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What is Business or Commercial Insurance.pdf


The need for insurance coverage in a business or commercial operation is vital to protect companies from problems.

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									What is Business or Commercial Insurance?
The need for insurance coverage in a business or
commercial operation is vital to protect companies
from problems. General liability insurance is an
important foundation in developing a good insurance
plan. Having this insurance coverage can protect the
company in case there is damage to a person or
property. This damage could occur from the business
itself or from another person causing the damage to
the business.

Here are some of the most common reasons why
your business should have liability coverage:

      Automobile accident: If one of the company vehicles is crashed or causes property damage to
       another vehicle or person; having coverage can help pay for damages and protect employees. If
       they file a lawsuit against the employee you are covered under the liability insurance to cover
       the expenses.
      Manufacture Products: Liability coverage is good to protect you in case a product that is
       developed ends up injuring or causing damage to clients. This may result in a class action
       lawsuit, but again the insurance protects the business.

How Much?
The next question is how much coverage your business should have, and what is required for you to be
able to adequately protect your investments. In many cases this is dictated by the landlord or vendors
that own or are near your business. Generally this could mean that you setup a coverage that gives you
one million dollars per occurrence of a lawsuit, and two million dollars aggregate.

These amounts can vary depending on the scale of your business, but for many small businesses or
commercial companies this is a good number to go by. If your company is responsible for more than
                                                  one occurrence per year you will most likely cap out
                                                  on the aggregate portion of your insurance

                                                   Vendors can also play a significant role in deciding
                                                   on how much coverage is needed. For example, if
                                                   you are a sporting goods distributor a company like
                                                   Dick’s Sporting Goods may require you to have up
                                                   to 5 million dollars per occurrence. This is mainly
                                                   due to the factors of having a defect or problem
                                                   with a product that may malfunction. In the event
that there is a problem with your product you can use your increased coverage to stay afloat while the
product is fixed or replaced.

It is important to note that a small business that has minimal assets maybe required from the beginning
to acquire increased coverage in order to do business with other companies. Eventually once your
company is more established the limit on your insurance should grow as your business grows. It is clear
that without proper coverage of insurance, and knowing what can be covered should be a priority for
any business. Although, it is challenging to run a small business in today’s economy; having the right
insurance coverage can enable a business to obtain protection against lawsuits, and from other
problems. Insurance companies from Fort Meyers to Denver will offer this option to you, so take
advantage of it.

Photo Credit: Dave Bledsoe, Johnny Vulkan

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