Understanding Business Insurance

The success of any business depends on hard work and ingenuity. Business insurance ensures that all the effort and money you have invested in your business is covered in case a disaster strikes. In general, businesses need to purchase at least the following four types of insurance:

• Property insurance compensates you if the property you use in your business is lost or damaged by common perils such as fire or theft. Property insurance covers not just a building or structure but also what insurers call business personal property.
• Liability insurance protects you in the event that someone claims that your business caused him or her harm. Your liability insurance pays damages to third parties resulting from bodily injury or property damage for which your business is legally liable, up to the policy limits, as well as legal fees. It also covers the medical bills of any people injured by your business.
• Business vehicle insurance provides coverage for autos owned by a business. The insurance pays any costs to third parties resulting from bodily injury or property damage for which your business is legally liable, up to the policy limits. Depending on what kind of coverage you buy, the insurance may pay to repair or replace your vehicle because of damage resulting from accidents, theft, flooding and other events.
• Workers compensation insurance or workers comp, as this coverage is generally called, pays for medical care and replaces a portion of lost wages for an employee who is injured in the course of employment, regardless of who was at fault for the injury.

Other Types of Policies You May Need

In addition to the basic coverages highlighted above, there are various other policies needed by some businesses, including the following:

• Business catastrophe liability or umbrella policies provide coverage over and above your other liability coverages. It is designed to protect against unusually high losses. For the typical business, the umbrella policy would provide protection over and above general liability and auto liability policies.
• Specialized liability insurance policies are designed to meet specific needs of individual businesses specialized for liability policies needed by some businesses. They include Errors and Omissions Insurance (E&O)/Professional Liability Insurance, Employment Practices Liability Insurance (EPLI) and Directors and Officers Liability Insurance (D&O).
• Terrorism insurance is offered to owners of commercial property as mandated by the Terrorism Risk Insurance Act, enacted by Congress in 2002. Insurance losses attributed to terrorist acts under these commercial policies are insured by private insurers and reinsured by the federal government.

To learn about the details on the specifics of your business policy or to inquire about what type of coverage is right for you, contact an Erie Insurance Agent.

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