Long before you ever have to file a commercial insurance claim, you will need to decide what type of insurance coverage you want and need for your type of business. Attorney Bill Voss would like to remind you that it is important not to rely only on the information from the insurance agent when taking out a policy. It is up to you to do your own homework and get a better understanding of the different types of commercial insurance available for your area. Not only is this important to ensure you have the right coverage, but it is beneficial for you to learn about common options for commercial insurance so that you have a well-rounded understanding of how coverage generally works in your industry.
Types of Property Insurance That Typically Cover Businesses and Commercial Properties
Insurance coverage for a business is often quite complex. Depending on the size of the business and how a property is used, there may be ways to expand your protection and many specialized types of coverage to consider. However, for most businesses in Texas, the following are the most common commercial property insurance options:
- Commercial property insurance. This a more general policy that provides coverage for damages to equipment, personal property, damage to structures and buildings, and more. This is the most basic commercial property insurance, and it is designed to protect a business owner from theft, natural disasters, and other accidents that result in damages. However, it is important to review what a basic policy won’t cover, which can be dependent on the cause of the damage and the area where the property is located. For example, windstorm exclusions apply in some communities along the Texas coast, and properties in some areas along the East Coast of the United States may be subject to higher hurricane deductibles. Don’t be caught by surprise—it may be necessary to purchase additional coverage or otherwise put a plan in place to mitigate losses for excluded perils.
- Business interruption insurance. Business interruption insurance is often included with general business insurance coverage. It helps covers the costs of temporary closure, lost revenue, relocation, rent and utility costs, and other reasonable costs when the flow of your business is interrupted by a fire, storm, or disaster.
- Flood insurance. In the U.S., flood insurance coverage is generally separate from general business insurance coverage. Instead, flood insurance policies are available through the National Flood Insurance Program (NFIP). Be aware that your flood insurance policy may not cover some types of water-related property losses, such as storm surge, sewer backup, and damage from water leaks. It is very important to understand what your commercial flood insurance policy will and will not cover, as well as if there is coverage for these types of losses in another policy you carry.
There are other types of commercial insurance, such as ordinance or law insurance, that can be purchased depending on the type of the business and its needs. Aside from property insurance, here are some examples of other types of policies that might be included in the “full picture” of your commercial insurance coverage:
- General liability insurance. This type of insurance is what covers those who get injured on your business’ premises, death that takes place at your office, or damage to someone’s property that occurs at work.
- Product liability insurance. This type of insurance provides protection against injury claims that resulted from defects in manufacturing, distribution, and sale of products.
- Professional liability insurance. This type of insurance covers companies and professionals that provide services to clients when a client claims negligence and damages.
- Home-based business insurance. This type of insurance helps protect small business owners from risks.
For more help understanding your business insurance coverage and what to expect from it, download a copy of our free book, Commercial Insurance Claims: The Basics. Or, if you need immediate help with your questions about a commercial insurance claim, you can start a live chat now or call the Voss Law Firm directly to speak with an experienced attorney.