What Does Business Insurance Cover?

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Business insurance encompasses coverages that protect businesses from different types of accidental losses. These are losses that a business can’t avoid, either because they occur without notice or because the business lacks the resources to adequately prepare itself.

Common risks that businesses must buy insurance cover for include liability claims by third parties and business interruption and property destruction caused by extreme weather conditions and accidents at your place of business

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Common Business Insurance Coverages

Small to medium scale businesses in particular need to insure their assets against accidental losses as many may not be able to get back to their feet after such a loss occurs. However, business insurance is offered in different types, the most common of which is commercial property insurance:

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Commercial property insurance

Commercial property insurance covers your business against financial losses caused by damage to physical property and equipment you own or lease.

Commercial property insurance does not provide coverage for every foreseeable risk. But is it flexible, allowing you to choose and exclude coverage for specific risks. You can, thus, choose to insure against perils that are common in your line of business and avoid buying coverages you don’t need.

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Business income insurance

Business income insurance protects your business from revenue losses resulting from forced closures. Forced closures may be caused by events or circumstances that make it unsafe to operate, so much so that governments have no choice but to force businesses to close.

Examples are threats to public safety - wildfires, floods, and blizzards - and health, like epidemics and pandemics. Business income insurance, sometimes known as business interruption insurance, will, thus, cover a business from income losses caused by forced closures.

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Commercial liability insurance

Commercial liability insurance is a form of third-party insurance that covers businesses against lawsuits filed by vendors, clients, and members of the general public. The lawsuits may be for losses suffered by third parties through the destruction of property that you caused while carrying out your work.

The lawsuits also include claims against your business for unsafe or defective products (product liability insurance), or poor quality work that fails to meet standards expected by a client.

Not sure what business insurance policy to buy?
Contact our business insurance experts here for a free consultation and learn what specific coverages your business needs.

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