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Commercial Business Insurance 101

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Commercial insurance isn’t a one-size-fits-all solution, since it provides different levels of protection to help you and your business weather a variety of unexpected events. As such, it’s an invaluable resource to have on your side. 

In this article, I’ll briefly discuss what commercial insurance is, the different coverages available, how much you might expect to pay, and where you can turn to discuss your specific needs. 

What is Commercial Business Insurance? 

As its name implies, commercial business insurance protects businesses, including their owners, employees, and stakeholders, against financial loss or threats against their success from different claims. This contrasts with personal lines insurance (e.g., home, auto, etc.), which covers individuals. 

Compared to personal insurance, commercial business policies typically feature meaningfully higher coverage limits, as businesses usually hold more physical and financial assets than individuals. There are also non-physical assets covered under a commercial policy, such as a business’s reputation and well-being.  

Like a personal lines home policy, though, a commercial business policy offers a selection of coverage limits (aka policy ‘caps’), exclusions, and deductibles that impact what you pay (more soon).

Because so many different types of businesses exist, commercial insurance has evolved to meet the needs of a wide variety of enterprises by offering many kinds of coverage. 

Which Coverages Do Commercial Business Insurance Policies Offer? 

Even basic commercial insurance policies typically protect companies against property, liability, crime, and business-related auto claims, including property damage and injury to employees. This way, businesses are insulated from clients’ lawsuits, injury to employees or customers, property theft/damage, and other unexpected events. 

Optional business insurance coverages include:  

  • Business interruption – Protects a business’s lost income caused by a natural disaster. 
  • Equipment breakdown Covers damages from ‘internal forces,’ including power surges, electrical shorts, mechanical breakdowns, motor burnouts, and operator errors. 
  • Workers’ compensation – Helps employees recover from their work-related injuries, including payment for physical therapy, lost wages, and other medical expenses. 
  • Cyber insurance – Typically intended for larger companies, this provides coverage against breaches related to sensitive customer data (e.g., social security numbers, credit card details, driver’s license info, and health records). 
  • Surety bonds – Contracts that help ensure contractors adhere to the terms of their agreement while following all applicable governmental rules and regulations.

Are There Different Types of Commercial Insurance Policies? 

Business owner policies (BOPs) combine commercial property insurance, general liability insurance, and other related coverages into a convenient package.  

There are also many different individual commercial policy types available, depending on your business’s needs, such as: 

  • General liability – The most basic form of business insurance covers bodily injury, property damage, copyright infringement, libel, or slander accusations arising from a client or anyone else who doesn’t work for the company. 
  • Commercial auto and equipment breakdown – Covers tools, automobiles, computers, desks, office environments, and other equipment required to run your business daily.
  • Workers’ Compensation – If an employee is injured while on the job, this (often-required) insurance covers their medical bills. It will also provide coverage if the employee decides to litigate. 
  • Cyber liability insurance – Covers your business against data breaches and other cybersecurity threats related to stored customer information.
  • Errors and omissions (E&O) insurance – This type of insurance goes by several terms, including malpractice insurance or professional liability insurance. Whatever it’s called, it’s designed to provide liability coverage for business mistakes, such as missed deadlines, product errors, and other oversights. 
  • Business interruption – If an unexpected accident or other event occurs and prevents your business from operating, it can help provide coverage against financial losses. 
  • Fidelity bonds – A type of insurance that reimburses your clients if theft occurred by your employees.

How Much Does Commercial Insurance Cost? 

As with any other type of insurance, what you pay for commercial insurance will depend on a wide variety of factors. In addition to the specific type of insurance, some of these factors include: 

  • Business type 
  • Number of employees 
  • Location 
  • Years in business 
  • Payroll 
  • Gross annual revenue 
  • Specific exposures, e.g., if your business owns or rents vehicles, owns/leases your building, etc. 
  • Policy limits – Most commercial liability policies start at $1 million in coverage and go up from there. 
  • Deductibles – The higher your deductibles, the lower your premium, although this means you’ll also have higher out-of-pocket costs in the event of a claim.

Related: How Much Does Home Insurance Cost Per Month? 

IHS Insurance Group is Your Source for Commercial Insurance 

You name it, and the professional staff at IHS Insurance Group has years of experience working with different businesses and risk management scenarios: commercial general liability, commercial auto and property, umbrella, workers compensation, directors and officers, builder’s risk, cyber and professional liability, and employment practices liability. 

The bottom line is that we have the knowledge to ensure your business is adequately covered at a budget you can afford. No matter what kind of company you operate, commercial business insurance is a must-have! 

Need a FREE Quote or have questions regarding commercial insurance? Please fill out our quick GET A FREE QUOTE form, and an agent will get back to you at your convenience!

We look forward to speaking with you today!

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