Commercial insurance and business insurance are prominent terms in the business sector, yet the most confusing terminologies to various business owners globally. Is there a distinction between the two? And what does each implicate?
In general, every business needs a way of protecting itself in any case of accidents. Most start-ups would assume only big companies should get insurance coverage. That is relatively true for few well-established companies that also presume the same.
Despite these differences, all forms of insurance coverage are meant to safeguard and defend businesses, especially in lawsuit situations. For damages whereby you’ll have otherwise paid out of your pockets, the insurance coverage takes charge, saving your company a financial disaster. That means any business, regardless of size or nature, equally benefits from the two insurance coverage whenever the need arises.
But first thing first, you must understand what each insurance coverage entails and whether you need business insurance or a commercial insurance policy. You can further avoid future confusion by consulting insurance firms like San Angelo Insurance Serving Businesses to clarify various insurance policies.
Business Insurance Vs. Commercial Insurance
Although many business owners have difficulty choosing between business insurance and commercial insurance, you should note that the two imply the same. In essence, they can be used interchangeably. Both terms indicate insurance coverage to a company, irrespective of size or nature.
Common Reasons Why Your Business Needs Commercial Insurance
1. It’s Mandatory by Various State
Commercial insurance is required by law in many jurisdictions. While others might not stress the need, it’s crucial as a start-up not to overlook its significance. For example, a fire case might emerge, or a client could sue your company regarding an accident within your business premises or lost items. These factors can harm your financial status without insurance cover.
2. Commercial Insurance Protects Workers and Customers
Workers are protected by workers’ compensation (or workers comp). The insurance covers employees in work-related injuries by paying hospital bills and compensating lost wages. Others are medical care and funeral benefits.
Likewise, customers are covered under business owners’ policy(BOP). The coverage incorporates business property and liability, protecting against property damage, personal injuries, and product liability, among others.
3. Commercial Insurance Builds Credibility
As a business, customers and construction workers will have ample time in their business transactions, guaranteeing their safety. Commercial insurance also showcases you as a serious business that strictly observes risk management.
4. Commercial Insurance Protects Against Natural Disaster
As far as natural disasters are unpredictable, they are inevitable in certain locations. Natural occurrences like lightning and flooding could significantly damage property, sometimes into devastating measures. You’re fortunate to have commercial coverage in such emergencies, which covers business assets after the calamity.
5. Various Contracts Requires Commercial Insurance
Whether you’re planning to borrow money from a financial lender, making agreements in multiple loans, or renting a property from the owner, you’re going to need insurance cover before undertaking such transactions. Given that most of your business transactions will be based on multiple contracts, it is vital to acquire commercial insurance.
Basic Types of Commercial Insurance in Business
Business insurance varies considerably by the degree of importance to businesses. While some are optional, others are basic to organizations. Here are the three most crucial business insurance for businesses.
General Liability Insurance
Every business owner must have general liability coverage. Also called general commercial liability, it’s a basic coverage to any business. In essence, it covers costs on property damage, administrative expenses on tackling covered claims, and court expenses on handling and settling covered claims.
Commercial property insurance
Unlike other forms of insurance, commercial property insurance covers any loss or damage to property, excluding natural causes like floods and earthquakes, unless included in the coverage. Common causes can be damaged by fire, storm, explosion, vandalism, or theft, and many more.
The worker’s compensation insurance helps cover work-related injuries for employees by paying hospital expenses and restoring lost wages. Employers with at least one employee need workers’ compensation insurance. The insurance provider must provide employee coverage in any case of work-related injuries or illness, regardless of cause, condition, or circumstance.
Whether you’re a small or big business owner, entrepreneur, or executive, it’s crucial to note the various types of insurance coverages your business will require for its protection in the long run. That’s especially when contradictory terms like commercial insurance and business insurance are used altogether. It is recommended to get insurance services from professional and licensed companies to avoid getting on the wrong side of the law.