What is a Commercial Insurance Policy?
Insurance policies are commonly misunderstood by the general public, even though they are often considered to be an essential part of one’s financial planning strategy. If you’re looking to buy insurance, the most important thing to understand about an insurance policy is that it has two main parts: the coverage and the premium. The coverage is what the policy covers; this includes events like natural disasters or medical bills. The premium refers to how much you will have to pay in order to receive that coverage over a period of time, usually one year.
What Do Commercial Insurance Policies Cover?
Commercial insurance policies are designed to protect businesses, and their assets, against losses. These policies can also provide protection against lawsuits filed by customers. Commercial insurance is comprised of many different types of policies that can vary widely in cost and coverage. The two most common types of commercial insurance are property and liability coverage; however, there are many more that companies may need, depending on their specific industry. For example, manufacturers will often have specialty commercial insurance needs because they deal with hazardous materials on a regular basis.
Commercial General Liability Insurance
A commercial general liability insurance policy covers you in case your business causes physical injury or property damage to someone else. The most common examples of incidents covered by CGL are slip-and-fall accidents, vehicle collisions, dog bites and employer/employee disputes. CGL policies also cover claims of defamation, slander and libel as well as product defects.
Commercial Property Insurance
If you’re running an actual business and trying to run it legally, you probably need commercial property insurance. This policy protects your investment by covering everything from equipment breakdowns to employee injuries. And with so many different types of policies available, there’s sure to be one that suits your needs and budget. Commercial property insurance isn’t as common as home insurance, but it comes in handy when your business relies on expensive equipment or large amounts of inventory.
Workers Compensation
The purpose of Workers Compensation insurance is to protect businesses from costly lawsuits stemming from on-the-job injuries. Workers Compensation insurance provides wage replacement benefits, medical and death benefits for injured employees and their families, as well as cash payments for employee death benefits to eligible dependents. You’ll also want to include Workmen’s Compensation coverage in your commercial general liability (CGL) policy. Commercial auto insurance protects you against financial loss in case of an accident involving one of your company vehicles.
Equipment Breakdown Coverage
This coverage provides financial protection against damage to or loss of business equipment. If your equipment suffers a covered breakdown, you’ll get paid for its repair or replacement (minus any deductible). This type of policy also covers damages from theft and vandalism. An equipment breakdown policy typically has two parts: actual cash value and replacement cost.
Last Word
In short, commercial insurance policy provides you with financial protection in case your business suffers from liability due to injury or death, or any other kind of business-related loss. A commercial insurance policy also protects you from lawsuits that arise out of company operations, like product recalls and worker injuries. If you’re starting your own company, commercial insurance policy should be at the top of your checklist. The process can seem overwhelming but there are a number of resources available online that can make things easier.
