Types of Commercial Insurance

Nothing can be more exciting as a new business owner than the day you open your doors for the first time and announce to the public that you are open for business. As you are working up to that day however, make sure you don’t get lost in the details and miss out on one of the most critical components of starting a new business, which is commercial insurance coverage. Here is a look at some of the categories of that type of coverage and what each entails.

Commercial Liability Insurance

Commercial liability insurance provides protection and pays for any type of damages to property or bodily injury suffered where you are responsible. This includes medical expenses as a result of an incident which happened either on the property you own, or at a place that you have rented. This policy also covers any type of damages or injuries suffered as a result of any types of products that your company makes or sells. It also covers payments for court fees, attorney costs and other extra expenses needed to defend your company in the event a liability lawsuit is brought against you.

Commercial Property Insurance

Commercial property insurance or building insurance provides payment to the insured for any losses suffered because property was destroyed or else damaged. This includes the land, buildings as well any personal property was located on the land. For the building, this covers the building itself, plus any additions that were made, permanent interior fixtures, equipment and machinery. The basic coverage will protect you from damage suffered as a result of fire, hail, vandalism and lightning.

For things not covered by the policy, such as flooding, water damage, breaking glass or falling objects, additional insurance policies are available for purchase that would provide your business with additional coverage.

The value of the property can be determined either by the replacement cost or the actual cash value replacement cost. Actual cash value looks at the cost to replace the damaged property, less any depreciation as a result of age and the condition it was in. Depending on what option you choose for value, you will pay more or less for the insurance policy.