Business insurance is also known as commercial insurance 

In the simplest of terms, insurance is the concept of pooling the funds of the many to pay the claims of the few. Premiums are paid by a policyholder in exchange for a policy to protect the risks and exposures a business faces so that it can continue to operate in the event of a claim.  A commercial policy can provide coverage for many business exposures – from an office or storefront to tools and equipment and much more. 

What makes up a commercial policy? 

A commercial policy can simply be one type of coverage or many. Coverages and premiums depend on numerous factors such as the industry that the business is in and its size, the value of goods or sales, location or premises, tools, equipment, machinery, stock, inventory, cyber risk, and so much more.  

Whether a small, medium or large business, the basic type of insurance to have is almost always a commercial general liability (CGL) policy. Why? Because it protects the business and any third party if the business directly causes harm and is sued.   

CGL covers: 

• Property damage and bodily injury – this coverage pays for legal costs if the business is found to be legally responsible for a third party’s bodily injury such as a slip and fall, or damage to their property. 

• Personal injury – this coverage pays for legal costs if the business is found to be legally responsible for harm to reputation such as slander or libel. 

• Tenants’ Legal Liability – this coverage applies to premises rented by the business and pays the landlord for damage to the unit caused by a covered event. This coverage is required by landlords if you rent space for your business. 

• Medical payments – this coverage helps pay for a third party’s medical bills if they were injured due to your business operations. 

What other coverages are available? 

Many providers bundle a number of coverages into a ‘commercial policy package’ to offer coverage that most types of businesses need in their day-to-day operations.  

In addition to CGL and depending on the operations, these can include: 

• Commercial property – a broad coverage that protects the business’s physical assets such as:
  • Real property – covers the building and other structures within the property or premises.
  • Equipment such as boiler and machinery, computers, office furniture and more. 

• Business interruption – covers the income a business expects if operations are forced to shut down due to a covered claim. 

• Professional liability – also known as Errors & Omissions, this generally applies to businesses that provide advice or service such as architects, engineers, consultants and more. This covers legal costs if the business is sued for negligence or harm in relation to service or advice given.
• Product liability – covers legal costs if the business is sued for negligence or harm in relation to the product provided. 

• Cyber liability – covers the costs of restoring data, legal action, investigation and remediation in the event of a cyberattack or data breach.  

For small to medium sized businesses, a commercial policy package tailored to the business is often enough. And then there are some businesses, usually larger in scale, that require additional and specialized coverage to address specific operational needs such as multiple locations, fleet of vehicles, technology and more. This requires an in-depth analysis to determine the right coverage.