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A primer on the eight types of insurance for your business

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Organizations rely on business insurance to protect them from risks and threats to their operation.

 

Simply, it means transferring risk to insurance products.

There are various types of insurance for your business. A broker can help choose the right mix of insurance for your business by determining which coverages meet your exposures and risk appetite.

Then, your broker will present your risk to an underwriter who will set pricing for coverage.

While some brokers specialize in insuring specific types of business, others will place policies specific to your business activities.

Here are eight types of insurance needed by many businesses:

<PROPERTY INSURANCE

Property insurance covers the contents of a business from such events as fire, theft, break-in, flood and other severe weather events. A covered property includes those owned, rented or leased.

Coverages can include cyber intrusions, injuries sustained while operating company equipment and often crime coverage. Coverages usually are grouped in one policy.

<COMMERCIAL AUTO INSURANCE

Commercial auto insurance covers your business for loss or damage to vehicles used on company business, as well as damage to others caused by someone driving a company vehicle.

Events occurring while a vehicle is used for business are not covered under a personal auto insurance policy, even if the vehicle is used for both business and personal purposes.

<LIABILITY INSURANCE

Liability insurance covers a business in the event someone sues it for bodily injury or property damage. Typical events include slips and falls, failure to perform professional duties, and errors and omissions resulting in client financial loss.

Liability insurance does not protect against liability resulting from crimes or intentional torts committed by the insured.

<PRODUCT LIABILITY INSURANCE

Product liability insurance for your business covers bodily injury or property damage caused by a product designed, supplied and/or manufactured by your business.

<BUSINESS INTERRUPTION INSURANCE

According to Business Insider, a small business probably won’t survive if it does not resume operations within 10 days following a natural disaster. Without the right insurance for your business and access to funds to get operations back to normal, there is little hope of survival.

This insurance can prevent this by making up for lost cash flow and lost profits because an event interrupted normal business operations.

<HEALTH INSURANCE

This insurance provides health coverage for management and employees.

<KEY PERSON INSURANCE

Key person insurance compensates a business for financial losses arising from the death or extended incapacity of a key member of the team.

A key person does not have to be an executive, but any employee whose knowledge, work or overall contribution has been identified as being uniquely valuable to the business.

<WORKERS’ COMPENSATION INSURANCE

All 50 states require employers to participate in workers’ compensation programs to cover the financial needs of employees injured while working on the job.

Based in Warrington, Kirk Salmon is a sales and relationship manager concentrating on the Lehigh Valley at KMRD Partners Inc., a risk and human capital management consulting and insurance brokerage firm with three offices in southeastern Pennsylvania. He can be reached at ksalmon@kmrdpartners.com.

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