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September 13, 2019 David Dyck

A basic guide to commercial insurance

Insurance enables you to focus on running your business without having to worry about the financial burden of an accident or injury occurring.

If you own or operate a business, insurance provides the peace of mind knowing that your business is safe without having to worry about certain unforeseen events. In many cases it’s also contractually obligated by your landlord and clients.

The primary job of insurance is to provide financial protection against certain risks. It enables you to focus on running your business without having to worry about the financial burden of an accident or injury occurring.

Any lawsuit or insurable disaster could cause significant problems. Everything a business does carries some degree of risk, whether its ordering professional services or setting up a photo shoot. You might also have an office full of computers or other equipment that could get damaged. These risks can reveal themselves in lawsuits, accusations of wrongdoing, slips and falls on your premises, or the one most people think of — an inch of water on the floor.

There are several kinds of insurance every business should consider:

  • General liability insurance
  • Professional liability insurance
  • Contents insurance

General liability insurance

Commercial General Liability (CGL) policy will respond when a business or its owner is sued because someone was injured or somebody’s property was damaged. It doesn’t matter if the claim is true, the policy will cover legal expenses and any award granted.

An example of this policy activating is if someone slips and falls on your businesses’ premises, and decides to sue. A CGL policy would cover legal expenses as well as any award or settlement that resulted.

Professional Liability insurance

Professional Liability insurance — also known as Errors & Omissions insurance (E&O) — is usually triggered when a business is accused of failing to properly render professional services, or that they were acting negligently.

Contents insurance

Contents insurance covers the physical things your business owns, like computers, tools, improvements you make to your space as a tenant, or costs associated with relocating in the event of fire, water damage, flood, theft, or other perils included in the policy.

These physical items are typically covered on a replacement cost basis, meaning if they are totally destroyed the insurance policy pays for a similar item new. It is important to have a high enough contents limit to replace everything in your business.  

David Dyck

David is the editor-in-chief of Apollo Magazine, and co-founder of Apollo Insurance Solutions. He is an award-winning journalist who also enjoys ping pong and swimming with whale sharks.