Business insurance is a fairly broad term, and many business owners don’t understand exactly what it means, or how it can impact the operation of their businesses. Having business insurance is required in every single state in the country, however, the specific type that’s required varies from state to state (and not all types of business insurance are required).
The most common type of business insurance (that’s required by the government) is workers’ compensation. Workers’ compensation is a specific type of business insurance, and it’s required in every state in the US. There is a lot more than just one type of business insurance, and this post aims to clarify some of the major differences between these types, as well as why your business might benefit from having more than one business insurance policy.
In addition to covering the basics of insurance, we also provide an overview of business insurance quotes from some of the major providers in the insurance space like Next Insurance. So, if you’re looking to deepen your understanding of business insurance, and learn how to find the best quote for your company, keep on reading. Below is an overview of business insurance types, as well as the basics of comparing quotes between different providers.
Main Types of Business Insurance You Need to Consider
Purchasing
There are quite a few different types of business insurance policies that you can purchase for your company. The question, though, is whether or not your business actually needs more than just a handful of policies. Many business insurance policies are very industry-specific, so if you operate in a niche industry, you might look into insurance options for that specific space. Otherwise, below are some of the more major policy options, as well as a brief overview of each policy type.
Workers’ Compensation
Workers’ compensation is required under state law in pretty much every state in the country. This insurance essentially allows a business to be able to pay an injured employee (who became injured/sick while working for the employer), and here’s the important part, in exchange for that employee not filing legal action(s) against the employer. This type of insurance is generally thought of as a “win-win” for both parties and is without a doubt one of the most widely used insurance policies in America (among businesses both small and large).
General Liability
This type of insurance is another very common policy type, and what it does is provide coverage against specific kinds of legal actions (against a business). Generally speaking, this type of policy includes protection against physical injury, property damage, and related incidents that are connected with the operation of your business. There are almost always coverage limits to these types of policies, and it’s important to understand what your policy’s specific limitations are prior to purchasing it.
Commercial Vehicle
Commercial auto insurance provides protection for your company’s vehicles, as well as the people operating them (only if they’re doing so for work-related purposes). There are a lot of states in the US that require this type of insurance (if the business operates vehicles in any capacity).
Similar to a commercial vehicle policy, commercial property insurance protects your company’s property from damage claims, injury claims, etc. The specific coverage options depend on the company and specific policy. The actual property that your business owns, as well as all of its owned property contained within that property, are all covered under this type of policy. As always, though, there are always policy limits that must be reviewed in order to understand just how much coverage you actually have.
How to Choose the Best Insurance for Your Business
In the past, choosing a business insurance provider involved calling up individual providers, taking home lots and lots of paperwork, comparing all of the options, and then making a final decision. This process could take weeks, or even months, and was almost never easy. Fast forward to 2024, though, and now you can review different service options, find a policy, and have it activated all within 30 minutes (if you really wanted to).
Of course, the internet has made things a lot easier (and we’re not just talking about insurance, here), but all of these options have also made it a bit more difficult to know exactly which provider to go with. Luckily, there are many great resources out there regarding insurance, business policies, and quotes. We recommend using the power of the internet to learn more about quotes, policies, pricing, etc.
Remember, the price of a policy depends on numerous factors. Your company’s size, age, history, revenue, and other factors will all be factored into an insurance policy’s final quote. The important thing to keep in mind is that you need to get more than one quote from more than a few different companies.
Comparing different quotes, their associated limitations, coverages, and payment options is something that is essential to finding the best deal for your business. You also need to consider whether or not your business will require other types of insurance. Many times, insurance companies will be able to bundle different policies together into one comprehensive policy. The reasoning behind this is that you will get a much better price, and you will also be able to more easily manage the policy (because they will all be under the same umbrella – which is what these types of policies are called i.e. “umbrella policies”).
Business insurance can be a difficult topic to navigate, especially if you’re unfamiliar with insurance in general, or are a brand new business owner/operator. While it can be difficult, it is essential to the safety and security of your business’s operations. Always err on the side of caution, and have more coverage than you might think you would need.
