What Is Business Insurance.

As a business owner, your company faces different risks every day. The purpose of insurance is to help protect your business from these risks. Business insurance helps protect your business’ financial assets, intellectual and physical property from:

Lawsuits
Property damage
Theft
Vandalism
Loss of income
Employee injuries and illnesses

You can get different types of business insurance to help protect your business, including:

Commercial liability
Commercial property
Commercial auto
Workers’ compensation

Types of Business Insurance Policies
Purpose of insurance If you’re wondering, “What does business insurance cover?” We’re here to help. However, there isn’t one simple answer because there are different types of business and all of them help protect your company from various risks.

To determine what insurance you need for your business, earn what coverages suit you best. You can determine this based on your business’:

Industry
Size
Location
Number of employees

At a minimum, you may want to have liability and property coverages. And if you have employees, you’ll likely need workers’ compensation insurance. You should review your business’ insurance needs regularly, because as it grows, your required coverages can change.

Liability Policies
Liability coverage can help protect your business against claims for:

Bodily injury
Property damage
Advertising injury
Errors or omissions
Without this coverage, you may be responsible for paying out of pocket for legal costs, such as attorney fees and settlement amounts. Common liability policies include:


General liability insurance
Professional liability insurance
Commercial umbrella insurance
Directors and officers insurance
Employee Insurance Policies
What is the purpose of insurance If your business has employees, your state likely requires you to carry workers’ compensation insurance. This insurance gives your employees benefits to help them recover from a work-related injury or illness. It can also give your employee’s family a benefit if they lose their life in a workplace accident. Different factors can affect your workers’ compensation cost, such as:

Job risk
Claims history
Payroll size
Property Policies
According to the Federal Emergency Management Agency, about 40% to 60% of small businesses never reopen after a natural disaster.1 Without property insurance, it can be difficult for your business to recover from severe property damage. You’ll be responsible for replacing the damaged property, which can be expensive.

Commercial property insurance helps pay to repair or replace property damaged from:

Fires
Storms
Theft
Other covered events
This coverage can help pay for damage to your business’ physical location, tools, assets and documents. It can also help cover your business’ lost income if it’s unable to open while repairs are made.

Be aware most commercial property insurance policies don’t protect against flood damage. You’ll have to get a separate commercial flood insurance policy for your business’ property to help cover this type of claim. Get additional commercial property insurance tips.