What is Business Insurance and What Does it Cover?

Business insurance is intended to protect an insurance business or vocation. It provides a practical plan for the graceful shutdown of a business in the event of the death of the owner or a foremost member -- or key member -- of the business. It also provides stabilization for the business by establishing better credit relations, as many companies won't do business with a company without business insurance. Generally, business insurance is sold as a package with several different policies wrapped up into one.

Business insurance also provides property insurance for the buildings and contents owned by the company as well as interruption insurance covering the loss of income resulting from fire other catastrophe. It may also provide liability protection covering the company's legal responsibilities such as errors and omissions in the services provided.

Business insurance does not provide health insurance, auto insurance or worker's compensation insurance for the company. Those are separate policies which must be purchased in addition to business insurance

What is the Predominant Form of Business Insurance?

One of the main types of business insurance is called Executive Insurance or 'key man' insurance. This is a policy taken out on the life of a company executive or senior employee whose death would cause significant loss the company. The company pays for the policy and if a death of the executive occurs, the policy will then pay the business. The money is used to get somebody else to fill the position, or can be used to gracefully shut the company down.

What is Professional Liability Insurance?

Another type of business insurance is called professional liability insurance. This insurance protects individuals or businesses from lost due to claim a of errors and omissions in the performance of professional services. This insurance covers the legal costs and resulting judgments should you be taken to trial. This insurance may also have a personal injury clause which would protect you from claims of slander or libel. It may also include a copyright infringement or intellectual property clause to protect you if a claim is brought against you alleging that you stole intellectual property or copyright.