In today’s competitive environment, businesses need to go above and beyond and work with tight deadlines to get on top.While operating with full efficiency, accidents can occur, but if not protected against them, business owners can suffer heavy losses.Therefore, commercial insurance is a must for every big and small organization; read on to know more.

So What is Commercial Insurance & How Does it Work? Simply put, commercial insurance offers protection to your business from risks specified in your policy.Different businesses face different risks, so their coverage amount and type will differ.However, things like injury claims, equipment damage, cyberattacks, property damage, and other liabilities related to businesses are usually covered in a commercial insurance policy.

Here’s how commercial insurance work: As a business, you’ll sign a contract with the insurer that will specify everything you need coverage against, such as the risks mentioned above.It will also have the coverage amount mentioned along with your premium cost.Once signed, you’ll become protected as long as you’re paying the premiums on time.

Now in case of an accident or damage that was protected in the policy, you will file a claim with the insurer.They’ll investigate the situation and extent of damage, and if everything checks out, you’ll receive compensation for the loss.Some Common Risks Commercial Insurance Covers: General Liability: It covers injuries or damage to other people/properties.Professional Liability & Malpractice: Protects against losses incurred due to wrongful acts and negligence by professionals leading to loss and injury of another person.Product Liability: Protection against product faults and damages, injury, illness, or death caused by a bad product.Commercial Auto: Helps pay for car accidents caused by the business owner or his employees.Workers’ Compensation: Offers protection to workers if they are injured during the job.Cybercrime: Protects from the risks caused by the use of the internet or online communication for business purposes.Property Coverage: Losses and damages from fires, floods, storms, and vandalism, etc., are paid for under this policy.Business Owner’s Policy: Couples liability coverage and commercial property into single coverage.Cost of Commercial Insurance: The commercial insurance cost is calculated based on various factors related to your business.

The riskier your business is, the higher the monthly premium cost will be.Here are a few things insurers look at when crunching number: Your company typeNumber of employeesOperating locationOperational yearsHow exposed you are to the riskOperational yearsEmployee payrollIndustry of businessAny past claims (if you bought a policy in the past)There are many more factors that insurers consider when calculating the costs, and they depend on your business.But the ones mentioned above are the most commonly used ones.

Parting Words: Keep in mind, commercial insurance is only focused on protecting the business from losses, it will not offer protection if a personal loss occurs; personal insurance is needed for that.