Commercial Insurance

The most common types of commercial insurance are property, liability and workers' compensation. In general, property insurance covers damages to your business property; liability insurance covers damages to third parties; and workers' compensation insurance covers on-the-job injuries to your employees. Depending on your business, you may want additional specialized coverage. Listed below are some of the different types of business insurance.

 

Boiler and Machinery Insurance

Boiler and machinery insurance, sometimes referred to as "equipment breakdown" or "mechanical breakdown coverage," provides coverage for the accidental breakdown of boilers, machinery, and equipment. This type of coverage usually will reimburse you for property damage and business interruption losses. For example, this coverage would cover fire damage to computers.

Debris Removal Insurance

Debris removal insurance covers the cost of removing debris after a fire, flood, windstorm, etc. For example, a fire burns your building to the ground. Before you can start rebuilding, the remains of the old building have to be removed. Your property insurance will cover the costs of rebuilding, but not of removing the debris.

Builder's Risk Insurance

Builder's risk insurance covers buildings while they are being constructed. For example, a Builder's risk policy would cover losses if a windstorm takes down your partially constructed housing development.

 

Glass Insurance

Glass insurance covers broken store windows and plate glass windows.

 

Inland Marine Insurance

Inland marine insurance covers property in transit and other people's property on your premises. For example, this insurance would cover fire-damage to customers' clothing from a fire at your dry cleaning business.

Business Interruption Insurance

Business interruption insurance covers lost income and expenses resulting from property damage or loss. For example, if a fire forces you to close your doors for two months, this insurance would reimburse you for salaries, taxes, rents, and net profits that would have been earned during the two-month period.

 

Ordinance or Law Insurance

Ordinance or law insurance covers the costs associated with having to demolish and rebuild to code when your building has been partially destroyed (usually 50 percent). For example, your three-story building is 100 years old. A flood destroys the basement and first two stories. Because more than 50 percent of your building has to be rebuilt, a local ordinance requires that the building be completely demolished and rebuilt according to current building codes. Property insurance covers only the replacement value, not the upgrade. Tenant's Insurance Commercial leases often require tenants to carry a certain amount of insurance. A renter's commercial policy covers damages to improvements you make to your rental space and damages to the building caused by the negligence of your employees.

 

Crime Insurance

Crime insurance covers theft, burglary, and robbery of money, securities, stock, and fixtures from employees and outsiders. Fidelity Bonds - a bond company covers losses due to a bonded employee's theft of business property and money.

 

Liability Insurance

Liability insurance covers injuries that you cause to third parties. If someone sues you for personal injuries or property damage, the cost of defending and resolving the suit would be covered by your liability insurance policy. A general liability policy will cover you for common risks, including customer injuries on your premises.

 

Errors and Omissions Insurance

Errors and omissions ("E & O") insurance covers inadvertent mistakes or failures that cause injury to a third party. The act must actually be an inadvertent error, and not merely poor judgment or intentional acts. For example, an E & O policy would cover damages arising from an insurance agent failing to file policy applications, or a notary forgetting to fill out notarizations properly.

 

Automobile Insurance

Commercial automobile policies cover the cars, vans, trucks and trailers used in your business. The coverage will reimburse you if your vehicles are damaged or stolen or if the driver injures a person or property. Directors' and Officers' Liability Insurance This type of insurance is generally purchased by corporations and nonprofit organizations to cover the costs of lawsuits against directors and officers.

 

Workers Compensation Insurance

Workers compensation insurance covers you for an employee's on-the-job injuries. Businesses with employees are required by various state laws to carry some type of workers' compensation insurance. In most cases, workers' compensation laws prohibit the employee from bringing a negligence lawsuit against an employer for work-related injuries.