Just as you have homeowner's insurance for your home and possessions, it makes sense to have commercial insurance if you run a business. You don't want to expect the worst to happen, but it's important to be realistic. You don't want to lose your business because you can't afford to pay for damage to your workplace or for an employee's medical bills.
TL;DR (Too Long; Didn't Read)
Commercial insurance protects a company's assets from theft and damage and helps a business owner cover the cost of obligations, such as medical costs if someone gets hurt on the business premises.
What Does Commercial Insurance Cover?
You can get different types of commercial insurance, depending on your needs. The most common types are property, liability and workers' compensation.
Property insurance covers loss or damage to your business property and equipment, including computers. Many items may be considered business property, including the physical building your business operates in, inventory, furniture, machinery, books and documents, television and satellite dishes, signage and fencing, as well as intangible items like trademarks and copyrights.
Liability insurance covers damages to third parties, for example if someone gets injured on your business premises or one of your employees causes property damages or injury to someone during the course of their employment. If you are sued, liability insurance can also cover legal costs and financial awards, including compensatory damages, the injured party's non-monetary losses and punitive damages. It can also cover claims of false or misleading advertising, including libel, slander and copyright infringement. If you don't own your own business property, liability insurance can also cover you for any damage you cause to the property as a tenant, such as water damage.
All employers are required by state law to carry workers' compensation insurance, which covers work-related injuries to your employees and is a separate policy to general liability coverage. Workers' compensation insurance typically covers the injured employee's medical expenses, a portion of his lost wages, rehabilitation costs and permanent partial or total disability benefits.
Why Does a Business Need Commercial Insurance?
Commercial insurance protects your business from property damage, business interruption, theft, liability and employee injury. If you have the right commercial insurance policy for your business, you'll recover with minimal business interruption after a loss. If you don't have commercial insurance, the cost of getting back on track after a disaster could ruin your business.
How Much Is Commercial Insurance?
Annual commercial insurance premiums range from $750 to $2,000, depending on your line of business and what coverage you require. Consult a licensed agent or broker in your area for advice on the type of coverage you need and where to get the best deal. A good agent or broker knows what commercial insurance coverages are legally required in your state, and can guide you through the entire application process.
- Maryland.gov: A Business Owner's Guide to Commercial Insurance
- U.S Small Business Administration: General Business Liability Insurance – How it Works and What Coverage is Right for You
- U.S. Small Business Administration: Get Business Insurance
- California Department of Insurance: Commercial Insurance Guide