People who are just starting out in business may not be familiar with commercial insurance. That’s because many business owners have never had had any insurance other than their personal policies. Auto and homeowners policies that most consumers purchase have a standard set of coverages and exclusions. However, commercial insurance is very different and often provides these three surprising coverages.
A commercial insurance company can provide a policy that includes equipment breakdown so that losses resulting from interruptions due to manufacturing equipment and even computer breakdowns may be covered. This is different from personal insurance that often won’t cover things like a breakdown for vehicles or appliances.
Similar to equipment breakdown, business interruption insurance can cover losses due to external issues like power outages and natural disasters. When the commercial property itself or even the wider infrastructure is damaged, the owner may be indemnified for the lost revenue during that period.
Cybersecurity is increasingly becoming a vulnerability for many businesses, even those whose primary operation is not related to technology at all. Since many businesses rely on computers to send and receive orders, sensitive customer data is susceptible to theft from hackers and cybercriminals. This exposes the business owners to liability, so commercial policies can provide coverage to defend those claims.
Commercial insurance has some similarities to personal insurance policies. However, the differences between the coverages are significant and often surprising.