According to the IBIS World, the market size of the business insurance industry, measured by revenue, is worth USD 243.9 billion in 2023, and it is expected to show an increase of 1.6% in the year.
You’ve been in business for a while, or maybe this is your first time starting up. Either way, you have to make sure that you’re fully covered when it comes to insurance. There are many different types of business insurance, so let’s go over them together.
General Liability Insurance
General liability insurance covers your company if you’re sued for damages related to bodily injury, property damage, or other personal injuries. It also protects against claims made by customers who’ve suffered from product liability or advertising and marketing errors.
Most small businesses need general liability coverage to protect their business from lawsuits. Even if your business has no employees, you’ll still need this type of coverage because all businesses have the potential to be sued by individuals who are injured at their premises. For example, a guest slips on an icy sidewalk outside your store.
Professional Liability Insurance
Professional liability insurance, also called malpractice insurance, is a type of business insurance that protects professionals if they are sued for malpractice, negligence, or other wrongful conduct.
According to the Digital Journal, the professional liability insurance market is expected to reach USD 54.21 billion in 2028, growing at a compound annual growth rate (CAGR) of 3.5% from 2022-2028.
Professional liability insurance is usually required by law for certain professions. For instance, doctors and lawyers must carry professional liability insurance to protect them from lawsuits arising out of their work as professionals. However, many other types of businesses may also purchase professional liability policies as well as general liability policies to cover their legal risks.
Professional liability policies are often purchased as part of a general liability policy package with property damage and bodily injury coverage included at no extra cost.
Product Liability Insurance
Product liability insurance protects you against claims of injury or death caused by a product you manufacture or sell. It covers damage to property and bodily injury and the cost of defending a product liability lawsuit.
Workers’ Compensation Insurance
Workers’ compensation insurance covers the costs of an employee’s injury and medical treatment. It also covers temporary replacement workers and legal fees incurred if a worker files a lawsuit for job-related injuries.
Umbrella insurance is a secondary insurance policy that provides additional liability coverage over and above the limits of your underlying policies. It’s essential to have umbrella insurance because it provides extra protection from large, unexpected claims.
The global umbrella insurance market, as per Allied Market Research, was worth USD 72.5 billion in 2021, and it is expected to reach USD 170.7 billion by 2031, with a CAGR of 9.2%.
For example, let’s say you own a business in which employees are likely to be injured on the job. If an employee was hurt in a workplace accident and sued for damages worth $1 million, your standard worker’s compensation coverage could pay out only up to $500,000 before any other sources of insurance kicked in.
The remainder of that claim would fall on you as an individual insured party. And without umbrella liability coverage, any financial consequences could put your business at risk for closure.
Cyber Liability Insurance
Cyber liability insurance is a type of property and casualty insurance that protects you from cyberattacks.
What’s the difference between cyber liability and general liability? While general liability covers physical damages to your business’s property, cyber liability covers digital damages like damaged computer systems or stolen data. The two types of coverage often overlap, but it’s essential to know that they’re not interchangeable.
Who needs cyber liability insurance? If your business has access to client information in any way (for example, if you provide services related to financial transactions), then you should consider buying this kind of coverage.
Cyberattacks can happen anywhere, so having some form of protection against them is essential to running a successful business today.
Cemetery insurance is a type of business insurance that covers the cost of maintaining a cemetery. If you own or operate a cemetery, then you should have this type of coverage.
When purchasing cemetery insurance, it’s essential to know the number and size of the graves in your cemetery. This will determine how much you pay for each grave and other costs related to maintaining your burial plot.
For example, some cemeteries require their owners to purchase “perpetual care” packages with their plots, an additional fee that ensures that all maintenance costs are covered by the insurance provider until they expire (usually after 100 years).
Cemetery owners can also purchase different types of policies depending on whether they want basic liability protection or full-service coverage with additional features such as loss assessment fees for stolen property, legal defense costs, vandalism payments, and so on.
Commercial Property Insurance
Commercial property insurance covers the buildings and their contents. It also covers loss of income and extra expenses that you may incur if your building is damaged and you’re unable to use it for business purposes, including legal fees related to a property claim.
Commercial property insurance can protect against fire, theft, or vandalism that causes damage to your business premises or its contents. In addition to covering the physical structure of your building, commercial property insurance also covers personal items such as computers, furniture, and inventory.
We hope this post has helped you understand the different types of business insurance. Keep in mind that each business is unique, so it’s essential to review your needs with your insurance advisor before purchasing a policy.