Commercial insurance is almost as varied as the kinds of businesses it insures, but it tends to fall into a number of broad categories:
Business interruption insurance: Imagine that your business is disrupted by a flood. It might take you days or even weeks to get back up and running again. Business interruption insurance cushions the business from the loss of revenue that would inevitably follow, thereby keeping the business afloat.
Commercial general liability insurance: This is the broadest type of commercial insurance available and it protects you in the event the operation of your business causes bodily injury or property damage to a third party.
Product liability insurance: This kind of coverage is usually included in commercial general liability, but not always. As its name suggests, it specifically protects you from liability for any harm that might come to a customer as a result of consuming or using the product you supply — whether that be cupcakes or power tools.
Professional liability insurance (errors and omissions insurance): Sometimes damage isn’t physical — instead it’s financial or intangible. This can happen when a professional, such as an accountant, provides advice that was incorrect or incomplete, resulting in the client suffering negative consequences. In order to withstand legal costs, professionals take out liability insurance.
Cyber risk coverage: In today’s world, almost all businesses rely on information technology and are thus vulnerable to cyber attacks (such as computer files being held hostage by ransomware). A cyber risk policy will protect a business against cyber crime and the blowback that usually ensues, including the legal liability that can result from customer information being hacked. Businesses that offer professional services typically need this coverage the most.
Commercial property insurance: If your business has substantial physical assets, such as office buildings, warehouses and offices, the risk that they could be damaged by things like fire, floods or even vandalism is ever-present. Carrying property insurance will protect you against that risk, and it’s often advisable to include coverage for the equipment or inventory that’s inside those structures as well.
Equipment breakdown insurance: While a property insurance policy may cover your equipment in the case of damage caused by external events (such as a fire), it won’t necessarily protect you if the equipment fails because of an internal source of damage (such as a boiler exploding). To cover yourself against that sort of eventuality, you would want to obtain equipment breakdown insurance.
Commercial auto insurance: Lots of businesses depend on vehicles. Think: trucking companies, grocery stores or furniture movers. Insuring those vehicles is a must since accidents happen. If you own several vehicles you may qualify for a commercial fleet insurance policy.