Running a business is hard enough without worrying about things like property damage, liability, and employee accidents. That’s where commercial insurance comes in. Though the law has not made it compulsory, most businesses choose to buy commercial insurance because it provides peace of mind and can help protect the company from a loss.
There are many different types of commercial insurance, and each one serves a specific purpose. Each business needs to look at its specific services and needs to determine what type of commercial insurance coverage is best for them. Here are five common reasons why businesses have commercial insurance.
1- Property Damage
As a business owner, damage to business properties is very common. These properties include office equipment, furniture, inventory, and any buildings or structures you own. Damages are usually unplanned and sometimes unbudgeted. Property insurance helps cover the cost of repairs or replacement if your business’s property is damaged.
Suppose your business is located in a high-risk area for natural disasters like floods or earthquakes. In that case, commercial insurance can help protect you from the financial loss of having to replace everything.
It is possible to reduce injuries in a business, but they sometimes occur. In the event of an injury, product liability, or professional liability, someone can sue your company. You need to protect your business from liability claims.
Commercial insurance can help cover the cost of legal fees and any settlements or judgments that you may have to pay. Without insurance, you would be responsible for paying these costs out of pocket, which could quickly bankrupt your business.
Theft is common, especially for businesses that keep a lot of cash on hand or have high-value inventory. Commercial insurance lowers your burden by covering the cost of replacement if your business is burglarized or your list is stolen. In some cases, it can also help cover the loss of income if your business has to close for some time while the police investigate the theft.
If you are in a profession requiring you to have malpractice insurance, such as law or medicine, you will need to purchase commercial insurance. This type of insurance protects your business from liability if anyone sues you for professional negligence. Without it, you would be responsible for any damages that a court awards to the plaintiff.
5- Business Interruption
Business closure due to a fire, flood, or other disaster is a familiar story. Commercial insurance can help cover the loss of income. If you need to relocate temporarily, the insurance can cater to the expense while the repair is ongoing. A minor interruption in your business can make you see significant losses if you do not have enough money to pay up for relocation and repair.
Insurance is an essential part of risk management for businesses. It can help protect your company from property damage, liability, theft, malpractice, and business interruption. While no insurance policy can cover every possible eventuality, having the right policies can go a long way towards mitigating risk.