Business insurance is a type of insurance that protects businesses from potential financial losses resulting from events such as property damage, business interruption, or liability claims. In short, it helps businesses to protect themselves against risks that could potentially cripple their operations. But how does business insurance work? Let’s take a closer look.
Generally speaking, there are four types of business insurance:
General Liability Insurance (GLI) – This type of coverage helps protect a business from claims such as bodily injury or property damage that occurs at or around the business premises.
Commercial Auto Insurance – This coverage generally includes car insurance for vehicles used for business purposes or owned by your company.
Workers Compensation Insurance – This type of insurance helps pay medical expenses and lost wages when an employee is injured during work duties.
Business Owners Policy (BOP) – This type of insurance combines liability, property, and other coverage into one policy. It’s a customized bundle of business insurance policies designed to meet the business owner’s specific needs.
Two main components make business insurance work:
The Insurer – The insurer helps protect businesses from financial loss in the case of an accident or covered claim. Basically, they act as a "buffer" between you and third-party claims. When you purchase an insurance policy, you are entering into what’s called a contract of indemnity. Basically, that contract states that you (the insured) will abide by the policy rules. The insurer then promises to pay for covered expenses in the event of an accident or claim on your behalf.
The Policy – The policy is a legal contract that helps protect you from potentially devastating financial losses. The policy usually includes a section called "Exclusions," which outlines events or actions that are not covered by the policy. And depending on the type of business insurance, there may be additional sections to read through regarding specific limitations and exclusions for each kind of coverage.
Business insurance is a valuable asset to the success and growth of your business. Luckily, Fida Insurance Group is dedicated to helping businesses in Monroe, CT, find suitable insurance policies at competitive rates. Contact Fida Insurance Group today for more information on how you can protect your business.