A Quick Guide to Commercial Insurance

a quick guide to commercial insurance
If you don't have commercial insurance, you're leaving yourself exposed to a potentially significant threat and financial loss. Learn about different types

If you own a business, large or small, you’ll need to have Business Insurance in place before opening your doors. If you don’t, you could be leaving yourself exposed to a potentially significant threat, a substantial financial loss, and without the right business coverage in place, your personal assets could be at risk too. 

What exactly is business insurance?

Business insurance or commercial insurance is a collective term used to describe a range of coverages that can protect you, your business, your employees, your clients, and your assets. 

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While the quickest and easiest way to buy commercial insurance is to purchase a business owner’s policy, this might not always be suited to your operations, and it might not give you enough coverage for the individual risks your business faces. 

There are basic coverages (property, liability, commercial auto, workers compensation, surety bonds if you’re a contractor, and even crime), and those that are considered “optional,” depending on your specific needs (equipment breakdown, business interruption, cyber insurance, employee benefits, etc.).

Much will depend on your circumstances, such as your location; whether you/your business owns, leases or rents your space or vehicles; how long you’ve been in business; your annual revenue; and, of course, whether you have employees, and if so, how many.

Take the Time to Understand Your Individual Needs

Group of people sitting around a table in arkansas discussing business insurance

Every business has different needs—small versus large, sole proprietor or partnership, one employee or many. There is no one-size-fits-all method of buying a commercial insurance policy for your business. Instead, it would be best if you had more of a prescriptive approach. 

The amount of commercial insurance you need to buy could be dictated to you by a landlord, a client, or a contract. You might need to look at industry-specific coverage depending on your professionalism.

If you hire a team or operate a fleet of vehicles, you’ll need to make sure you choose the best employee insurance and auto insurance options. 

A little time and planning can mean the difference between worry-free business operations, and a significant loss that could result in a lawsuit that forces you to close your company, or worse still, it eats into your assets.

While there’s no way to detail every coverage, policy, and situation in one article, we’ll give you a quick overview of each in this post.

Are you buying commercial insurance in Arkansas? Talk with a member of the team at M&P Insurance today. We’ll help you make sense of your options while getting you the best deal on insurance for your business.  

quick guide to commercial insurance

How much business insurance do you need to buy?

business in arkansas with no fire insurance after fire damage

If you’re wondering if you have to buy commercial insurance, or whether it’s “worth it,” understand that it is to protect you, your business, your finances, your livelihood, and all of your personal, non-business-related assets as well.

It protects you in case of legal proceedings/lawsuits, property and personal damage, theft and vandalism, employee injuries/illnesses, and loss of income due to damage or business interruption (storms, cyber issues, etc.). 

With most business insurance policies, there is a range of coverage levels and limitations. As we’ve already mentioned, your landlord or client might require you have a specific dollar amount of liability coverage. 

It’s also important to add that buying high levels of liability coverage for your business isn’t always the most practical way to spend your money.

Depending on the type of work you do, the clients you serve, and the value of your assets, you might need to spread your coverage out to make sure all of your exposures are adequately covered. 

It’s always good to speak with a local commercial insurance agent to get tailored guidance for your risk profile and needs. Getting Arkansas business insurance online should only be done once you’ve had a conversation with a commercial insurance expert. 

The Different Types of Business Insurance

different types of business insurance in arkansas

Most of the coverages will come under the general label of commercial liability, commercial property, commercial auto, and workers’ compensation.

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The basic needs of any business, and the minimum you’ll want to ensure you have in place, will be liability and property coverages; if you have employees, then in the majority of states, workers’ compensation is an absolute necessity.

Commercial Liability Insurance 

Liability policies will cover you and your business for bodily and property damage, errors and omissions, and advertising/marketing issues. (For example, you’re advertising the sale of a car for $5,000, but your advertising copy has a typo stating the vehicle is for sale at $5,00. This protects you for losses occurring from this very costly typographical error.). Having this coverage will protect you from personal financial responsibility (out-of-pocket payments) for legal costs such as attorney fees and settlement payments. These liability policies are commonly labeled general and professional liability, commercial umbrella, excess protection, employment practice liability, product liability, and Directors’ and Officers’ insurance.

Employee Insurance 

Employee insurance includes workers’ compensation insurance. If you have employees, nearly all states require you to carry this coverage. It protects you from the consequences of an employee injury. It protects your employees in the event of a work-related injury or illness, and the employee’s family in the event of loss of life. There is no specific policy cost for this, as it will depend on factors such as risk, previous claim history, and the number of employees. Other forms of employee insurance can include health insurance.  

Commercial Property Insurance 

flooded business in arkansas with no flood insurance 1

Property insurance policies help you and your business recover from situations such as fire, natural disasters, storms, theft, and personal damage such as vandalism.

This will help cover things such as damage to your business’s physical location (your premises), tools, assets, documents, lost income during repairs, and the like.

It’s crucial to note that most property insurance policies will not automatically cover floods. This will most likely need a separate commercial flood insurance policy.

Make sure to check with your insurance agent if this is something you will need, especially if you are in an area prone to flooding of any kind.

Many insurance companies have special risk management teams, trained to help you identify what risks may be inherent in your business field and physical natural area of your city and state.

  • Commercial Auto Insurance
  • General Liability Insurance
  • Commercial Property Insurance
  • Business Owners Policy
  • Professional Liability Coverage
  • Product Liability Insurance
  • Workers Compensation Coverage
  • Data Breach Insurance
  • Employment Practices Liability
  • Commercial Umbrella Insurance
  • Unemployment Insurance
  • Directors and Officers Coverage
  • Excess Liability Insurance
  • Business Life Insurance 
  • Employer Health Insurance 
  • Non-Owned and Hired Insurance
  • Equipment Breakdown Insurance

Saving Money on your Commercial Insurance 

While it won’t always cover everything, a Business Owner’s Policy (BOP) will typically combine general liability, commercial property, and business interruption insurance into a single commercial insurance package.

Most businesses, small or large, find it easier to keep all of their business (and personal) insurance with the same carrier and agent. It’s everything under one umbrella, easily managed and maintained, especially as your business grows and your needs change.

It’s also a great way to save money on your commercial insurance as a package is often cheaper than buying each policy individually. 

arkansas trucking accident with no insurance coverage

If your business uses vehicles, you’ll want to look into commercial auto insurance.

A single vehicle, if used for work-related reasons, should be insured under a business auto insurance policy.

Aside from this, you may also get an extra discount on your coverage for buying multiple insurance policies from the same insurer. 

Here’s a quick-fire overview of the different coverage types, summing up what the various policies cover:

Professional liability—covers costs for claims such as the advertising error described above that could potentially cost thousands (or, in the case of airlines, it has been seen to cost millions), incorrect advice, issues along these professional lines.

Business income—replaces lost income in the event of closure for repairs, etc., in case of property damage or theft.

Business property—protects your physical and business personal property, including furniture and fixtures, tools, equipment, inventory.

Workers’ compensation is to help your employees be involved in a work-related accident or injury, or in the worst-case, lose their life, wherein the benefits will go to their family. This also helps cover any legal fees related to lawsuits an employee or family may file against your business or you personally.

Commercial auto—covers costs resulting from a work-related auto accident.

Data breach/cyber-crime— These days, cyber-crime and data breaches have the potential to become a huge issue, resulting in financial losses and data loss, not to mention the impact of any compromise on your reputation. Other problems may involve the time and costs in tracing the breach and establishing how it happened. There will be communications and reputational public relations to be factored into the equation too. The cost of mitigating a data breach or cyber-crime can be astronomical. If you have computers in your business, and you either collect or store personally identifiable information, this coverage is a modern-day necessity.

Business Insurance for Remote Workers—Are you working out of your home with a home-based business? If yes, then you’ll probably need to buy commercial coverage. There are risks associated with both property and liability, namely supplies, equipment, and business property; if you have customers coming to you, this coverage is essential in case of something as simple (or significant!) as a slip-and-fall on an icy sidewalk, a trip on the stairs perhaps. The other element of this is that a home insurance policy might not give you enough coverage for the full value of your equipment. 

As you can see, there are so many insurance coverage considerations to work through. At M&P Insurance, we’re here to help you navigate your commercial insurance options, and are committed to helping you build your foundation, and make sure every brick is securely in place. 

Please stop by to have a talk with us at our offices in Newport or give us a call at (870) 523-6771 so you can open your doors and operate with confidence and complete peace of mind.