, type, and amount of coverage you need. Likewise, another important factor to consider is the number of employees and the work environment to which your company is linked.
Important : If you have not already chosen a commercial insurance policy, you can choose to carry a combination of policies; generally, this step ensures a reduction in the total cost of the premium.
Some important aspects that influence the final cost of business insurance are:
- Price levels. The offers and the final price of a premium will depend on the size of your company, your income, the total amount of ownership and the number of employees. The final price is also determined by the limits of the policy you choose.
- Packages. On the other hand, some commercial insurance companies offer combination packages. For example: You apply for a business owner policy and they offer you a discount on an additional policy such as “cybersecurity.”
- Discounts for valued customers. Finally , there are insurers that offer renewal discounts to their most loyal customers. Therefore, don’t forget to check with your policy issuer if they offer discounts for buying more than 2 coverages or for years of loyalty.
How does business insurance work in the US?
Businesses in the US typically purchase business insurance through an intermediary, typically a specialized insurance agent or broker. On the other hand, insurance companies can provide services to you remotely. However, if you prefer to speak with your insurance agent in person, it is best to find an agency that has a physical location that you can visit and verify their reputation. As a customer, you need to check with insurance brokers if they offer customer service by phone, email, live chat, or even all three. Remember, before making the decision on which policy to choose, you must study each small part of the coverage contract.
What commercial insurance is mandatory in the US?
The answer to this question always depends on your place of residence. However, most states require workers’ compensation insurance, commercial auto insurance, or professional liability insurance at a minimum. At this point, it’s best to check with your state’s laws on mandatory commercial insurance. Here are the basic business insurance requirements:
- Workers compensation
- Unemployment insurance
- Disability insurance
What does a commercial insurance policy cover in the US?
Business insurance is usually a combination of some types of coverage designed to protect businesses, their employees, and their owners. The actual details of the plan differ depending on the type of business and its qualifications. You can work with your insurance provider to come up with a plan that works for your business.
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