From sole proprietorships to major corporations, all businesses face operational risks that can cause significant personal and financial loss. With so many different types of insurance to choose from, it can be overwhelming to know what coverage is best for your business. But it’s important to know that insurance can protect your business from costly claims and enable you to recover financially from any operational setbacks.

What Is Business Insurance? 

Business insurance isn’t a single policy but a combination of coverages that businesses choose to protect their companies from numerous risks. Three key types of coverage many companies choose for insurance: commercial general liability, commercial property insurance and business income (interruption) insurance.

Commercial general liability insurance

A general liability insurance policy typically protects your business from claims that involve bodily injuries and property damage resulting from your products, services or operations. In addition, this coverage can help with medical expenses and attorney fees that result from bodily injury or property damage claims that your business faces. Advertisement injuries are caused by alleged misinformation, copyright infringement or slander made by your business, and are also covered under general liability insurance.

Typically, general liability insurance has three coverage components:

• Premises liability may cover you if a non-employee is injured on your property. For instance, if someone sues your business because they tripped and fell on your property, general liability insurance could help cover those expenses.
• Products liability covers you if your business’s product or service causes injury to someone or inflicts damage on a consumer’s personal property.
• Personal injury coverage helps provide a level of coverage against claims of third-party physical, financial or mental harm caused by your business.

Commercial property insurance

If your business experiences a catastrophic event such as a fire, explosion, burst pipe, storm or theft, commercial property insurance compensates you for losses or damage to your building, leased or owned equipment and other property. Commercial property insurance is offered at either a replacement cost or an actual cash value basis. Suppose your insurance policy is for the replacement cost. In that case, it can pay the cost to replace or repair the damaged property with materials of like kind and quality, without any depreciation deduction. On the other hand, actual cash value pays the cost to repair or replace the damaged property minus depreciation.

Business interruption insurance

If your business must temporarily close after a covered, damaging accident, this coverage can help pay your company’s bills. Business interruption insurance lets you access your company’s assets when you need them the most. One brief business interruption can be incredibly costly for your company and can lead to severe reputational damages or long-term closures, and that’s where business interruption insurance can help. This coverage protects against common interruptions, including natural disasters, equipment damage, and vandalism.

Other Insurances That Offer Protection

Your business type and size, location and level of risk can impact whether you may want to add additional insurance to protect your business and its assets. Lupton & Luce Inc. helps businesses in Riverhead and through Long Island with business insurance to recover from unexpected problems.

These other insurance coverages may be beneficial for protecting your business from unforeseen risks and liabilities. They include:

• Commercial auto insurance—This coverage can help protect against financial repercussions of physical damage and liability claims to help your business afford the costs of wrecks or other vehicle hazards. 
• Surety bonds—If you are contractually bound to specific clients, these bonds ensure that you will be able to repay them if you cannot meet your obligations. 
• Workers’ compensation insurance—This coverage can provide wage replacement to your employees during their recovery if they sustain a work-related injury or illness.

In addition to these coverages, specific insurance offers further protection for your business, depending on your products or services. These include:

• Cyber liability insurance
• Employment practices liability insurance
• Inland marine insurance
• Products/completed operations liability insurance
• Umbrella liability insurance

We can explore what insurance your business should have to give it the best protection. Your business type and location may require that you carry certain types of insurance. For instance, many states require any business with employees to carry workers’ compensation insurance, and some states have specific business insurance laws and, for example, may require professional liability insurance for accountants. 

Lupton & Luce Inc. can help you get the coverage you need to reduce your risk exposure and put you in compliance with your state’s regulations.