4 Types of Commercial Insurance Your Business Needs

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Every business requires a few essentials to achieve a stable and profitable operation. Your business plan, startup capital, and business filings are key to securing stability in the early stages, but what about later on? Commercial insurance is paramount for any business, especially those in client-facing industries.

Accidents happen, and unfortunately, so do lawsuits. A commercial insurance policy is the best way to protect your business and its assets, and there are a variety of options. Whether you operate a brick-and-mortar retail store or a professional office space, commercial insurance is always a good idea. Here are four types of commercial insurance that your business needs and why:

1. Commercial General Liability Insurance

The first type of commercial insurance you should consider is commercial general liability, which provides liability insurance for general business risks. This is the first type of coverage that businesses purchase, since it covers many common risks like property damage, bodily injury, and medical payments.

If your business is found liable for third party injury or property damage on or off your premises, you would be covered under a commercial general liability policy. However, this type of insurance specifically excludes certain types of risks — for full details, contact your insurance broker. That’s why it’s important to purchase multiple types of insurance, such as those explained below.

2. Property Insurance

When you invest in a property, you will also invest in equipment — whether tools for your professional trade or simply desks, computers, and other standard furnishing. It’s important to ensure that your property and its contents are protected from loss or significant damage.

Commercial property insurance protects your business by covering these essential items, as well as assets like inventory. This type of insurance is ideal for small business owners because it provides financial reimbursement to the legal occupant of a building and its contents, in the event of damage or theft. For more details on your specific policy, you should contact your insurance broker.

3. Business Interruption Insurance

If your operation is interrupted by a natural disaster, property damage, or theft, chances are you’ll be missing out on revenue during downtime. Replacing your property can be costly enough as is, and having to make up for lost income on top of that just adds insult to injury.

Business interruption insurance protects your business beyond property insurance, covering  incidents that might disrupt your earning ability. This includes things like revenue, rent or lease payments, relocation downtime, employee wages, taxes, and loan payments. Business interruption insurance is ideal for all businesses, since it’s designed to return your business to the same financial position as if no loss had occurred.

4. Cyber Liability Insurance

The last type of insurance you should consider is called cyber liability insurance. If you or a third party partner (usually one of your clients) is harmed by online activity, you could lose out on revenue or face a lawsuit if your clients are affected.

Cyber liability insurance can protect you from four main types of risks, depending on the scope of your coverage:

  • Privacy Liability: This involves breaches of physical records like improper disposal of documents, a lost laptop, or a customer’s account information sent to the wrong email address.
  • Network Security Liability: A network security failure can expose important information to unintended recipients. Network security provisions can cover you in the case that a client’s trade secrets or patent applications are exposed, due to a failure of your security.
  • Media Liability: Media liability is the infringement of intellectual property, copyright/trademark infringement and libel or slander. This is important for service businesses, in the case that you misrepresent a client’s information.
  • Errors and Omissions Liability: Errors and omissions liability involves the performance of your services. This includes tech services like software and web development to more traditional services like consulting. If you make an error that costs a client money, you could face a lawsuit.

Your policy may cover you from all, or only a few, of the risks listed above. To confirm your coverage, you should contact your current insurance provider.

These four insurance policies are an essential part of any stable and successful business. They protect you from the unexpected and provide peace of mind to all parties involved.

At Oakville Insurance Brokers, we specialize in commercial insurance policies and can help you decide which policies are right for you. Call us at 905-845-0391 or contact us here.

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