What is Business Insurance?
What does it do?
How Does It Work?
Nevertheless, the insurance company does not pay right away, they first conduct an investigation to check the extent of the damage so they can process the claim. This is what allows them to know how much they should pay as compensation for the loss.
Business Insurance Cost
Is it Tax Deductible?
Is It Required by Law?
Business policies are required by the law in certain situations. These situations include:
- Workers Compensation Insurance
If you have employees, the law demands that you have a workers compensation insurance policy. This policy can either be from the state’s workers compensation program or self-insured.
- Unemployment Insurance
There are specific conditions where a business that has people under its payroll is required to pay unemployment insurance taxes. Check whether those conditions apply to your business then register it at the workforce agency.
- Professional Liability Insurance
Certain states require that some professionals have insurance against professional liability.
Do I Need Business Insurance?
Yes, any commercial operation needs to be covered. However, the type of coverage you need is dependent upon your situation. Nevertheless, the majority of small businesses need commercial property insurance, commercial general liability insurance, and business interruption insurance. When combined, these three policies form the most popular type of small business commercial insurance known as the business owner’s policy (BOP).Let us look at them in a bit more detail:
- Commercial Property Insurance
This policy provides coverage for all assets owned by the business such as buildings, equipment, vehicles, and inventory. The type of perils covered by this policy includes theft, fire, vandalism, and specified natural disasters.
- Commercial General Liability
This policy protects the business against third-party claims for bodily injury, medical payments, property damage, and defamation. This is the most common policy among small businesses.
- Business Interruption Insurance
This policy is applicable to businesses that need a physical location for their operations. It compensates the business for loss of income that follows an event that hinders the business from carrying out its normal operations. This includes situations such as power outages.
Does it Cover Embezzlement?
Does a Business Policy Cover Flood or Water Damage?
For your business policy to offer you coverage against flood damage, you will need a separate coverage that insures against flood. A standard commercial property insurance policy provides you with coverage against specific water damage situations with the exception of flooding. Moreover, water damage coverages vary between insurance carriers, as such, you need to compare different companies to get the one that suits your needs best.
Does a Business Policy Cover Lawsuits?
However, the carrier will always carry out investigations to ensure that the injury you are being sued against was not a result of your negligence or the suing party’s intentional act.
Is Business Liability Insurance the Same as Workers Compensation Insurance?
Protects third parties that come into come into contact with the business such as customers and vendors. If they get injured in the business’s premise, it will pay for their medical costs.
Protects the business against lawsuits from third parties.
Workers compensation does the following:
Protects you and your employees. Thus, will pay for any medical costs, lost wages, and death benefits if any member of the organization gets injured while on the job.
Handles lawsuits made against the business by its employees due to injury, illness, or death.
Business liability insurance deals with third parties that come into contact with the business and its employees while workers compensation protects you and your employees against injuries that may occur while on the job.
What is a Certificate of Insurance?
Errors and Omissions Insurance
I drive for Uber/Lyft, do I need a Business Policy?
While Uber and Lyft require that their drivers have personal car insurance that exceeds state minimums, they do not require that their drivers have commercial insurance.
The personal car insurance policy covers the driver but not their passengers. This is because auto insurance companies refuse to let the driver’s coverage to extend to their passengers if they were driving for hire.
To circumvent this obstacle, Uber and Lyft have designed special insurance policies which provide coverage for the passengers or pedestrians if the driver is at fault. This coverage is only effective if the driver is logged into the app. If they are not, then their car insurance policy will have to pay for the damages.
Moreover, if they are logged in, any accident that is the driver’s fault will only pay for the passengers and pedestrians involved but does not cover the Uber or Lyft driver.