By ALLEN MCQUISTON
The Jemez Agency
Commercial insurance is far from one-size-fits-all, but there are exposures that nearly every business has in common. Whether you’re an accounting firm or a web engineering company, have a “solopreneur” space, or a multi-story building filled with hundreds of employees, understanding your company’s exposure plays a key role in effectively protecting your business.
In this article, we uncover the five factors you should consider when determining what commercial insurance policy is right for you and explore the most common types of coverage for businesses.
What commercial insurance policy does my business need?
Consider these five key factors when determining what commercial insurance policy or policies your specific organization should invest in:
- Whether you own or rent your office space;
- The type of services you provide;
- The location of your physical office;
- Whether customers or clients visit your premises; and
- Whether or not you keep cash on-premises.
Below, we explore a few common policy types that address these variables and uncover why they are important considerations for any business.
What’s the most common commercial insurance policy?
The five commercial insurance policies used most commonly amongst businesses include General Liability Coverage, Commercial Property Insurance, Cyber Insurance, Commercial Auto Insurance, and Employment Practices (EPL) Insurance.
Review them and what they cover below:
1. General Liability Coverage
A general liability policy is crucial for businesses of all shapes and sizes.
If you own the building your business operates out of, this insurance protects the well-being of your customers, as well as anyone who utilizes your parking lot, sidewalks, or common areas. If you rent your space, your lease likely obligates you only carry liability coverage naming your landlord as an additional insured.
At the highest level, general liability coverage protects your business against lawsuits and subsequent monetary damages it may encounter.
These lawsuits may result from bodily injury, property damage, personal injury (such as libel, slander, invasion of privacy, etc.), advertising injury, etc. Though they most commonly occur based on injuries that happen on the business premises itself, lawsuits may also arise due to issues with ongoing operations away from the business premises or operations or products your business has completed.
2. Commercial Property Insurance
If you own the commercial building your business operates out of, it’s important to carry building coverage known as a Commercial Property Policy. This insurance can provide protection from property and income losses resulting from a covered cause of loss, such as a natural disaster or burglary.
Property loss coverage includes insurance on the building itself and the contents within the buildings as specifically outlined in the insurance policy. For this reason, business owners considering this type of protection should take stock of their building’s contents when determining their coverage amounts. Consider items like office furniture, fixtures, equipment, employees’ personal property, fine art collections on display, accounts receivable, outdoor property, etc., when setting this coverage.
3. Cyber Coverage
Any business that conducts its work online should invest in cyber coverage. Whether you’re a tech organization that works primarily on online systems or a small business that completes payment transactions digitally or stores customer data in an online platform, having protection in case of a cyber-attack is crucial today.
Did You Know: More than half of U.S. businesses have experienced a cyber-attack in the past year. Of businesses hacked, 72% spent $5,000 resolving the incident, with more than a third spending over $50,000 in response expenses.
Cyber coverage offers multiple layers of insurance defense against the complex, ever-evolving cyber risks businesses face.
4. Commercial Auto Insurance
Commercial auto insurance provides coverage for your business-owned or leased vehicles.
Several factors determine the type and cost of commercial auto insurance policies. These include but are not limited to:
- Class of business (NAICS code);
- Territory;
- Business use;
- Radius of operations; and
- Size, age, liability limit, and new cost of each vehicle.
Most commercial auto policies provide both property coverage (which protects against damage to your vehicle) and liability coverage (which protects against bodily injury to others and damage to their property.)
Insurance policies can be expanded to include additional protection for medical payments, uninsured motorists, personal injury protection, employee car usage in the service of the employer, and more.
5. Employment Practices (EPL) Insurance
Employment practices liability (EPL) insurance helps protect employers from claims made by employees alleging wrongful termination, discrimination, or harassment. This policy commonly helps to cover liability damages or defense costs in the case of a covered claim.
