The Importance of Insurance

Four Common Types Of Business Insurance

16 January 2018

Katrina Terry

Every business needs to have an insurance plan to protect it against a variety of legal and financial dangers, but not every insurance policy is the same. There is a wide range of different options available, each of which provides coverage against a different range or type of dangers to your business. Understanding the differences between the four most common types of business insurance policies can help make it easier for you to choose the one that best suits your needs.

Professional Liability Insurance

Professional liability insurance is designed to cover your business in the event that certain errors that you make in your business end up costing your clients a great deal of money. This is particularly relevant for professional financial services, including insurance companies themselves, financial advisors, accountants and lawyers, since even well-intentioned decisions can sometimes lead to extreme hardship for their clients.

Property Insurance

Property insurance, on the other hand, is arguably the most common type of business insurance that is designed to reimburse your company in the event that any of your physical property, which can range from owned buildings like offices and real estate to physical inventory sold in retail or digital marketplaces, becomes damaged. Various types of property insurance plans are available, simply by virtue of the wide range of different objects that they can cover, which means that you can customize your plan to protect against the most likely forms of damage, including water damage, weather damage, and vandalism and theft.

Workers' Compensation Insurance

Workers' compensation insurance is mandated for businesses to have in most states and covers your business against injuries that your employees may suffer while on the job. This is necessary even for businesses that aren't physically strenuous and for workplaces that make use of volunteers and seasonal workers, as any sort of injury that they sustain at the workplace that prevents them from coming in to work and effectively contributing would allow them to apply for workers' compensation – which can be especially costly if your company is found to be at fault.

Home-Based Business Insurance

Like its name would suggest, home-based business insurance is designed for businesses that are run out of residences. This is because standard homeowner's insurance does not cover damage to any business-related items or inventory, which means that standard natural disasters and damage like flooding, hail damage, or heavy storms will require you to pay out of pocket for any business damage that you incur if you don't have business insurance to cover the cost.  

For more information about these and other insurance types, such as commercial liability insurance, contact a local insurance company. 

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