Insurance is a necessary evil for many business owners. It's something that you hope you never have to use, but is so important to have in case of an emergency. While there are many different types of insurance, commercial insurance is by far the most important for businesses. This guide will help you understand what commercial insurance is and why you need it.
Let’s start with the basics - what is commercial insurance? Well, this is the general term for all the different types of insurance policies out there related to protecting your business. This is why it is sometimes referred to as business insurance instead of commercial.
Under this umbrella term, you’ll find policies like public liability insurance, employers’ liability insurance, and commercial property insurance, though we’ll look at these in more detail later in the guide.
Essentially, commercial insurance policies are designed to protect you and your business against any claims that incur due to losses, injury, or damages. These could be from a customer, employee, or general public member. Alternatively, you could be putting a claim in yourself for scenarios like theft or damage.
Commercial insurance can be purchased as separate packages, or you could get multiple types of business cover under one policy. It just depends on what you’re looking for. You can also get packages tailored to your specific business needs based on the industry you’re in and the risks you face.
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Insurance can be a lifesaver when facing a claim against your business or when having to make a claim yourself. Unfortunately, life is unpredictable, and the right policy can help your business back up and running quickly and recover from financial loss should something go wrong.
For this reason, every business needs commercial insurance in some form, but the type of policy you need will depend on your business and the unique risks you face. To determine the type of insurance you need, you must think about important aspects like:
• Whether you deal with members of the public
• If you’re a sole trader
• If you have business properties and vehicles
• If you have lots of stock or tools and where you keep these
• What products or services do you offer
• The types of interruptions your business could face, for example, poor weather conditions
Taking essential considerations into account will help you decide on the type of cover you need for your business.
To give the previous section a little more context, we’ll now explain the different commercial insurance policies out there and how these could be affected by any of the above. Some of the most common types of business insurance include:
As the name suggests, public liability insurance has been designed to protect your business against claims made by customers, clients, or members of the general public.
These claims might be made against you if they are injured or have their property damaged due to your work. These policies will also often cover incidents on your work premises, but it’s important to check this.
This type of insurance is most often purchased by those in the hospitality, events, personal care, and retail industry. It is also popular with those in the trades, for example, builders, landscapers, roofers, electricians, and plumbers.
Public liability insurance does not cover employee claims; therefore, employers’ liability insurance might also be needed. If you employ just one person who is not a direct family member, you’ll need to get a policy to cover this.
This will protect you against claims from employees who have suffered injury or illness while working for you.
If you have any commercial property related to your business, you might want to consider a commercial property insurance policy. This can cover aspects like:
• Building Insurance
• Contents insurance
• Fixtures and fittings insurance
• Loss of rent insurance
However, every policy is different, so before settling on one, you must make sure it covers the type of property you have and any goods or equipment you might keep inside it. Be sure to get a comprehensive policy so there are no nasty surprises should you need to make a claim.
You may need professional indemnity insurance if you offer a service based on your skills, knowledge, and advice. For example, if you are a solicitor or an accountant.
Professional indemnity insurance can help to cover legal fees if a client should claim you. They might do this if they have lost money due to your services. These policies might also cover you if a client experiences financial loss or harm as a result of your negligence or mistakes.
If your work requires a lot of tools or equipment, you want to ensure these are protected as well. Trades like carpenters, electricians, or photographers might need to consider protecting work tools and equipment from damage, loss, or theft.
Often, this type of cover can be added onto or included in a public liability insurance policy, but it’s important to always check before assuming you are covered.
Finally, a few other types of commercial insurance policies might be relevant to your business. One such approach that is growing in popularity is cyber and data insurance. You might also need equipment breakdown, medical malpractice, or office insurance, depending on the nature of your work.
And although not strictly part of commercial insurance, life insurance, and personal accident cover can be helpful if illness or injury will render you unable to work and, therefore, unable to make a living.
So there you have it—the basics of commercial insurance. Now that you understand what each type of coverage entails, it's time to start shopping around for the best deal. Keep in mind that rates will vary depending on your business size, location, and risk profile. But don't worry, we're here to help. Simpl fulfillment is a full-service order fulfillment provider with years of experience helping businesses just like yours get the products they need to grow and succeed. Contact us today to learn more about our services or get a free quote. We'd be happy to help you get started on the road to commercial success!
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