What Does the Average Business Insurance Plan Cover?

The average business insurance plan is usually adequate to meet the needs of most smaller businesses. 90% of all businesses in the United States have and are generally pleased with the average business insurance plan. There are minimum coverages you should consider when purchasing the insurance. Regardless of your business, business insurance is a wise investment.

Property Insurance

Unless you have a home business, and have adequate property insurance coverage through your homeowner policy, one of the most important components of business insurance is property coverage. Property coverage in your business insurance policy protects you in many ways. Loss of use of the building because of fire or water damage and repair or replacement coverage of the building are covered. This coverage is critical if you operate a storefront or rent or own the building in which you operate your business.

Liability Coverage

The second component of an average business insurance plan is liability coverage. This coverage protects you in case a customer slips and falls while visiting your establishment. It can also protect you if you sell a product that causes damage to your customer.  Liability coverage gives you peace of mind as well as adequate protection against risk.

Loss of Income

If something happens to the building, and you are unable to operate for a period of time, loss of income coverage can help see your business through a difficult period that might otherwise shut it down. Loss of income protection provides a specified level of protection when something happens to prevent your business from operating. This insurance can be critical if you lease space in a building with other business tenants, because your property insurance will only protect you if your office is damaged. If another tenant's office is damaged and it causes the entire building to be inaccessible, your property insurance won't cover you. Loss of income insurance, however, will protect you in this kind of situation.

Protection for Records and Retention

The IRS recommends that businesses keep certain records for a minimum of 25 years. Losing that information in a fire or other loss could become extremely problematic, particularly if you are required to comply with Sarbanes-Oxley reporting requirements. Records insurance is typically a standard part of business insurance.

Specialty Coverages

Certain businesses have special considerations that may change the amount or type of insurance needed. Contractors, for example, often have very expensive equipment that may need special coverage within the business insurance policy. They may have additional liability issues, particularly if they are working on other people's property. A contractor's insurance should include coverage for damage done to customer and client property or injuries that may occur as a result of their presence on the property.

Landlords may need additional property and liability insurance. Farmers and ranchers may also have specialized needs, both for the expensive equipment they use and for the risk involved in operating the machinery or having employees who operate the farm equipment.