We all know that insurance covers our homes, cars, and even our belongings. But insurance for your small business is just as important.
Small business insurance, or commercial insurance, helps protect your business’s assets, property, and income. There are many reasons why you should have professional liability insurance. For example, contracts you enter into with other companies or vendors may require you to have small business insurance. A business owner’s policy (BOP) is a common insurance choice for many small business owners which includes three basic types of coverage to help protect your business: general liability coverage, business property coverage, and business interruption coverage.
General Liability Coverage
General liability coverage, also known as commercial general liability, or CGL is very important to have. It protects you and your business in case there is a lawsuit or liability claim against you. If someone is injured at your business and you’re found liable, general liability coverage will help pay for the injured party’s medical expenses. Small business insurance will also cover you in a variety of situations, whether the injured person is a visitor, client, or employee. It can also pay for your legal costs if someone sues your business. There are coverage limits though, so make sure to work with our team to determine a plan that works best for you.
Business Property Coverage
When you purchase business property insurance, it protects the physical aspects of your business from damages. It covers the physical location that your business owns or leases, as well as the contents inside the building, such as tools, machinery, office furniture, equipment, and inventory. For example, if there is a fire at your business, this coverage may help pay for building repairs if you own the building.
Keep in mind that business property coverage will be subject to a deductible and limits. You can typically choose your property coverage limits based on the estimated cost to repair, rebuild or replace your business’s property. You will need to make sure you select the right policy limit so you will have enough coverage to pay for any repairs or replacement costs. If you do not have enough coverage, you may have to pay out of pocket for the expenses that exceed the policy limits. Make sure you have an accurate assessment of your business so you can choose the right policy amount.
Business Interruption Coverage
Business interruption coverage is also great protection because it covers your business expenses when you have to temporarily close your business due to events beyond your control. It is also sometimes referred to as business income insurance, as it covers your lost income and extra expenses when your business is affected due to a covered loss, like theft, fire, or weather event.
For example, say a catastrophe makes your office uninhabitable. Business interruption coverage may help pay for rent costs at a temporary office while repairs are made. Business interruption coverage may also help replace lost business income due to a covered crisis. Similar to other coverages, you will be subject to a limit. You may also be subject to a time period. This means the coverage may only last for 6 months, for example, so be sure to ask your agent about specific limits.
