Running a business means balancing opportunities with their associated risks. Commercial insurance is one of the most valuable tools businesses can have to help protect against threats. In this blog, we review the key risks that businesses face and how commercial insurance can help businesses defend themselves.

What is commercial insurance?

Commercial insurance, also called business insurance, is designed to protect businesses against various types of financial risk. Unforeseen events and their aftermath can be devastating; commercial insurance provides a safety net that can help a company recover from a wide range of challenges.

What are the risks commercial insurance helps cover?

The main risks that commercial insurance can help mitigate are:

  • Property damage and loss
    Property damage can run from minor water damage all the way to complete loss of the company’s assets, including buildings, inventory, furniture, equipment and technology, and vehicles.
  • Business interruptions
    Business interruptions occur when a company needs to shut down or scale back operations. These shutdowns could be due to natural disasters, fire, or other causes.
  • Liability claims
    There are numerous reasons why a company could face a liability claim, including physical injuries, product defects, property damage, and environmental damage.
  • Professional negligence
    Professionals in various fields run the risk of making a mistake or overlooking something they should have noticed.
  • Workplace injuries and illnesses
    Workers may be injured on the job or may contract work-related illnesses. Many jurisdictions require businesses to be insured against these risks.
  • Automobile accidents and related damage
    Vehicles that are owned by a company and are being used for company purposes can pose risks, ranging from damage to the vehicle itself to serious physical injuries.
  • Environmental damage
    The possibility of environmental damage is not limited to companies that deal with toxic substances. For example, construction companies may inadvertently damage wildlife habitats, improper waste disposal can result in contamination of soil and groundwater, and transportation companies can have very high emissions if their vehicles are not properly maintained. Careful attention to regulations is the best way to mitigate these risks, but commercial insurance offers excellent protection against oversights and errors.
  • Cyber-attacks
    Cyber criminals regularly attempt to gain access to companies computer systems and digital records with the intention of manipulating or stealing them. Cyber-attacks can altogether disable a company and can be very costly to recover from.

What are the different types of commercial insurance?

There are several key types of commercial insurance that most businesses should have, as well as policies that cover very specific risks. Note that many policies can be tailored to meet a specific company’s needs via riders and add-ons. Businesses can benefit by seeking the advice of an insurance advisor or risk management expert when they are reviewing their insurance needs.

  • Commercial general liability insurance
    General liability insurance for businesses helps protect the company against a wide range of third-party liability claims, including physical injuries, damage to the third party’s property, defective products, slander and libel, false advertising, intellectual property theft, and copyright infringement.
  • Commercial property insurance
    Property insurance helps protect a business against damage to buildings, inventory, equipment, and machinery belonging to the business.
  • Business interruption insurance
    Business interruption insurance helps the company recover when it needs to close or scale back its operations due to a physical loss to your property. The purpose of this insurance is to protect the revenues that the company has missed out on, as well as help with expenses like fixed costs, employee salaries, and the lease of temporary facilities.
  • Commercial auto insurance
    Vehicles owned by your business and used for company purposes, including personal vehicles, should be covered by a commercial insurance policy. Commercial auto insurance can help protect the company from damage to their vehicles, injuries to the occupants of the vehicle, and liability claims. Individuals who work from home, gig workers, and contractors should all consider commercial vehicle insurance if they use their personal vehicle for work reasons.

Keep your business safe with commercial insurance

Unfortunately, you can’t always control what happens to your business. You can, however, control how prepared you are. Having the right protection in place can make a huge difference. To learn more, visit our business insurance page today.

This blog is provided for information only and is not a substitute for professional advice. We make no representations or warranties regarding the accuracy or completeness of the information and will not be responsible for any loss arising out of reliance on the information.