Business Insurance Basics

Every business needs insurance to protect against potential loss or damage. Commercial general liability and property coverage are two of the most basic forms of business insurance.

Business Insurance Basics: Business Liability Insurance

Commercial General Liability

Commercial General Liability (CGL) policies cover four types of claims: bodily injury resulting in actual physical damage or loss, property damage or loss, personal injury (including slander or libel), and advertising injury. Often, it is offered in a package with Property coverage at very competitive rates.

Commercial liability insurance is not expensive but the cost to defend a claim can be catastrophic. One benefit of carrying general liability insurance is that for covered claims, damages, legal defense fees and settlement charges are all paid by the insurer up to the limits of the policy.

Your Techinsurance agent can provide you with recommended coverages and limits for your business liability insurance. He or she can also discuss with you optional coverages, or endorsements, you might wish to purchase for added protection against certain risks. If necessary, an Umbrella Liability policy can be purchased separately to extend coverage well above the limits of your standard commercial general liability policy.

Business Insurance Basics: Property Coverage

Property insurance protects your business property against physical loss or damage by theft, fire or other means. Because every business has property that could become lost or damaged, this form of business insurance is one of the first things you should buy when you start a company.

Property coverage can be structured several ways. In the most basic business insurance policies, Property coverage protects your furniture, computers, office equipment and other materials.

For many businesses, the most basic Property coverage is not enough. You may need a policy that insures data, papers, records, money and securities kept at your place of business. Sometimes this coverage is included in a basic Property policy (it may be listed as Valuable Papers or Media and Extra Expense coverage); if not, it can usually be purchased as an extra endorsement to your standard policy.

Business Insurance Basics: Package Policies (BOP)

Package Policies Combine General Liability and Property Insurance

When you evaluate business insurance, consider a package policy such as a Business Owner's Policy (BOP). A BOP combines Property coverage and General Liability insurance in a single business insurance policy.

You may find that by combining Property and General Liability insurance into a BOP, you can get better business coverage at lower rates than you would get from two separate policies.

Advantages and Exclusions to Business Owners Policy (BOP)

Not every business is eligible for BOP coverage. Business Owners Policy packages are especially designed for small- to medium-sized business operating in a low-risk business class. The BOP includes Commercial General Liability insurance and Property insurance for physical assets, such as office furniture and computers. The package policy may also cover loss of business income and extra expense.

A BOP generally insures lost or damaged property for replacement value, which means you'll receive enough from your settlement to replace the property at today's market value. The Property portion of a BOP also covers other people's personal property to the extent it would be covered under a standard Property policy.

The Liability coverage of a BOP is comparable to a typical Commercial General Liability (CGL) policy, providing protection against claims of bodily injury or property damage. The Liability portion also covers the cost of defending lawsuits that claim you are responsible for causing bodily injury or property damage. (Note: BOP Liability does not protect against professional errors or negligence normally covered by Professional Liability business insurance.)

Workers' Compensation Insurance

Professional Liability Insurance

Commercial Automobile Insurance

BOP packages only satisfy a company's needs for Property and General Liability insurance. You will want to speak with your Techinsurance agent to obtain other appropriate forms of business insurance, including Workers' Compensation, Professional Liability, Employment Practice Liability, Commercial Automobile and other coverages your company may require.