Businesses have a few different ways they can purchase insurance. If you own a business, you can get a stand-alone insurance policy, business owner's policy, or commercial package policy to protect your business. Here's a look at each of these three options to see which is most useful to you.
When Just One Insurance Coverage Is Needed
If your business only needs one type of insurance, a stand-alone policy will be the best choice. The other options are both package policies and therefore, make little sense when multiple protections aren't needed.
Few businesses need only one insurance protection because most face a variety of potential risks. If you run a basic small business that has few assets, however, you might be able to get by with one general or professional liability policy.
For instance, if you're a writer, a professional liability policy might provide all the coverage you need. It will help protect you in the event that you make an error or omission, and you might not need coverage for an office, car, or any other physical property. Computers are often affordable enough that writers can purchase a new one without filing an insurance claim.
However, most other types of business will need more coverage than this.
When a Specific Coverage Is Required
In some situations, businesses are required to carry a specific insurance coverage that's not available through any package policies. This most often happens with workers’ compensation insurance, which businesses with employees usually must carry by law. This type of insurance often isn't available with other policies.
Should your business need workers’ compensation insurance, you'll likely have to purchase it as a stand-alone coverage regardless of what other insurance coverages you get. Depending on your state, you might get it through a private marketplace or a state-run platform.
You may need other, specific types of insurance too. A licensed insurance agent can help acquire a policy in your state regardless of how policies are bought.
When Basic Coverages Are Needed
Many small businesses and a few medium-sized ones want multiple insurance coverages but have fairly basic needs. For these businesses, a business owner's policy is best.
A business owner's policy is the most basic kind of package policy made for businesses. Most of these policies include a combination of:
- Commercial property coverage, which covers a building or other commercial space
- General liability coverage, which covers certain common liability lawsuits
- Business interruption coverage, which covers sustained losses of revenue
Some business owner’s policies also offer commercial auto coverage as an option, and cyber liability coverage is becoming increasingly common as online threats and data breaches become more significant risks.
Unless you operate a very simple, complex or unusual business, you're most likely going to want a business owner's policy. You'll get all the protections that most small businesses need, and you'll save a lot by bundling the coverages together into a package policy.
When Lots of Coverages Are Needed
Medium and large businesses frequently settle on a commercial package policy.
Commercial package policies are similar to business owner's policies in that they bundle several coverages together. Commercial package policies, however, offer many more coverage options and are far less uniform in the protections they provide. They include lots of optional protections so that businesses can create customized solutions for their particular situations.
If your business has grown beyond the size of a typical small business, you'll likely want a commercial package policy. A business owner's policy likely won't provide all the protection that's needed, and a commercial package policy will after you work with an agent to select what coverages should be included in the policy.Each of these insurance options has its place. For further help deciding what kind of commercial insurance you should purchase for your business, contact us at Advanced-Insurance.Net.