Get Business Insurance From Someone You Trust

Business insurance is a contract between an insurance company and a business. The insurance company agrees to share the risk with the business entity in exchange for premium payments. In the event of a covered loss, the insurance company pays for the financial losses the business incurs up to the limit of the policy after the deductible amount is paid by the business filing a claim.

At the time of a loss, the business will typically file a claim. If a fire destroys a portion of the business premises, for example, the company will file a claim against the property insurance policy. An adjuster will assess the damage and process the claim. The company will then receive the appropriate amount of compensation for the loss.

There are many different scenarios regarding business risk and how insurance claims are filed. For example, in the event that the incident is a loss suffered by a customer of the company, the injured party will likely file a claim against the businesses’ liability policy. How the claim is processed depends upon the size of the claim, whether the matter can be settled with an insurance payment, and if the claim results in a lawsuit.

Business insurance is tax deductible, as long as the coverage is for the purpose of operating a business, profession, or a trade. Businesses may not deduct their business insurance premiums if the coverage is for the purpose of a self-insurance reserve fund or a loss of earning insurance policy.

Depending on the nature of your business and any insurance which you are legally obligated to carry, the following types of business insurance should be considered essential:

• General liability insurance: Coverage against accidents, injuries and negligence claims
• Product liability insurance: Coverage against product defects
• Professional liability insurance: Covers professionals against malpractice, negligence or errors
• Commercial property insurance: Covers against damage to your business property, such as from fire or a severe storm
• Business interruption insurance: Protects your business if you are no longer able to conduct your business because of a loss
• Home-based business insurance: Covers against general or professional liability.

Because commercial insurance needs to be tailored to each business based on risks, it is critical to work with an agent who will get to know your company and ensure that your coverage adequately protects your business investment.

Business insurance covers lawsuits as long as you have the appropriate business liability insurance for your situation and enough liability coverage to pay your legal costs. To ensure that enough liability coverage is in place for extreme circumstances like a lawsuit that exceeds $1 million in damages, many businesses buy a commercial umbrella liability policy.

Certain liability exclusions also apply, such as if an injury or damage was expected, or was caused intentionally. Some policies also have something called a “workmanship” exclusion, and some exclude coverage of punitive damages.  Liability insurance is available in many different forms, including:

• General liability
• Professional liability, "errors and omissions" and malpractice
• Directors and officers liability
• Product liability
• Premises or property liability
• Employer’s liability
• Employment practices liability
• Environmental and pollution liability

A business owner’s policy or “BOP” is insurance coverage designed specifically for small or medium-sized businesses. Depending upon the insurance company, the size of business that qualifies for a business owner’s policy may be based on revenues or number of employees. A BOP combines several types of insurance coverage in a packaged format, and can be customized to suit a particular business. Generally, this type of policy includes both property and liability coverage.

Policies may also provide coverage to include the following:

• Property claims
• Breakdown of equipment
• Loss of income/business interruption
• Professional liability
• Copyright infringement
• Libel
• Products and completed operations
• Premises liability