Business insurance quote business health insurance quote small business free insurance quote
The success of any business, from a small home-based project to a large corporation, relies heavily on hard work and ingenuity. However, even the most dedicated efforts can be undone by an unforeseen tragedy. Without the right protection, a single event could wipe out your profits and even destroy your business. Appropriate business insurance is essential to safeguard the effort and money you've invested when disaster strikes.
What is Business Insurance?
Business insurance provides policies that combine protection from major property and liability risks into a single package. While individual coverages are also available, many small and mid-sized businesses opt for a comprehensive package policy. These packages are designed for businesses that generally face similar types and degrees of risk. Larger companies, however, may choose a commercial package policy or customize their policies to address their unique and specific hazards.
Common Types of Business Insurance
Business Owners Policy (BOP)
A Business Owners Policy (BOP) is a popular option for small to medium-sized businesses, bundling several key coverages into one package. It typically includes:
- Property Insurance: This covers buildings and contents owned by the company. There are two main types: standard and special, with special offering more comprehensive coverage.
- Business Interruption Insurance: This covers lost profits resulting from a fire or other catastrophe that disrupts business operations. It also covers the extra cost of operating from a temporary location.
- Liability Protection: This covers your company's legal liability for damage it may cause to others. This damage can result from actions (or inactions) by you or your employees during business operations, potentially causing physical injury or property damage due to faulty products, defective installations, or errors in services provided.
It's important to note that BOPs do not cover certain types of insurance. You will need separate policies for:
- Professional liability
- Commercial auto insurance
- Workers' compensation
- Health insurance
- Disability insurance
Business Interruption Insurance
Business interruption insurance can be as vital to your business's survival as standard fire insurance. Most people wouldn't consider opening a business without purchasing insurance to cover damage from fire and violent storms. However, many small business owners fail to consider how they would manage if a fire or other tragedy damaged their business property, making it temporarily unusable. Business interruption coverage is typically added to a property insurance policy or included in a package policy; it is not sold separately.
A business that has to close entirely while property is being repaired may lose customers to rivals. A quick resumption of business after a loss is crucial. Business interruption insurance compensates you for lost earnings if your business must vacate the building due to disaster-related damage covered under your property insurance policy, such as a fire. Additionally, this policy includes operating costs, like electricity, that continue even if business operations have temporarily ceased.
The cost of this policy is tied to the risk of a fire or other catastrophe damaging your property. For example, the price would likely be higher for a restaurant than a real estate office, due to the greater risk of fire, all other things being equal. However, a real estate agency might more easily carry on its work in another location, which could also affect rates.
Extra Expense Insurance
Extra expense insurance reimburses your company for reasonable funds it expends, beyond normal operating costs, to avoid shutting down during the re-establishment period. Generally, additional expenses will be paid if they help reduce business disruption costs. In some cases, extra expense insurance alone may provide adequate coverage, without purchasing business interruption insurance.
How to File a Business Insurance Claim
As soon as a fire, accident, or theft occurs at your business, you need to report the damage to your insurance agent. Here's a step-by-step guide:
- Contact your insurance agent and company immediately.
- Report any burglaries or theft to the police.