What is commercial insurance?
Commercial insurance means insurance that protects you from any unforeseen circumstances that could affect your business.
You've probably heard of insurance in the context of things like personal auto insurance, house insurance or life insurance. Those are personal insurance plans. When you own a business, it's a good idea — and sometimes legally required — to have commercial insurance, also known as business insurance.
Some of the most common types of commercial insurance include:
General Liability insurance
General liability insurance is the most basic level of insurance that covers you in cases where there's an accident and your business might be blamed for it. It generally covers three kinds or risks up to your policy limit:
- Bodily injury to anyone that is not an employee
- Damage to property that doesn't belong to you
- Accusations of copyright infringement, libel or slander
Note that general liability insurance only applies in cases where the damage was to a third party — meaning, not to you, your business or one of your employees. There are other types of insurance that can help in those situations.
Professional Liability insurance
Professional liability insurance is also known as errors & omissions insurance or malpractice insurance. Sometimes the difference between professional liability and general liability can be hard to pinpoint, but in general, while general liability can cover you when there's an accident, professional liability coverage helps in cases where you are accused of a professional mistake. For example, if you are a fitness instructor and you told your client to do something that caused her to fall and hurt herself, you might be accused of making a professional error or professional negligence.
Commercial Auto insurance
If you use a vehicle for your business, commercial auto insurance can provide coverage that is not available with personal auto insurance. It's often required by state law in if you have vehicles registered under your business. Commercial auto insurance might have higher limits and cover different types of risks than your personal auto insurance. It can also cover multiple drivers and/or a larger geographic area. Learn more about personal auto vs. commercial auto insurance.
Workers' Compensation insurance
If you have employees, most states require you to have workers' compensation insurance. It helps cover the costs medical expenses and lost wages if you or an employee is hurt on the job. of damage that might happen on the job: for example, if you're a contractor and one of your workers drops a hammer on his toe while working on a project. Another example might be if you're a caterer with multiple employees and one of your workers gets attacked by the family dog of a client. Worker's comp can help cover their medical fees.