Post on 14-Apr-2017
Types of Business Insurance for a Small BusinessBy Floyd Arthur
If you are just starting a small business, you probably know that you need business
insurance to protect yourself from financial risk. But with so many different business
insurance products available, you may be having some difficulty deciding what type of
business insurance is essential and which you can forgo, at least for a while.
Types of business insurance for small business
To make the decision a little easier, here’s a helpful guide to the most common types of
business insurance for small businesses and the protections they offer.
Commercial General Liability Insurance
Also called CGL insurance, this type of business insurance policy protects you in the
event another party is injured as a result of your or an employee’s negligence. Typically,
CGL policies cover:
* Bodily injury
* Accidental property damage
* Medical expenses
* Libel and slander
* Costs associated with defending lawsuits
* Settlement costs and judgements
Commercial Property Insurance
Commercial property insurance is business insurance that covers property damage due
to a variety of “covered events.” These usually include damage due to fire and smoke,
water and wind, vandalism and the like.
Business insurance policies differ in how they define “property,” but most cover damage to:
* Physical premises,
* Business equipment and furnishings
* Inventory
* Company papers
* Cash
Digital assets are usually not covered, so it’s a good idea to store a backup of all digital
property either off site or online. Keep a copy of passwords, account numbers, and other
important records off site as well.
Business Interruption Insurance
Business interruption insurance helps keep your company going in the event your
operations are temporarily interrupted by a covered event. If, for example, your office is
rendered unusable due to a fire or weather event, the policy will pay for you to set up
shop somewhere else for a specified period of time.
Business interruption policies typically cover:
* Relocation costs
* Lost income
* Payroll expenses for employees who continue to work
* Operational expenses that continue even though operations are temporarily suspended
(for example, utility bills.)
Business interruption insurance generally mirrors your property and casualty policy.
Thus, if your commercial property insurance does not provide coverage for damage due
to floods, your business interruption insurance will exclude this coverage as well.
Product Liability Insurance
Product liability insurance protects you in the event a product you manufacture or sell is
defective and causes harm. Examples of product liability claims include:
* Design defects -- These occur when the design of the product renders it dangerous or useless.
* Manufacturing defects -- These are unintended defects that occur when a product varies
from the intended design and dangerous as a result
* Failure to warn -- This occurs when a product is inherently dangerous but is not properly
marked with warning labels or instructions for care.
In most states, any party involved in the supply chain for a defective product, including
the manufacturer, distributor, wholesaler and retail supplier, may be held legally liable
for damages under a product liability claim.
Professional Liability Insurance
Professional liability insurance, protects professional service providers against claims of
negligence, bad faith, misrepresentation, unethical business practices and giving
unsound advice. Also called errors and omissions coverage, it is important coverage for
businesses such as:
* Realtors
* Attorneys
* Insurance professionals
* Financial consultants
* Estate planners
* Physicians (medical malpractice insurance)
To ensure that your small business has the optimal business insurance coverage, consult
an insurance professional at Carmoon Ltd. today. We are available Monday through
Friday from 9 a.m. to 6 p.m. at 516-292-3780, so call us to set up an appointment to
discuss your business insurance needs today. Or if you prefer, request a free
consultation online and we will get back to you right away.