- What Is Business Insurance?
- Types of Business Insurance
- What Business Insurance Do You Need?
- Confidently Protect Everything You’ve Built
Running a small business takes vision, determination and a significant investment of time and resources. But even the best-planned venture can experience unexpected challenges, which is why you need a comprehensive insurance policy to protect everything you’ve worked toward.
While you may know commercial insurance can help you safeguard your operations, team and long-term goals, it’s easy to get overwhelmed when reviewing all the various policies, legal jargon and complex caveats. We’ve created this small business insurance guide to simplify your choices, so you can quickly find coverage that suits your budget and mission.
What Is Business Insurance?
Business insurance, also called commercial insurance, protects your company from unexpected events that could disrupt operations or threaten your financial stability. Whether an employee has an on-the-job accident or your office is in the path of a natural disaster, your policy will let you bounce back sooner and continue serving customers with fewer interruptions.
Types of Business Insurance
Depending on your industry and the services you provide, you may need to combine several policies to prepare for unexpected events and disruptions.
General Liability
Commercial general liability insurance protects your business against claims involving bodily injury, property damage or other concerns that may arise during day-to-day operations.
- Injury to someone outside your company
- Reputation loss due to defamation, such as slander and libel
- Product liability
- Property damage
- Copyright infringement
General liability policies cover legal fees and medical expenses resulting from the event. Though these policies are comprehensive, they don’t cover every eventuality.
Commercial Property
You’ll need commercial property insurance if you own or lease physical space. Much like homeowners insurance, it protects your business’s physical assets from unexpected damage or loss.
Depending on your policy, commercial property insurance can cover repair or replacement costs related to covered events like fire, theft, vandalism, burst pipes and explosions. Natural disasters like earthquakes or floods may require additional policies.
In general, business owners should use this policy to protect:
- Property you rent or own that houses your business
- Equipment you need for your daily operations
- Essential documents and inventory
Professional Liability
Also known as errors and omissions insurance, professional liability insurance protects service-based businesses from claims of negligence, malpractice or mistakes. Consider this coverage if you provide advice, expertise or services that directly impact your clients.
Many state laws require health professionals and attorneys to carry comprehensive professional liability coverage, but they’re not the only ones who can benefit. Other professionals who may need E&O coverage include:
- Accountants
- Architects
- Interior designers
- Consultants
- Advertising agencies
- Real estate agents
- Insurance providers
- Engineers
- IT and tech professionals
- Financial advisers
- Independent contractors
Product Liability
What will you do if your products harm consumers despite your best intentions and quality control efforts? Even a single incident of physical injury or property damage can result in costly legal claims. That’s why any business that creates, manufactures, distributes, imports or sells products should consider product liability coverage.
Product liability claims generally fall into one of three categories:
- Design defects: Damage caused by flawed product design.
- Manufacturing defects: Mistakes that occur while making the product.
- Failure to warn: Harm caused due to insufficient labeling or a lack of warning about potential safety risks.
Business Interruption
In a 2024 survey by financial company Allianz, 31% of respondents cited business interruption as a top threat to their operations. Business interruption insurance policies cover losses resulting from direct loss or physical property damage, such as those caused by natural disasters, equipment failure or cybercrime.
Business interruption insurance typically covers the costs of:
- Relocation
- Lost revenue
- Employee payroll
- Mortgage or lease payments
Workers’ Compensation
People who experience job-related injury or illness are eligible to file workers’ compensation claims. Whether you have one employee or 100, you need this insurance to pay for:
- Medical bills
- Wage loss
- Compensation for disability or death
- Displacement benefits
Business Owners Policy
A business owners policy (BOP) is a package of essential coverages. This makes it a great policy option for first-time business owners. This policy protects against common risks such as:
- Customer injuries
- Property damage
- Loss of income due to certain covered events
As a BOP is a package policy, it typically includes the following insurance types:
- General liability insurance
- Property insurance
- Business interruption insurance
Commercial Umbrella
Commercial umbrella insurance provides extra protection beyond the limits of your other business policies. For example, if your business faces a $500,000 lawsuit but your liability policy only covers $300,000, your umbrella insurance might pay for the remaining $200,000 — helping you avoid out-of-pocket costs and keep your operations on track.
Professional Liability Insurance vs. General Liability
These similar-sounding terms mean different things. While general liability insurance covers things like property damage and bodily harm, professional liability insurance covers abstract or financial damages, such as mistakes or lapses in the services you provide.
What Business Insurance Do You Need?
Succeeding as a small business owner means being detail-oriented and preparing for the unexpected. While general liability and business interruption insurance are decent starting points, many entrepreneurs benefit from additional coverage tailored to how and where they operate.
Home-Based Business Insurance
If you run any part of your business from home, don’t assume your homeowners insurance has you covered. Many people are surprised to learn that personal policies typically exclude business-related claims — even those that happen under their roof.
A robust home-based business insurance policy will keep you from having to pay out of pocket for things like legal fees, lost income and property damage.
Commercial Auto Insurance
Your personal auto insurance likely won’t adequately protect vehicles you use for business purposes like deliveries, client visits or transporting equipment. Commercial auto insurance has higher coverage limits and applies to a broader range of vehicles and uses. Whether you own a single work van or manage a small fleet, this policy protects you on the road.
Confidently Protect Everything You’ve Built
Strock Insurance has provided our clients with competitive, comprehensive insurance coverage for over 40 years. With our array of insurance solutions for small business owners, our team of experts can work with you to find the perfect combination of policies to protect you and your business against any incident.
Contact us to request your complimentary quote today.
