Business Insurance – Essential Coverage For Your Business

Business insurance protects your company against financial loss caused by accidents, natural disasters or lawsuits. It also shows customers and clients that you take your business seriously and are willing to protect them financially.

Different companies have different risks, and some types of business insurance are required by law or contract. NerdWallet’s top picks for business insurance include providers that offer a range of coverage options in a single policy.

Property Insurance

Property insurance protects the physical assets of your company, like your building and equipment. If those items are stolen or destroyed, the policy reimburses your business for their cost as well as any lost income. This is an essential form of coverage for any firm, especially those who work out of a commercial space. Those who run their business out of their home should check to see if homeowners insurance offers the necessary coverage through an endorsement or in-home business policy.

Some states require this type of insurance for businesses with employees. Typically, businesses with more than 10 workers must purchase this type of coverage. Often, it is combined with general liability insurance and business interruption insurance to create a policy known as a Business Owner’s Policy (BOP). It is important for small businesses to review this coverage regularly to ensure their assets are protected against the risks of natural disasters, accidents and lawsuits. A good rule of thumb is to tally up all the items you use for your business and speak with an agent about the best policy options.

Business Liability Insurance

Many businesses need liability coverage to protect against claims that their products or services caused injury or damage. This includes negligence, libel and slander. Real estate agents, dentists and accountants are just a few of the types of professionals that often need this insurance. Some states require that businesses carry workers’ compensation insurance for employee injuries.

General liability insurance, which is also known as commercial general liability, is one of the most important policies a business can have. It protects against the financial consequences of third-party bodily injury or property damage, as well as defending lawsuits and settlement bonds or judgments. Most small businesses need this coverage.

In addition, a commercial property policy covers the buildings and moveable assets owned by a business. Some insurers offer a business owners policy (BOP) that bundles general liability and property coverage into a single policy. Other companies may offer extra coverages like employment practices liability or errors and omissions insurance (EPLI). You should evaluate your specific risks to determine what other types of coverage you might need.

Employment Practices Liability Insurance (EPLI)

Thousands of charges are filed with the US Equal Employment Opportunity Commission each year, and these lawsuits can cost small businesses big. EPLI is an important part of a business insurance portfolio, as it can help pay for legal costs related to employment lawsuits.

This specialized coverage protects your company against a broad range of employment-related issues including sexual harassment, discrimination, wrongful termination and more. It typically excludes claims based on bodily injury and property damage (covered by general liability) and workers’ compensation violations (covered by commercial general or workers’ comp policies).

Insurance companies may ask for proof of your HR practices, such as written employee handbooks, training programs, and effective record-keeping systems. The size of your company, whether you’ve had previous employment-related lawsuits, and other factors may affect the availability and cost of EPLI. It’s often sold as an endorsement to a business owners policy or as a standalone policy.

Professional Liability Insurance

Mistakes happen, but when those mistakes cost clients money it can spell trouble for a small business. Professional liability insurance (also known as errors and omissions insurance or E&O) offers protection from claims that your service or advice has caused financial loss for your client.

The policy typically pays for legal fees, settlements and judgments up to your policy limits. This coverage is a must for attorneys, accountants, architects, engineers and many other professions. It’s also popular for cleaning services, landscapers, fitness trainers and other service businesses.

Unlike commercial general liability, which has a broad trigger for bodily injury and property damage, most professional liability policies have claims-made coverage and contain shrinking limits where the insurer’s payment of defense costs reduces your available policy limits. For this reason, it’s important to review your policy regularly and make sure you’re protected.assurance pro