What Types of Insurance Do Business Owners Need?

If you own or rent a workspace, you'll likely need a business owners policy (BOP). Most small businesses need general liability insurance and commercial property insurance when they rent or own an office or other commercial space. On top of that, contracts with customers often require general liability coverage. Virtually every small business owner or contractor should have some type of general liability insurance.

When you buy small business insurance and compare policies, keep in mind that your rates will depend on the specific characteristics of your company. Sometimes referred to as errors and omissions insurance (E&O), professional liability insurance is a must for business owners who work directly with customers who offer services or advice. Professional liability protects your company from claims of negligence, non-compliance, or inadequate provision of services. Commercial property insurance will cover the cost of repairing or rebuilding your business's physical structures if it is damaged by fire, hail, theft, wind, smoke, or vandalism.

This insurance generally covers buildings, not other types of “properties”, such as vehicles in a commercial fleet. Vehicles are covered by a commercial vehicle policy. Property insurance sometimes includes a “business interruption” add-on, which will reimburse you for lost income related to property damage. For example, if your auto repair shop is damaged by a fire and only half of the bays are working, property insurance with an additional business interruption clause would pay for the repair of the building and reimburse you for lost income while operating at half its normal capacity.

General liability insurance

helps protect your business if someone suffers bodily injury, property damage, or other types of injuries as a result of your business operations.

A policy for business owners covers liability and commercial property claims. Liability coverage includes customer injuries, damage to other people's property, and advertising injuries. Commercial property insurance protects your commercial building and its contents. Business personal property is movable property that your company owns and uses, such as furniture, machinery, inventory, and electronic products. There isn't one type of insurance that meets the needs of all businesses; you'll need a mix of business insurance plans depending on your location, company, and industry.

BOE insurance covers the cost of running your business (based on actual expenses, including utility bills and employee salaries) if you become disabled and can no longer operate your business. The BOP for travelers includes many specialized coverages that can be adapted to the unique risks your company faces. A BOP offers liability coverage for customer injuries, property damage, and product-related claims, in addition to coverage for commercial buildings and movable property. Protect your business against losses caused by physical and technological disasters with policies such as business interruption insurance and cyber insurance. Nearly every business can benefit from liability protection, such as a business owners policy, management liability insurance, professional liability insurance, or product liability insurance.

One way to protect your small business against the inevitable is to purchase small business insurance. If a disaster occurs (such as a fire, flood, theft, building collapse, or civil authority incident) and your business must close for a period of time, business interruption insurance will help you cover lost income or operating expenses, such as mortgage or rent, loan payments, taxes and payroll. A business owners policy (BOP), combines the most common types of property and liability insurance that a business owner needs into a practical, comprehensive package at a competitive price. This type of coverage is ideal for owners of small and medium-sized businesses, such as restaurants, retail stores and wholesalers. 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. BOP coverage is a great option for small and medium-sized businesses with commercial properties such as restaurants, retail stores and offices.

Liability insurance for data breaches or cyberattacks protects your company if you are sued, penalized or lost business due to a cyber attack or hack. Business owners insurance also known as BOP insurance is a policy that combines property and liability coverage in one package.

Jenny Kizzia
Jenny Kizzia

Professional food ninja. Proud coffee expert. Friendly pop culture guru. Certified beer buff. Beer scholar.