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Why Do I Need Business Insurance?

Updated 11:57 AM EST, Mon November 12, 2018

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Businesses need business insurance because it helps cover the costs of property damage and liability claims. Without business insurance, business owners might have to pay out-of-pocket for costly damages and legal claims against their company. In some states, businesses are required to have specific types of business insurance.

What Are the Basic Insurance Needs for Most Businesses?

Most small businesses will need a business owner’s policy (BOP). A BOP combines business property, business liability and business income insurance in one policy. Business property, sometimes called “commercial property,” helps protect the physical location of your business and business assets. This includes tools, documents and furniture.
Business liability, sometimes called “commercial liability,” helps cover the costs of liability claims made against your business. For example, if a customer trips and hurts himself in your store, he could bring a lawsuit against your company. Business liability insurance can help cover the costs of that claim.
Business income insurance helps replace lost income when your business can't operate due to a covered loss. This is a great way to help ensure you can keep paying your bills and payroll after a covered loss.
There are also several business insurance coverages that are required in some states. In most states, businesses with employees need:
  • Workers’ compensation insurance
  • Unemployment insurance
  • Disability insurance
Workers' compensation helps provide financial support to employees who are unable to work because of a job-related injury or illness. Unemployment insurance provides benefits to workers who are displaced from their jobs through no fault of their own.

Specific Business Insurance Needs

There is a wide variety of business insurance coverages available to business owners, so they can tailor their insurance protection to address the specific risks facing their business. When choosing coverages for your business, think about the important aspects of your operations that need protection. These could include, the type of work you do, your physical premises, property and equipment; intellectual property; employees and customers. And keep in mind, that as your business grows, your coverage needs may change.
Also consider that businesses in different industries need specific business insurance coverages to help meet their unique needs.

Insurance Needs for Landscaping and Arborists

Landscaping and arboristsshould look into buying Business Income Extension for Off-Premises Operations. This coverage can help replace income lost if your business can’t operate because equipment was damaged at the job site. Landscapers might also consider adding Herbicide/Pesticide Insurance coverage. This can help cover costs resulting from pollution caused by using pesticide or herbicide.

Insurance Needs for Real Estate Businesses

Real estate businesses will most likely need commercial auto insurance. This coverage can help cover the costs if an employee causes an accident while driving for work. Real estate agencies can also benefit from employment practices liability (EPL) and employee benefits liability (EBL) insurance.
If an employee makes a claim of wrong termination, discrimination, harassment or other employment related issue, EPL can help cover the costs related to that claim.
EBL helps cover the costs related to claims that your company committed errors or omissions in the administration of your employee benefits plan.

Insurance Needs for Retail Businesses

Retail businesses can benefit from adding Business Income from Dependent Properties and Franchise Upgrade coverage. Business Income from Dependent Properties helps cover lost business if a third party your business depends on causes your store to lose business. For example, you may lose business if a manufacturer of goods you sell unexpectedly shuts down and is unable to deliver the items you ordered. Depending on the reason for shutdown, this type of Business Income Dependent Properties coverage can help cover the income you lost as a result.
Franchise Upgrade coverage can help pay the costs to upgrade a retail store to meet franchise standards after a covered accident.

Insurance Needs for Restaurants

Restaurants and other food service businesses can help protect themselves by adding Liquor Liability and Temperature Change insurance. Restaurants that serve liquor are at an increased risk. If a patron who was served alcohol causes a fight or accident, the restaurant could be held liable. Liquor Liability helps cover the costs of a claim involving the sale of liquor at a restaurant. Temperature Change coverage helps protect restaurants if refrigerator units break down and cause spoilage. If this happens, Temperature Change coverage can help pay for the cost to replace the stock.
Business insurance helps protect the business you worked so hard to build, get a quote today.

Certain coverages vary by state and may not be available to all businesses. All Hartford coverages and services described on this page may be offered by one or more of the property and casualty insurance company subsidiaries of The Hartford Financial Services Group, Inc. In TX, this insurance is written by Sentinel Insurance Company, Ltd., Hartford Casualty Insurance Company, Hartford Lloyd’s Insurance Company, Property and Casualty Insurance Company of Hartford, Hartford Underwriters Insurance Company, Twin City Fire Insurance Company, Hartford Accident and Indemnity Company and Hartford Fire Insurance Company. In CA by Sentinel Insurance Company, Ltd. (CA license # 8701) and its property and casualty insurance company affiliates, One Hartford Plaza, Hartford, CT 06155.
The Hartford® is The Hartford Financial Services Group, Inc. and its property and casualty subsidiaries, including issuing company, Hartford Fire Insurance Company. Its headquarters is in Hartford, CT.