Business interruption insurance, also known as business income insurance, is one of the most important types of coverage for small businesses. It helps to cover lost income or operating expenses if a disaster occurs, such as a fire, flood, theft, building collapse, or civil authority incident. This type of insurance can be included in a Business Owners Policy (BOP). Corporate liability insurance is also essential for small businesses, as it provides financial stability in the event of a lawsuit.
A general liability policy pays for legal costs and settlements or judgments. Commercial property insurance protects the physical location of the business and its equipment, computers, and office furniture. This policy covers owned and leased business equipment, tools, inventory, supplies, valuable documents, and business records. It also covers outdoor accessories such as signs and fences.
Hazards covered by commercial property insurance include lightning, wind, hail, fire, theft, and acts of vandalism. Business interruption insurance replaces lost income if the business must close temporarily due to a loss covered by the policy. Other hazards covered by this type of insurance include theft, wind, and falling objects. It covers money lost due to merchandise damage, loss of revenue, and additional expenses such as having to move the business to a new location. A BOP combines general liability insurance, commercial property insurance, and business interruption insurance into one affordable package. Business insurance requirements vary from state to state and the names of individual coverages may not be consistent across different companies.
Nearly every business can benefit from liability protection such as a BOP, management liability insurance, professional liability insurance or product liability insurance. Small businesses with movable commercial assets can take out inland marine insurance to protect their equipment, products or materials while in transit by truck or train. BOE (Business Overhead Expense) insurance covers the cost of running the business if the owner becomes disabled and can no longer operate it. Errors and omissions (E&O) insurance protects companies from the cost of damages or injuries that occur as a result of professional services provided by the company. To help clarify the types of commercial insurance available, here is a list of some of the most essential ones offered by Nationwide: general liability insurance, commercial property insurance, business interruption insurance, inland marine insurance, BOE (Business Overhead Expense) insurance, errors and omissions (E&O) insurance. By understanding these types of commercial insurance, you can ensure that your business is properly covered in case of an accident or disaster.
One way to protect your small business against the inevitable is to purchase small business insurance.
