Types of commercial insurance
By Leana Schwartz, Independent Commercial Insurance Agent
There are many commercial insurance types available to businesses. While property and liability insurance are the two most common, there are other options available to help businesses tailor insurance coverage to best suit their unique needs and concerns.
Specialized commercial property insurance
Property insurance covers damages and/or losses to real or personal property such as buildings and property on the premises. There are several types of specialized property insurance, including:
Boiler and machinery insurance
This type of insurance is also called “equipment breakdown” coverage and provides coverage for loss if certain machinery—boilers, equipment, production machinery, etc.—accidentally break down. This insurance will cover any losses for covered property by a recognized risk.
Builder’s risk insurance
This type of insurance covers buildings under construction and any damages and/or losses which may arise due to a covered risk.
Business interruption insurance
Business interruption insurance covers any resulting expenses or lost income following a covered loss. For example, if a business had to be closed for repairs to the roof, this insurance would cover rent, taxes, salaries, and any other expenses that arose during the closure time.
Debris removal insurance
This type of insurance covers costs involved in removing any debris left over following an event such as a flood, fire, earthquake, etc. While most property insurance covers the cost of rebuilding and replacing damaged property, these policies generally do not cover debris removal costs which—depending upon the size of the property and type of damage—can be substantial.
Types of commercial liability insurance
The second primary type of commercial insurance is liability insurance, which covers damages or injuries caused to third parties and/or employees. If a business owner is sued for property damages and/or personal injuries, liability insurance helps defer the costs of expensive litigation and/or any awards to third parties. As is the case with property insurance, there are several types of specialty coverage, including:
Data breach insurance
This insurance protects businesses that are responsible for and store non-public and/or sensitive information about clients and/or employees on their computers, in paper files, or on computer servers. In the event of a breach, the business is protected against the costs of resulting litigation.
Directors’ and officers’ liability insurance (D&O)
D&O insurance coverage works to protect a company’s financial assets from legal action if a company’s directors and/or officers are accused of wrongdoing or neglect.
Errors and omissions insurance (E&O)
E&O Insurance coverage comes into play in the event that the business — its owner, an employee, or its agents — commits an error or act of negligence in the course of business that results in a loss for a client.
Also called professional liability insurance, this type of coverage pays for any losses sustained when a third party is injured when a professional’s conduct fails to conform to the profession’s standard of care. This coverage pays litigation costs and other fees if the professional is sued. Malpractice insurance is common among doctors, dentists, architects, accountants, and other professionals.
Workers’ compensation insurance
Workers’ compensation insurance covers an employer for any job-related injuries and losses sustained by employees. Not only does this type of insurance directly help injured workers but it also protects the employer from being sued by the injured employee.
Do you have questions about different types of commercial insurance coverage for your business? Contact Long Beach independent insurance agency NHC Insurance Services. NHC serves clients in Long Beach and the greater South Bay area of Los Angeles, including Signal Hill, San Pedro, Wilmington, Lomita, Torrance, and surrounding communities.
Photo courtesy Al Pavangkanan