What is Commercial Insurance?
Starting a business comes with a lot of responsibility. Commercial insurance protects the business against any unexpected liabilities that could affect the business. Commercial insurance protects the assets of the business against lawsuits that might arise due to business operations. It can refer to three different types of insurance such as:
- Workers’ compensation insurance covers the medical costs and wages of employees injured performing work.
- Property insurance that protects the business premises as well as barns, outbuildings, farm equipment, etc.
- Commercial liability insurance for damages to any third party.
Generic commercial insurance can be confused with general liability insurance and it is advised to make sure what types of insurance is included in a policy when purchasing one. The main purpose of the insurance however is to protect the business not only financially, but also to ensure that business operations continue while dealing with other issues a business can experience.
When Do You Need Commercial Liability Insurance?
For any business, it is always advisable to have commercial liability insurance. It doesn’t matter what type of business it is, commercial liability insurance can cover the costs of legal fees, medical costs, and damages or settlement costs when a business is being sued. In most cases general liability insurance covers the following risks:
- Bodily injury. When a non-employee is injured while the business is operating or while on the premises or worksite of the business.
- Damage to a customers property by employees
- Any medical costs incurred when a customer is injured
- Defamatory statements made by the business or an employee causing damages to another person or business.
- Copyright infringements or losses to another business due to advertisement.
Depending on the type of business operations, additional liability insurance might or might not be required. If a business operates from business premises and uses computer equipment and office furniture, it might be wise to also invest in property insurance.
Workers’ compensation insurance is only required if a business elects to hire employees. In the case of a sole contractor, it is not needed.
How to Choose a Commercial Insurance Policy
It can be difficult to know exactly what type of insurance is required especially when it comes to small businesses. Every business is unique and will require a tailored insurance policy to best fit the needs and risks of the particular business. In order to purchase the best commercial insurance for the type of business, the following should be taken into consideration:
- What does the business need? Assess the operating risks of the business in order to know what liability insurance is required for a particular business. The business might need additional coverage such as product insurance or equipment insurance.
- What does the policy cover? There are many different types of liability coverage available and it is important to read the commercial liability policy carefully. Understanding exactly what the business is covered for will avoid unwanted surprises when a lawsuit is filed against the business.
- Look at different types of policies and compare them in order to decide which one fits the needs of the business best. Not all policies available offer the same protection.
- Review the policy yearly. The business operations might change and so might the insurance need. It is advisable to review the policy yearly and make any updates where required.
Choosing the best commercial liability insurance provider
There are many insurance providers to choose from. As a small business owner, it is advisable to choose a provider that has experience or specializes in dealing with small businesses. They will be better equipped to know the specific needs of the business and would be able to make suggestions or provide sound advice.
A business can approach an insurance company directly or use a broker to advise them. A broker is an intermediary between the insurance company and the insurance purchaser and has the best interest of the purchaser in mind. Listed below are seven of the most well-known and largest insurance brokers globally.
- Marsh & McLennan Cos. Inc.
March is the world’s leading insurance broker. They operate in over 130 countries worldwide and have over 30 000 employees. Their annual revenue is almost US$ 17 billion.
Website: https://www.marsh.com
- Aon Plc.
Aon operates in over 120 countries in the world. They provide a broad range of retirement, risk, and health solutions.
Website: https://www.aon.com/home/index.html
- Willis Towers Watson
The company has roots dating back to 1828 and currently operates in over 140 countries worldwide.
Website: https://www.willistowerswatson.com/
- Arthur J. Gallagher.
The company started in Chicago in 1920. They have expertise in nearly every industry and use advanced analytics tools to assist businesses with their insurance requirements.
Website: https://www.ajg.com
- Brown & Brown, Inc.
They have been in the industry for more than 80 years and is the 6th largest independent insurance brokerage in the US. The company’s headquarters are based in Florida.
Website: http://www.bbinsurance.com
- BB&T Insurance Holdings Inc.
BB&T has been around since 1872 and is one of the largest financial services holding companies in the US. They operate more than 1,700 financial centers in 15 states.
Website: https://www.bbt.com
- HUB International
HUB is considered the 5th largest insurance broker in the country. They have over 475 offices nationwide with their headquarters currently based in Chicago.
Website: https://hubinternational.com
A small business or start-up might also be tight when it comes to funds. An insurance advisor who is open about what is included in the policy and doesn’t charge any hidden fees is recommended. Most importantly, the business must obtain a certificate of insurance as proof that the business is insured.
As a final thought, it is crucial to talk to someone knowledgeable when it comes to selecting insurance for a business. The process doesn’t have to be difficult and this website is a good source of information for any business looking to obtain commercial liability insurance.
