The Executive Suite: What's Covered by Your Business Insurance?

Thursday, May 9, 2013

What's Covered by Your Business Insurance?

Business insurance can be a daunting term for a new business owner, or for one who is expanding their business and is not sure if they need additional coverage. For anyone who is curious about business insurance, especially those who are new business owners themselves, it is important to understand the terms and types of coverage in order to adequately insure their business in case of an emergency. Most people have auto or personal insurance; these kinds of insurances cover the person in question from accidents, whether to their person, or to their or another person’s vehicle. Business insurance is essentially the same thing; it protects a business in case of an emergency.

The first step to being educated is to know what types of coverage there is. For the most part, there are 9 types of coverage:

Property Insurance
Casualty Insurance
Liability Insurance
Commercial Auto Insurance
Worker's Compensation
Business Interruption Insurance
Health Insurance
Life and Disability Insurance
Scripted Policies

Briefly, these policies can be explained as such:

Property Insurance covers the property out of which the business operates. There can be specific kinds of coverage involved, such as Fire or Flood Insurance. This type of insurance also protects property that may be leased or borrowed at the time.
Casualty Insurance covers loss or damage to the business. Property and Casualty Insurance are usually packaged together.
Liability Insurance protects a business from damage to property to another person or business. It protects the business from lawsuits for negligence.
Commercial Auto Insurance covers any vehicles used by the business, such as company cars or fleets. This kind of insurance acts in the same way that Personal Auto Insurance acts. If you have company cars or fleets, this type of insurance will most likely be required by law.
Worker's Compensation protects your employees from on-the-job injuries. The required coverage differs by state.
Business Interruption Insurance protects the cash flow of a company if there is an interruption in the work flow. For example, if a machine catches on fire, other types of insurance will cover the repair costs, however those kinds of insurance will not cover the profit lost due to the malfunctioning machine.
Health Insurance is a service which most businesses offer their full-time employees, and works as a personal insurance in case any employees get sick.
Life and Disability Insurance protects the company from the loss or death of a primary employee.

The most important step a business owner can make in regards to Business Insurance is to find an honorable Insurance Agent with whom to discuss their insurance options. Meet with a professional and discuss all of your options. A qualified agent will be able to help you decide what coverage is best for your business.