Commercial Insurance is a contract between an insurer and a business owner whose purpose is to minimize the owner's risks against losses, whether from weather, theft, vandalization, lawsuits, accidents or any other reason. There is a cost for this "hedge," which is referred to as a premium, so in essence, the potential for a greater (possibly devastating) loss is reduced to a smaller loss (the cost of the premium).

Types of Policies

  1. Business Property - covers the building or buildings and contents of the business. Outdoor signs, crime coverage, property of others, glass coverage, etc., can be covered as well, depending on the needs of your business.
  2. General Liability - covers what you could be obligated to pay due to bodily injury or property damage to others. If you do not own your building, your landlord normally would need to be added as an additional insured on the policy in order to protect them. Liability covers the premises and operations of the insured, as well as products and completed operations.
  3. Professional Liability - more commonly know as Errors & Omissions (E&O), it is a form of liability insurance that helps protect professional advice- and service-providing individuals and companies from bearing the full cost of defending against a negligence claim made by a client, and damages awarded in such a civil lawsuit. The coverage focuses on alleged failure to perform on the part of, financial loss caused by, and error or omission in the service or product sold by the policyholder. These are potential causes for legal action that would not be covered by a more general liability insurance policy which addresses more direct forms of harm. Professional liability coverage sometimes also provides for the defence costs, including when legal action turns out to be groundless. Coverage does not include criminal prosecution, nor a wide range of potential liabilities under civil law that are not enumerated in the policy, but which may be subject to other forms of insurance. Professional liability insurance is required by law in some areas for certain kinds of professional practice (especially medical and legal), and is also sometimes required under contract by other businesses that are the beneficiaries of the advice or service.
  4. Commercial Auto - is similar to personal auto coverage but is intended for vehicles used in the course of business. For example an employee is maing a delivery, backs up and dents another vehicle in a parking lot. The property damage portion of the policy would pay for the damages to the other vehicle.
  5. Business Umbrella - works just like an umbrella in the event your company faces a lawsuit and your regular business insurance policy does not sufficiently cover that claim on its own.
  6. Workers' Compensation - protects your employees if they suffer job-related injuries. The policy pays the medical bills for the employee who is injured on the job. If there is time off from work due to that injury, the insurance pays disability income to the injured worker.

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