Commercial insurance vs. personal insurance: What’s the difference?
The main difference between commercial and personal insurance is the scope of coverage. A commercial insurance policy, such as workers’ compensation, covers various aspects of your entire business. In this case, workers’ compensation provides explicit coverage for medical costs and a portion of lost wages if an employee becomes injured or ill on the job.
On the other hand, personal insurance, such as private life insurance, is designed to cover an individual’s needs. Private life insurance is typically purchased by individuals and families to cover death-related expenses.
Key coverages offered by a commercial insurance policy
Typical components of commercial insurance include:
You may need multiple coverages depending on the specific needs of the business.
What factors should business owners consider when determining the appropriate coverage?
Businesses that risk losing property, materials, or money should consider purchasing commercial insurance. Other factors include:
- Risk management: Commercial insurance helps businesses manage and mitigate risks, ensuring they can weather unexpected events without facing financial challenges.
- Industry requirements: Different industries have specialized commercial insurance policies addressing the unique risks they encounter.
- Legal requirements: Commercial insurance is legally mandated in many cases, depending on your business type and location.
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