Commercial insurance is coverage for corporations and companies, usually designed to protect the business, its staff and ownership. Unlike personal insurance, commercial insurance will cover multiple employees and stakeholders. The insurance policy is created to respond to a specific threat that could affect the company or its assets. This is different from liability insurance, which only covers third parties who are injured on the property of the insured. In order to understand the differences between commercial insurance and personal insurance, it helps to have a basic understanding of what commercial insurance provides against.
As with most policies commercial insurance policies will cover risks that may occur as a result of a disaster, theft or any other unanticipated event. When it comes to small business owners the risks that commercial insurance will cover are quite common. These risks are divided into two categories, namely those that impact the individual business entity itself, and those that impact the commercial entity as a whole.
Many of the risks that commercial insurance policies will cover are not actually legal obligations, but are instead financial responsibilities that fall upon the business owners as a result of their conduct of business. The two main areas in which business owners must decide how to address these risks are the types of products or services they provide, and how they intend to market those products and services. In the case of providing products or services commercial insurance policies will usually require the business owner to establish some sort of commercial entity. This will be based upon the type of product or service being offered and will also reflect the type of entity that will be created to own and operate the commercial entity. Many of the policies will also provide guidelines for how to structure the partnership so that the business owners are not held liable for the actions of a third party.
On a much less frequent basis commercial insurance policies will cover events that result in direct injury to employees or other third parties. In the case of accidents such as slips and falls on the job many types of claims are able to be filed with commercial insurance companies. In many cases these claims will be based upon what was reported at the time the incident occurred and what has since then progressed. However, there can be many types of adjustments made to the accident report provided by the employer in order to make the claim more viable. These types of claims will often be the subject of negotiations between the employee and company in order to reach a settlement that is acceptable to both sides.
Another area of commercial liability is that of personal injury. While most people are aware that most states have a category of personal injury that extends to this area of commercial insurance coverage, very few people are aware of the fact that there are many types of personal injuries covered in commercial insurance policies. In addition, while it is true that most states do not have a separate category of commercial insurance policies specifically designed for the protection of business operators against lawsuits that arise out of negligence in the workplace, it is still possible to find a commercial insurance policy that has been tailored to meet the specific needs of the particular business being sued.
While claims for many types of accidents are handled quite differently in different parts of the country, there are some common exclusions and stipulations that most commercial insurance policies will share. For example, most commercial insurance policies will exclude liability coverage in the event that a client is injured while at the business. This is because liability insurance policies are typically intended to protect business owners from large financial losses that could result from an accident that was deemed to be the result of negligence on the part of the business operator. Most small business insurance policies will also include a provision barring employers from discriminating against employees for reasons of race, age, gender, religion or sexual orientation. Religious or sex discrimination is illegal in most states but this is not a universal exclusion for all employers.
Many commercial insurance policies will also include a provision barring employees who have a criminal record of any kind from holding down full-time positions at the company. Again, this is to protect employees who may be guilty of some crimes that could get them in legal trouble with the law. While these provisions are sometimes not thought about as often as other exclusion provisions, it’s always best to be as safe as possible and this helps commercial insurance companies to avoid making mistakes that can cost them a lot of money.
As you can see, there are a number of exclusions and stipulations that commercial insurance policies will cover and many of them relate to how they can be used to protect the company. It is always a good idea to read over the terms and conditions of a commercial insurance policy before signing on the dotted line. If there are things that you don’t understand or you don’t think apply, feel free to call the insurance company and ask questions until you are comfortable with your answers. Don’t assume that every commercial insurance policy will have everything you need, but the more research you do into commercial insurance, the more likely you are to find an insurance policy that has the coverage and protection that you need. Insurance is designed to help ensure that your company won’t be liable for injury or damage to others. You don’t want to end up spending thousands of dollars to have something bad happen and then have the company is responsible for all of the costs because they missed an important piece of information or overlooked a small detail.
