When it comes to insuring a business, there are a variety of different types of insurance to consider.  Insurance coverage can provide a safety net for the various risks you face, but the cost and the amount of coverage will vary.  This is where an experienced independent insurance broker can provide real value.  Unlike a captive agent which only represents one insurance company, an independent broker can evaluate and recommend policies from multiple insurance companies, ensuring that the policies that you review are the best fit for you and your business.

The first type of insurance you should consider is liability insurance. There are several different types, including general, product, and professional liability insurances. Each of these types of insurance cover your business against certain events which liability or blame may be assigned to you.

General Liability Insurance

General liability insurance gives you protection in legal issues due to accident, injuries, and claims of negligence. A general policy protects you from having to make out of pocket payments stemming from issues like property damage, libel, lawsuit costs, bodily injury, libel, medical expenses, or bonds or judgements incurred in the legal process.

Product Liability Insurance

If you touch inventory or product in any way, you may be liable for the product’s safety in the general market. Product liability insurance insures manufacturers, distributors, retailers, and others involved in product development and sales against financial loss from defective products causing injury or bodily harm. You will need more product liability insurance for products of higher value and higher likelihood of quality issues. For example, a store selling printed t-shirts will face significantly less financial exposure from their product failure than a car dealership would.

Professional Liability Insurance

If you provide a service as a routine part of business, professional liability insurance (sometimes called errors and omissions insurance) covers the risks you incur. These risks include malpractice, errors and negligence in providing services to customers. While most people have heard of medical malpractice insurance (a type of liability insurance), there are other industries besides medical that may consider getting professional liability insurance.

General, product, and professional liability are different types of liability insurance, but they are not the only insurance policies a business owner may need to consider. While liability insurance protects you in the event something happens, property insurance protects your business, brand, buildings, papers, technology, etc.

Commercial Property Insurance

Property insurance covers property related events including fire and smoke, wind and hail storms, civil disobedience and vandalism. Property insurance protects any “property” your business owns including income, business services and the more traditional hard assets like buildings, technology, papers and money.

Like liability insurance, property insurance comes in specific types. The two basic forms are all-risk policies and peril-specific policies. All-risk policies cover a large amount of low risk events. In an all-risk property insurance policy, it is important to take note of which events are specifically exempted from the insurance. On the other hand, a peril-specific policy covers specific perils that are usually either higher risk or higher cost and so they need their own policy. For example, in states with large amounts of flooding, many all-risk commercial property insurance policies will specifically exempt flood insurance. If so, then you should buy a flood property insurance policy to protect your business against floods specifically.

Home-Based Business Insurance

Contrary to popular belief, homeowner’s and renter’s insurance do not generally cover business losses in the event of a claim. Although you can add business property as a rider to many policies, you will need to look at other risk aspects of running a home based business and possibly get unique policies to cover your liability and risk-specific insurance to protect your business.

Whether you are running a business out of your home, a co-location spot, or any other location, your insurance agent or broker can help you understand and decide which type of insurance works best for your business.