Insurance companies selling business insurance offer policies that combine protection from all major property and liability risks in one package. (They also sell coverages separately.) One package purchased by small and mid-sized businesses is the business owners policy (BOP). Package policies are created for businesses that generally face the same kind and degree of risk. Larger companies might purchase a commercial package policy or customize their policies to meet the special risks they face.
- Property insurance for buildings and contents owned by the company — there are two different forms, standard and special, which provides more comprehensive coverage.
- Business interruption insurance — which covers the loss of income resulting from a fire or other catastrophe that disrupts the operation of the business. It can also include the extra expense of operating out of a temporary location.
- Liability protection — which covers your company’s legal responsibility for the harm it may cause to others. This harm is a result of things that you and your employees do or fail to do in your business operations that may cause bodily injury or property damage due to defective products, faulty installations and errors in services provided.
BOPs do NOT cover professional liability, auto insurance, worker’s compensation or health and disability insurance. You’ll need separate insurance policies to cover professional services, vehicles and your employees.
Agribusiness insurance covers property and liability risks associated with farms, ranches, wineries, and other large commercial growers. This can include farm and ranch owners’ policies and equipment breakdown policies. However, it does not cover worker’s comp claims.
Commercial airlines hold property insurance on airplanes and liability insurance for negligent acts that result in injury or property damage to passengers or others. Damage is covered on the ground and in the air. The policy limits the geographical area and individual pilots covered.
Surety bonds are a contract among at least three parties—the principal, the obligee and the surety. To benefit the obligee, the surety agrees to uphold the contractual promises made by the principal if the principal fails to uphold its promises to the obligee. These types of bonds are frequently used in the construction industry. In order to obtain a contract to build a project, the general contractor (and often the sub-contractors) must provide the owner of a bond for its performance of the terms of the contract. Surety bonds are also used to secure the proper performance of fiduciary duties by persons in positions of private or public trust.
Builder’s Risk Insurance
Professional Liability Insurance
Liability insurance will protect business assets in the event the business is sued. These days, with lawsuits clogging the courts, a business owner should maintain a proper amount of liability insurance to protect the business he or she has worked so hard to build. Any company can be sued for something it did—or even didn’t do—that resulted in injury or property damage to someone else.
The expenses of defending yourself or your business against a lawsuit without insurance can be a substantial cost to you, regardless of whether or not the lawsuit has merit. Liability insurance will cover the cost of damages along with the legal fees and other costs associated with your defense in a lawsuit. In addition, many customers will demand that their vendors hold liability insurance.
Worker’s Compensation Insurance
Insurance that pays for medical care and physical rehabilitation of injured workers and helps to replace lost wages while they are unable to work. State laws, which vary significantly, govern the amount of benefits paid and other compensation provisions.
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