The United States has a very complex insurance landscape, as private insurance continued to dominate the working-age population for decades. Business owners working in the country must understand the importance of financial services and business coverages to stay competitive and compliant with the state’s law in which they are operating. Whether it is a small-scale business or a large enterprise, business insurance is essential not only to protect operations but also to comply with state regulations.
For entrepreneurs aspiring to open a startup business or established business owners seeking a holistic business coverage, there are insurance options that ventures of all scales must have for effective risk management and business compliance. Every business operating in the United States encounters several storms, which makes it essential for them to be ready to weather them effectively. Insurance shields any company from financial losses that could have resulted from multiple causes, including lawsuits, property damage, employee injuries, natural disasters, and other unexpected events.
Investing in business insurance is crucial for a business’s long-term health. It can offer your business financial security, given the uncertainties and dynamism of the ever-evolving business landscape. As the modern business environment continues to evolve, having the right coverage in place can help business owners and entrepreneurs prepare for any unprecedented situation.
This article will explore some common and mandatory insurance coverages that businesses in the USA should possess. From General Liability to Workers’ Compensation, each type has its own risks and advantages that business owners must bear in mind and act accordingly. This small guide also specifies some top insurance companies that offer these insurance coverages.
Key Insurance Coverages for Companies in the USA
Business insurance requirements and regulations vary by state in the US. For example, workers’ compensation insurance is mandatory in most states, but each state has its own specific laws regarding the same. Moreover, there are certain compulsory insurance coverages that companies in the USA must purchase to protect their businesses from financial risks. Find out about them below-
-
General Liability Insurance
General liability insurance (GLI) assists in covering claims of third-party property damage or bodily injury caused by businesses. Often called commercial general liability insurance, business liability insurance, or comprehensive general liability, GLI can be pursued as a standalone policy or with other key coverages through a Business Owner’s Policy (BOP).
This insurance policy can help cover claims caused by a business, which include-
- Property Damage: Businesses or employees of an organization working in a client’s house often encounter the risk of property damage. Property damage liability coverage helps companies pay for repair or replacement expenses if they damage someone else’s belongings. For example, construction businesses working on someone’s residential or commercial buildings can cause damage to any belongings or property while working. In such cases, this insurance can help a construction company pay for the repair or replacement of the damaged asset.
- Bodily Injury: Any customer who gets hurt by slipping or falling in a store can sue the retailer on the grounds of physical injury. In this scenario, the bodily injury liability coverage can help pay for the medical bills.
- Reputational Harm: Anyone slandered by any business or its employee can file a lawsuit. General liability can help such companies cover their legal costs to defend themselves.
- Advertising Infringement: Businesses that are sued for copyright infringement can also get covered through this policy.
However, it is noteworthy that general liability does not cover work-related injuries, employees’ illness, damage to the owner’s business property, or mistakes in professional services.
-
Property Insurance
Business property insurance is a type of company insurance that protects a business’s personal property, assets, and equipment in the event of a covered loss. Also called commercial property insurance or business personal property insurance, helps cover the costs to replace or repair
- Tools and equipment used by a business to operate
- Personal property located at a business
- Furniture
- Stored inventory at the warehouse or office
- Accounts receivable and other crucial documents
- Computers run by a business
- Outdoor landscaping
- Fire damage to business property
- Theft of equipment or property
- Lost income due to property damage
-
Professional Liability Insurance
Also known as Errors & Omissions (E&O) insurance, Professional Liability insurance helps protect a company when employees make mistakes in their professional services to clients. No matter how professional a business may appear, mistakes are bound to happen when human-assisted services are involved. If any client or customer finds any mistake in your service, they can sue your business, leading to severe financial loss.
Businesses that do not have professional liability insurance risk losing customers if any mistake takes place. Small business owners must have this insurance coverage as they are likely to make more mistakes compared to large enterprises that have relatively high professional expertise. This insurance covers claims of negligence towards clients, misrepresentation of information, inaccurate advice, personal injury, copyright infringement, and defense costs.
-
Business Interruption Insurance
Business interruption insurance is a must-have for today’s companies. It is also known as business income insurance. It helps replace lost income if any company is temporarily closed after a covered loss, such as property damage. Interruption insurance covers the following operating expenses if a covered loss compels a business to close.
- Loan payments that need to be made during that time.
- The revenue the business would have normally generated if it were open.
- Rent, mortgage, and lease payments that are due at that time.
- Employee payrolls
- Taxes
- Extra expenses
- Relocation costs
- Training costs for employees to revive the business
-
Workers’ Compensation Insurance
Workers’ compensation insurance is designed to provide employees with medical facilities, wages, and other financial benefits if they become ill or injured on the job. This insurance policy is also known as workman’s comp or workers’ comp insurance. Various types of workers’ comp insurance include-
- Medical Treatment
- Disability
- Rehabilitation
- Death and Funeral
- Lost Income
Top 3 Business Insurance Companies to Look for in the USA
If you are looking for a reliable and all-encompassing business insurance service provider in the USA, you can consider these three leading insurance companies.
-
The Hartford
The Hartford is a leading investment and insurance company in the USA. It provides a range of insurance services for small to large businesses throughout the country. From Professional Liability Insurance to General Liability Insurance, Hartford has a comprehensive suite of liability coverages for all scales of businesses. Apart from business insurance, this insurance firm offers home and car insurance as well. It delivers the best contingent business income coverage included with its BOP, with zero waiting period.
-
Marsh McLennan Agency
This insurance provider focuses on loss prevention and recovery to help minimize business interruption by letting you understand available business exposures. Marsh McLennan Agency (MMA) offers employee health and benefits, business insurance, retirement benefits, and private client insurance solutions to individuals and organizations. It has around 15,000 colleagues and 300 offices across Canada and the US that are committed to delivering personalized services to clients.
-
Next
Next offers the most affordable business interruption insurance, workers’ compensation insurance, and many other business insurance coverages for its clients. It provides the best online experience by allowing customers to purchase coverage through a commercial property policy or BOP.
The CEO Views is a growing business publication house in the USA that aims to connect industry peers by sharing information through articles, blogs, news, and profiles. It covers a wide range of topics in its write-ups, including finance, insurance, technology, and more.
