What is Commercial Insurance?

Commercial business insurance is coverage for businesses and corporations, generally designed to cover the business, its employees and ownership. Since there are so many types of businesses with different needs and situations, commercial insurance can come in many shapes, sizes and colors.

Commercial Insurance Overview

At a basic level, commercial insurance is aimed at helping businesses stay protected against risks that may threaten its success. Depending on the commercial lines coverage, it can be specifically aimed at protecting the reputation, wellbeing and financial situation of a business entity, as well as the employees working for the business.
 
Unlike personal insurance, commercial insurance can cover multiple stakeholders and employees. Commercial insurance also differs from personal insurance because it tends to have much higher limits of coverage, since there’s typically more physical property at stake.
 
Moreover, commercial insurance carriers and agents are specifically trained in the risks and threats that businesses face. Plans are often structured to cater to a company’s specific industry and day-to-day activities. Personal insurance plans, like auto or renters insurance, tend to have a more one-size-fits-all purchase process.

Types of Commercial Insurance

There are many types of commercial insurance. A few of the most common include:
 
Commercial auto and equipment breakdown insurance can be especially helpful for businesses that rely on tools or automobiles to conduct daily business. Similarly, property insurance can help protect tools and tech property like computers, desks, and office environments.
 
Workers compensation insurance is another common form of commercial insurance, often required by law, especially for businesses in the construction, manufacturing, repairing or engineering industries. This type of insurance helps protect the company from lawsuits in the case of a work-related injury and accident experienced by an employee – plus can help cover medical costs for an employee injured on the job.
 
Cyber liability insurance is a growing form of commercial insurance that can cover businesses in the event of data breaches and other cyber security threats. Since many businesses hold a great deal of personal information on their servers, being hacked can have lasting financial repercussions.
 
Packages and Business Owners Policy (BOP) Insurance are a common solution for business owners because it may offer a cost savings to “bundle” several policies together. Packages and BOPs can differ from business to business or carrier to carrier but may include property, general liability, crime and inland marine.
 
Business interruption insurance is also a smart investment in terms of commercial insurance. This can help protect your business from financial losses in the chance that a covered accident or unexpected event prevents your company from operating.
 
Read our related article: What Types of Small Business Insurance May be Right for my Business?

Commercial Insurance Policies

There are many types of commercial insurance policies available, and an agent can help you understand which policies make sense for your business. A few things to understand about your policy:
 
  • Premiums are the amount a business pays for the coverage. Several factors can impact the cost of your premium including business type, number of employees, location, payroll, years in business and exposures.
  • Deductibles are the amount of money paid by the insured before the insurance will cover a claim. Having a high deductible insurance policy might mean that you pay less for the policy on a monthly basis, but more in the case of an accident.
  • Policy limits set a cap on how much the insurance carrier will pay out on a given claim or over the term of the policy. Even when your deductible is met, the policy will only pay up to a certain limit. Depending on what policy and coverage, limits can range from low to quite high, into the hundred-thousands or even millions of dollars.
  • Exclusions are things an insurance policy won’t cover. Knowing what exclusions are including in your policy will help you understand if the coverage is right for your business.
 
Learn more about AmTrust Financial’s small business insurance options, and connect with an agent.
 
This material is for informational purposes only, summarizes coverages and services that may be available in a policy, and is not legal or business advice.  Neither AmTrust Financial Services, Inc. nor any of its subsidiaries or affiliates represents or warrants that the information contained herein is appropriate or suitable for any specific business or legal purpose.  Readers seeking resolution of specific questions should consult their business and/or legal advisors.
Individual coverage may vary and may not be available in all states.  In the event of a conflict with the material herein, the terms and conditions of any issued policy will control.  Claim examples are general, may or may not be based on actual claims, and are for illustrative purposes only.  Any available coverage for a claim will be determined based on the facts and circumstances of the claim as well as the terms and conditions of the policy, including any applicable exclusions or deductibles.
 
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