What is Small Commercial Insurance?

Summary: Having the right small business insurance is critical in helping your business succeed. Small commercial insurance protects a business from potential risks, including employee injuries, property damage, reputational damage, etc.

Small businesses can face many risks, from employee injuries and property damage to data breaches or lawsuits that could potentially ruin their business. The right type of small business insurance can help protect business owners from paying for claims for the costs of these damages out of their own pocket.

What is Insurance for Small Businesses?

Small business insurance helps to protect a business’s property, assets and employees from losses due to events that occur during a typical day on the worksite or in the office. The right type of small business insurance coverage can help cover the expenses due to accidents, natural disasters, professional errors and employee injuries.

One type of small commercial insurance is a businessowners policy (BOP). A BOP combines basic required coverages, such as general liability, property and business interruption, that you usually buy separately into one bundle for a lower premium. BOP coverages can also be customized to the small business owner’s specific needs. General liability provides coverage to a business if they are sued for causing property damage or personal injuries. Property insurance covers buildings and business-owned items damaged from named-peril coverages such as fire and wind.

What is Small Business Commercial Insurance?

Commercial business insurance is coverage for businesses and corporations, specifically designed to cover a company, its employees and owners. Commercial insurance helps businesses stay protected against risks that could impact their productivity and, ultimately, the bottom line. Some types of business insurance protect the organization's reputation and well-being, while others safeguard the owner’s financial aspects.

The type of commercial insurance that a small business needs will vary based on the type of business that they are in. Local, state and federal laws require some insurance coverages. At the same time, other types of coverages protect against a specific risk, such as cyber insurance or employment practices liability insurance.

What are the Most Common Types of Commercial Insurance?

The types of small commercial insurance are written to cover a wide range of small business needs. Compared to personal insurance, commercial insurance can cover multiple stakeholders and employees. It can have higher coverage limits and cater to a company’s specific industry and daily activities.

Commercial insurance agents and carriers are trained in the risks that businesses face and can explain the different types of insurance to their clients. Common types of small business commercial insurance are:

• General Liability
• Property Insurance
• Business Interruption Insurance
• Workers’ Compensation
• Commercial Auto Insurance
• Employment Practices Liability Insurance
• Cyber Insurance
• Management Liability Insurance (D&O)
• Errors and Omissions Insurance (E&O)
• Crime Coverage

Small Business Commercial Insurance Policies Details

When purchasing a small commercial insurance policy, it is important to do your research. A commercial insurance agent will be able to help you understand which policy makes the best sense for your business and will help you walk through the fine points, including:

• Premiums
• Deductibles
• Policy limits
• Coverages and exclusions

Does My Small Business Need Insurance?

The types of small business insurance that a business owner needs will vary based on the type of business, the location, and the potential risks affiliated with the company. The federal government requires businesses to have workers’ compensation coverage, unemployment and disability insurance. Most states also require organizations to have commercial auto insurance, professional liability insurance and liquor liability insurance. Small business owners must check with your state for specific requirements.

What Does Small Business Insurance Cost?

Since small business insurance is based on the specific needs of a business, the types of policies and costs will vary depending on:

• Company size
• Number of employees
• Payroll
• Claims History
• Type of industry
• Location
• Exposure to risks

Choosing the Right Insurance for Small Businesses

Small commercial insurance is not a one-size-fits-all. There are many different small business insurance policies, and the types you choose could be very important for your business depending on what you do. The Small Business Administration shares tips for new business owners when they are ready to buy insurance:

• Assess your business’s risks
• Partner with the right licensed commercial insurance agent for your needs
• Do your research and compare rates, terms and benefits from multiple insurers
• Re-assess your policy every year

Courtesy of AmTrust 

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