Lines of Business Insurance Examples to Protect Your Business

Protecting your business from unforeseen events is crucial to its success. A line of business insurance can help you do just that.

Many businesses face unique risks, such as equipment breakdowns or cyber attacks. For example, a restaurant may need to insure against equipment failure, while a software company may need to protect against data breaches.

Liability insurance is a common type of line of business insurance that can help protect your business from lawsuits. For instance, a contractor may need liability insurance to cover damages to a client's property.

Business interruption insurance can also help your business recover from unexpected events, such as natural disasters or supplier disruptions. This type of insurance can provide a financial safety net until your business can get back on its feet.

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Businesses need property/casualty insurance coverage to protect against damage to or loss of their property and legal liability for damages caused to others.

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Property/casualty insurance lines include a wide variety of businesses, such as those that fall under Standard Lines/Commercial Insurance.

A business owner's policy, or BOP, is a package policy that includes property insurance for buildings and contents, and liability protection to cover a company's legal responsibility for harm it may cause to others.

BOPs do not cover professional liability, auto insurance, workers compensation, or health and disability insurance, and businesses need separate policies for these.

Home-based businesses are vulnerable to financial losses without proper business insurance coverage, and some insurance companies offer special package policies for home entrepreneurs.

Commercial multiple peril policies bundle property, boiler and machinery, crime, and general liability coverage together, often purchased by corporations.

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Property insurance is a must-have for businesses that own or lease a building. This type of coverage protects physical assets from various perils like theft, fire, and storms.

Commercial property insurance is a core coverage in a business owner's policy (BOP) and safeguards everything inside the building and some outside assets. This includes inventory, computers, fencing, landscaping, exterior signs, furniture, important documents, and equipment.

Commercial property insurance isn't required by law, but many rental or lease agreements may require you to carry this coverage. The average cost per month is around $67.

Repairing and replacing property can get expensive quickly, leaving you in a tough spot. This is why it's essential to have the right insurance in place to protect your business.

Some common perils that may be covered by inland marine insurance include hail, fire, theft, wind, and water damage. This type of coverage is important for business owners responsible for moving or transporting company property.

Here are some examples of what commercial property insurance typically covers:

Professional liability insurance can safeguard professionals from significant losses due to claims such as negligence, misrepresentation, or malpractice.

Most professional liability insurance policies are claims-made, meaning coverage is only available for events that occur or claims made while the policy is active.

Businesses can be protected from claims that their product caused property damage or bodily injury with product liability insurance.

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This type of insurance can cover the injured customer's medical costs, judgments, or settlements against the business, and legal costs and fees to defend the business.

Employer liability insurance helps cover a business owner's expenses for a lawsuit resulting from an employee's work-related illness or injury.

Employment practices liability insurance (EPLI) protects businesses against claims from employees that their legal rights were violated in the workplace.

EPLI policies would cover the expense of a lawsuit resulting from claims of sexual harassment, discrimination, wrongful termination, breach of employment contract, and wrongful discipline, among others.

The cost of an EPLI policy is based on the type of business, number of employees, and risk factors like past employment lawsuits.

An EPLI policy is not legally required, but it may be smart to consider if you have employees.

The average cost of an EPLI policy per month is $222.

Protecting your company from potential liability lawsuits is a crucial step for any business owner, as it can be a massive drain on financial resources, and may require payment of settlement money or damages.

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Business interruption is a type of insurance that helps businesses stay afloat during temporary closures due to covered losses.

This coverage can replace income, allowing businesses to make essential payments like mortgages, rent, and loan payments.

Businesses can even use it to cover payroll, taxes, and other expenses that continue to pile up even when the doors are closed.

With business interruption insurance, businesses can focus on recovery and rebuilding instead of worrying about immediate financial obligations.

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Businesses need to protect themselves against unexpected losses, and auto and crime insurance are two essential types of coverage. Every state except New Hampshire requires commercial auto insurance, which should provide collision and comprehensive coverage for business-owned vehicles.

The average cost of commercial auto insurance per month is $147, a small price to pay for the peace of mind that comes with knowing your business is protected. A business auto policy should cover cars, vans, trucks, trailers, and other vehicles used for business purposes.

Crime insurance, on the other hand, covers losses from theft and embezzlement, which are often excluded from standard commercial property insurance policies. This type of insurance can be included in a package policy or purchased separately to protect against losses due to inside or outside thieves.

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Loss Sensitive Plans are a type of insurance approach that gives businesses an incentive to reduce claims via loss control efforts.

These plans, also known as retrospective policies, establish set minimum and maximum premium levels based on the losses sustained during a set period.

Businesses that are successful in controlling accidents and associated expenses will have their final premium near the minimum level, while those that experience major losses will have their final premium closer to the maximum level.

Loss sensitive plans are used for general liability coverage, and they allow businesses to share the burden of their loss expenses with the insurer.

Large deductible plans can be a cost-effective option for employers who are willing to take on more of the risk. They often have deductibles of $100,000 or higher.

These plans were first introduced in 1989 as a way to make costs more predictable for workers compensation insurance. By giving employers a strong financial incentive to control losses, they can help reduce overall insurance costs.

Employers who use large deductible plans must be prepared to pay a significant portion of their claims out of pocket. This can be a challenging but ultimately rewarding experience for companies that are able to manage their risk effectively.

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Data breach can be a nightmare for businesses. If a business computer gets a virus that exposes sensitive information, it's a major problem.

Data breach insurance can provide a safety net for businesses. This type of coverage can be useful in situations where a business is sued for losing personal health information or incurs high public relations expenses following a data breach.

In these cases, data breach insurance can help protect a business from financial losses. It's a smart move for businesses that use technology to protect themselves from cyber risks.

Here are some scenarios where data breach insurance can be particularly helpful:

If you own a business that relies on vehicles to get the job done, you'll want to consider commercial auto insurance. Commercial auto insurance covers physical damage and liabilities for situations not covered by personal auto insurance.

Typical coverage options include bodily injury liability coverage, property damage liability coverage, medical payments, collision coverage, uninsured motorist coverage, and comprehensive physical damage coverage.

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Some states require you to carry commercial auto insurance, with New Hampshire being the only exception. The average cost per month is around $147.

A commercial auto policy should provide collision and comprehensive coverage for cars, vans, trucks, trailers, and other vehicles the business owns. This is especially important if you're using a vehicle for business purposes, as a personal policy might exclude claims occurring during a business activity.

Businesses are vulnerable to losses from crime, and typical commercial property insurance policies often exclude losses of money and securities due to any peril.

Most businesses need to purchase separate policies or add coverage to their package policy to protect against theft losses, including inventory, equipment, and other types of property.

Crime insurance can cover losses from outside thieves, such as burglars, as well as inside thieves, like embezzlers.

The business owner needs to work with their agent or broker to determine the best coverage and amount of coverage needed for their particular business.

Businesses should review their insurance policies to ensure they have adequate coverage for crime losses, as these losses can be significant and devastating.

Disability insurance provides a safety net for employees who can't work due to illness or injury. It allows them to access a percentage of their income to cover personal expenses.

In the US, five states require businesses to offer a short-term disability plan. These states are California, Hawaii, New Jersey, New York, and Rhode Island.

The cost of disability insurance varies, but it's typically between 1% and 3% of each employee's salary. This means if you have an employee making $50,000 per year, you can expect to pay around $500 to $1,500 per year for their disability insurance.

As a business owner, you can deduct any pre-tax, company-paid premiums from your taxes. This can help reduce your tax liability and make disability insurance more affordable for your business.

If you're unsure about disability insurance requirements in your state, it's best to check with your local government or a qualified insurance professional. They can provide you with the most up-to-date information and help you make an informed decision about your business's insurance needs.

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