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Hello Insurance. Goodbye Risk.


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Hello Insurance. Goodbye Risk.

When it comes down to it, all insurance really serves a single purpose. It reduces your risk. Perhaps you cannot afford to risk having to pay $100,000 if someone is badly injured on your property. You'd buy homeowners insurance to protect you from that risk. Maybe you don't want to have to shell out $20,000 for a new car if someone drives into the side of yours in a parking lot. You'd buy comprehensive car insurance to cover that risk. More insurance equals less risk. But how much risk do you need to protect against, and how much insurance is enough? Only you can answer that question, and you should have a better idea of your answer after reading the articles on this website.

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3 Categories to Consider When Purchasing Business Insurance

Business insurance policies offer many different coverages, but most of these coverages can be grouped into distinct categories. Individually thinking through each of these different categories can help you make informed decisions regarding how much insurance your company should purchase. Read on to learn more about three of these categories.

1. Policies That Protect Property

All of the property that your company owns should be protected by an appropriate business insurance policy. This includes any land, building, equipment, supplies, and inventory that your company has. 

The type of property that your business has will guide you as you select property-specific business insurance policies. For example, you'll need a building policy if your company owns a building and you'll need a contents policy if your company has items inside that building to protect. A commercial vehicle policy will be necessary for any vehicle your company has.

The value of your company's property will determine how much coverage the property-specific policies that your company purchases should provide. The limits on these policies should be equal to or slightly exceed what your business' property is worth.

2. Policies That Guard Against Liability Lawsuits

What your company does will determine what kinds of liability insurance policies you need. Most companies carry general liability insurance, which guards against basic accidents, defamation lawsuits, and false advertising lawsuits. Some other types of liability-specific business insurance policies that your company might want are:

  • Professional liability insurance
  • Product liability insurance
  • Pollution liability insurance
  • Hired and non-owned auto insurance
  • Commercial umbrella insurance

When deciding how much coverage to purchase for the different liability policies that you get, many companies choose to select high limits. A liability lawsuit can be extremely expensive if it's drawn-out, involves a major claim, or is a class-action suit. Having a high limit will help cover more expensive lawsuits that your business might face.

3. Policies That Protect Against Lost Revenue

Business income insurance, which is sometimes called business interruption insurance, is technically a property-related business insurance policy. Considering this insurance on its own is helpful, however, because the limit chosen isn't based on the value of an asset.

This insurance protects against prolonged revenue losses that follow a covered disaster. For example, if you need to rebuild a facility after a fire, business income insurance will provide supplemental payments until your store is reopened and earning revenue again. In general, you should purchase business income insurance that has limits to would cover your operating expenses for as long as it'd take to rebuild your company's facilities.

To learn more about business insurance, contact an agent near you.