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Understanding Business Insurance Coverage

Insurance is the contractual transfer of the financial consequences of loss to another party. When you buy Business Insurance, an insurance company is promising its duties, exclusions and conditions under which they will cover you in the event of a loss.

There are various types of Business Insurance. All serve a special purpose and your business may not require most of them. Understanding your exposure to risk will help you know which policies your business will benefit from.
Here are the types of Business Insurance coverage you can buy:

General Liability
Protects the business from loss due to bodily injury or property damage caused by its activities or products.

Business Owners Policy (BOP)
A type of policy contains coverage for various types of insurance all in one convenient package. It protects businesses from major property and liability risks.

Business/Commercial Auto
Covers the business from loss to one of its vehicles and from a liability loss in the event of an accident involving such vehicles.

Commercial Property
Covers the business for loss to its property (buildings, furniture, computers, etc.) by perils such as fire, burglary, wind, etc. and covers the business from financial loss due to the interruption of business in cases of such loss.

Contractors Bond
Serves as a form of insurance that protects the customer in the case that the contractor fails to adequately complete the job or fails to cover permits or pay subcontractors as agreed.

Surety Bond
A guarantee that protects another party. Think of it as buying insurance for someone else, making them the beneficiary and allowing them to file a claim should the terms of your contract agreement not be met.

Commercial Umbrella
An Excess Liability policy that provides additional coverage over the General Liability, Auto Liability and Employers Liability policies and may provide coverage over the limits set by the underlying policy and for other exposures.

Directors and Officers
This coverage protects the board of directors and other key officers of the company from loss caused by lawsuits.

EPL Insurance
EPL Insurance (Employment Practices Liability) Provides coverage to employers against claims made by employees alleging discrimination (examples: based on sex, race, age or disability), wrongful termination, harassment and other employment-related issues, such as failure to promote.

Workers Compensation
Required coverage covers the Workers Compensation requirements provided by state law and provides for payment of employee injuries.