The Four Food Groups of Business Insurance

Just like you need balanced meals to keep your health in check, your business usually needs several types of insurance to maintain its financial health when the unexpected occurs. The Entrepreneur excerpt suggests every business needs the following four types of coverage:

  1. Commercial Auto Insurance. If your business owns vehicles or uses them for work purposes, know that your personal auto policy usually won't do. You must insure your vans, trucks, or cars with Commercial Auto Insurance to get the appropriate liability and damage coverage. And if you rely on your employees to use their personal vehicles to run business errands, you can still be held liable for any accidents that happen on those brief jaunts. For those instances, you'll want to have Hired and Non-Owned Auto Insurance on hand.
  2. Commercial Property Insurance. Whether you own or rent commercial space, you need Commercial Property Insurance to protect your business assets from loss or damage caused by theft, fire, windstorms, or vandalism. This policy can provide coverage for replacement or repair costs when your building, its contents, and your equipment are damaged by a covered event. Worth noting: a standard Property Insurance policy usually can't cover hurricane, flood, or earthquake damage without the appropriate rider.
  3. Workers' Compensation Insurance. Nearly every state requires you to carry this policy, which helps pay for medical expenses, replacement wages, and disability or death benefits when your employees suffer occupational injuries. You can learn about your state's requirements in our guide "Workers' Compensation Laws by State."
  4. General Liability Insurance. Though the Entrepreneur excerpt refers to this policy as "comprehensive general liability insurance," be aware that the proper name is Commercial General Liability Insurance. This policy can help pay for legal expenses when a visitor is hurt on your property or when your business accidentally damages someone's property during the course of its work (e.g., an employee drops a client's laptop). It can also address lawsuits over advertising injuries (e.g., your business is accused of copyright infringement). Some small-business owners make the mistake of thinking this bread-and-butter insurance policy will cover all their liabilities. This policy addresses accidents, but you'll need Professional Liability coverage to address work mistakes. (For more on that, read "General Liability Insurance vs. Professional Liability Insurance.")

To be fair, the excerpt briefly mentions that Errors & Omissions Insurance would also be nice to have, but we are going to take a hard line on that one. If your business offers professional services, Professional Liability Insurance should be considered a foundational business insurance policy, too. Call the REGION Insurance Group team today at 219-213-2306 to get a quote!