You may know that commercial insurance is necessary in many areas in the eastern United States. How does a policy actually protect your business and personal assets, though? The agents at Redden Insurance Agency can help you gain a full understanding of how commercial insurance works.
What is commercial insurance?
In simple terms, commercial insurance is a financial safety net for your business. All companies, regardless of whether they are at-home businesses or traditional brick-and-mortar corporations, come with some type of risk. Commercial insurance protects you from significant financial loss in the instance that an at-fault incident leads to a lawsuit.
There are several types of commercial insurance from which companies may choose. These include:
- General Liability Insurance
- Commercial Auto Insurance
- Business Interruption Insurance
- Builder’s Risk Insurance
- Errors and Omissions Insurance (E & O)
- Malpractice Insurance
Workers’ compensation insurance is also considered commercial insurance. This type of indemnity plan is required by law if you have one or more employees. Commercial auto insurance is also legally required if you have one or more vehicles that you or your employees use for business purposes.
How does commercial insurance work?
Commercial insurance operates much like your standard auto or home indemnity plan. You select the type of coverage you want along with the policy limits. Your provider will pay for eligible incidents up to your plan’s limit.
Some policyholders become confused about policy limits when purchasing commercial insurance. You may have a claim that costs more than $500,000 in losses. Your insurance plan, however, will only pay half of the bill if your policy’s limit is $250,000. Limits are further broken down by incident. You may only have $50,000 worth of coverage for medical bills, for example. Your policy will only pay $50,000 for medical claims regardless of how much coverage you have overall.
Call Redden Insurance Agency for help
Commercial insurance is necessary but sometimes confusing. We can help you find the policy that best fits your business. Call today to get started with a quote!