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What Is Business Insurance?

By Compuquotes Team on March 27th, 2008

Business Insurance

The concept of business insurance is quite broad in definition as there are varying types and levels of business insurance. However, the concept is the same for all types of insurance. Your premiums, the rate you pay, goes into a pool with your insurance company. Losses that clients of that insurance company make claims for are paid from the pool of funds. Essentially, the premiums of many pay for the losses of the few.

Business insurance, more specifically is coverage that reduces or compensates for exposure to risks for the business and the employees of that business. It also includes unemployment insurance, workers compensation social security in some states as well as state disability. There are essentially nine types of business insurance policies that have different coverage for each section. Let's look at business insurance policy types:

Property insurance for businesses is the protection of loss or damage to the location of the business and its contents. This can also insure the property that is owned by your customers if it is involved in the loss. Business property insurance can be allocated for specific risks as well, such as fire, but other perils (events) that cause a loss would not be covered.

Casualty insurance is often put together with property insurance as a term �property and casualty insurance� for businesses and these are usually the best deal for you. Casualty insurance insures against damage or losses to the business.

Liability business insurance protects your company against legally imposed liability charges due to negligence on behalf of the business or its employees.

Commercial auto insurance insures the vehicles that are used for your business. This type of business insurance insures for damage to others caused by your vehicle or for property damage to other vehicles.

Workers compensation insurance as well as state specific insurance for employee injuries is protection against on-the-job injuries for your employees. Each state has different laws and regulations, however most have some form of workers compensation system. Some states require further insurance as well, other than just these two types of insurance.

Business interruption insurance protects you from losses or damages to your businesses profit margin and cash flow caused by an interruption that leaves you unable to operate your business. Even though the original peril may be covered by other insurance, the inability to continue your business will result in the loss of income, which your other forms of business insurance will not cover.

Health insurance covers your worker's health needs with a benefit plan.

Life and disability insurance protects your business from the disability or death of key employees, such as a partner who names the partnership as the beneficiary.

There are other business insurance programs and scripted policies for unique businesses that need a mixture of insurance or something different from every type of business insurance all together. We've all heard of actresses who've had body parts insured - these are scripted policies.

No matter what type of business you have, you need to have business insurance to protect you and your business from losses that can ultimately affect your livelihood and that of your employees.

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