Importance Of Commercial Insurance For Your Business

August 20, 2020 by Susan Paige

Not many business owners are familiar with commercial insurance. Those that are familiar with it may consider it an added expense that they have to shoulder. Only a few realize that it is among the most crucial investments that a company can make.

Commercial insurance is there to protect your company against serious financial losses, and can be vital in keeping the business afloat in the case of unexpected expenses such as a lawsuit. No matter the size, organizations should take time to research what applicable coverage is available for their operations.

Types of Commercial Insurance

There are three main categories of commercial insurance:

  • Liability insurance

This insurance protects your organization against damages filed by third-party entities, such as personal injury, premises lawsuits, and property damage.

  • Property insurance

This protection covers any damages that may occur in your place of work, such as flood or fire.

  • Worker’s compensation insurance

This commercial insurance provides protection in case your employees get injured as they carry out their responsibilities. In essence, it discourages employees from filing negligence lawsuits for injuries that they may incur during work hours.

Note, however, that these coverages can have additional features that you can explore depending on the nature of your business.

Exploring the Coverage

Before you finalize your commercial insurance contract, make sure that you have a complete understanding of what it covers. Your insurance agent is the best person to explain this to you in detail. Ask for information about all the variables, such as the specific types of losses that are commonly seen in organizations within your industry. They can suggest whether a particular coverage has relevance for your business or not. After all, if you are looking to protect your nail salon you will likely have very different requirements to someone looking to insure their motor business. As you explore the coverage best suited for your organization, take time to read the fine print, the terms and conditions, and special considerations. If there are any clauses or conditions that are unclear, don’t forget to ask your agent about it.

Your insurance agent should also be the first to know if there are claims that the provider needs to investigate. You have to remember that commercial applications are much more complicated than individuals claim. For this reason, it is important for them to have an immediate assessment where possible. Never try to handle the complaints yourself as it can invalidate your agreement with the insurance provider.

Updating Coverage Based on Business Growth

Experts believe that entrepreneurs must adjust their commercial insurance coverage accordingly. Businesses evolve, and with these changes, the needs of the operation change as well. For example, when starting out, you only have to consider property insurance. Then, after a few years, you acquire a delivery truck. To completely cover all your bases, you also need to obtain commercial auto insurance. The key here is knowing the basic types of coverage so it will be easy to upgrade your commercial insurance as necessary.

Commercial Insurance for Small Businesses

Unlike big corporations with unlimited resources to deal with damages and lawsuits, small businesses do not enjoy the same privilege, making them the most at risk when it comes to losses. As such, it is critical for these small businesses to include commercial insurance as part of their business strategy. For instance, yacht owners must ensure that their boats are ready to sail. Aside from getting sail supplies from stores like www.fareastsails.com/, they should also look at updating their commercial insurance.

With the appropriate commercial insurance, it’s easier for organizations to start over should they be hit with unexpected lawsuits. For organizations that cannot afford to lose their business, commercial insurance should be mandatory. It is their protection against personal injury claims, property damage lawsuits, and employee claims. Take time to talk to an agent to get an idea of the most appropriate commercial insurance for your company.


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