When you are a business owner, there are many things to think about when it comes to protecting your company. One of these is insurance. There are more different types of corporate insurance than those available to homeowners. So what is the difference between commercial insurance and residential insurance? Our experts at The Voss Law firm discuss what to consider when choosing the right insurance policy for your home or business. Here we are going to break it down for you.
Five major differences between residential and commercial
There may be many insured parties
In a residence document, the insured is usually a couple or an individual. In commercial policy, any number of parties can be included depending on the ownership structure of the company or property. This can create confusion if a claim is made, as disagreements may arise about who and what is covered under the policy. As a result, it is essential that you understand exactly who and what your commercial insurance policy covers. Otherwise, you may find yourself facing unexpected costs in the event of a loss.
You can get compensation for lost income from business
A residential homeowner’s insurance policy does not cover income lost from business, so in the event of an accident that results in a business closing or a business interruption, business interruption coverage can be lifesaving. To receive compensation under work stoppage coverage, the insured must be able to show the income he was making before and after the accident. This coverage can make a huge difference in the ability of small businesses to withstand a major setback.
You may need different policies for multiple businesses
Corporate insurance policies usually cover one property, but companies may operate from several properties. Insurance companies often cover several properties if they have similar uses, but usually require different policies for each property if their uses are different. For example, a company with office space and a factory as separate premises will likely need two separate insurance policies to adequately cover each. Insurance companies take into account the type of business that is being conducted when assessing property insurance risks. Factors such as whether customers or deliveries are made to the property, the value of inventory on site, and the type of equipment used, can affect the premium of an insurance policy.
Customize your coverage for specific risks
While residential insurance policies are relatively standard, commercial policies can vary widely depending on the specific needs of the business. As a result, companies must carefully consider their insurance needs before choosing an insurance policy. Some common coverage options for commercial insurance policies include covering valuable paperwork and reproduction of records, meeting local law codes when rebuilding, replacing employees’ personal property, and more. By carefully choosing the right insurance policy, companies can help protect themselves from a variety of risks.
Most business policies are written by insurance companies on a surplus line
Insurance is an important part of any business operation, yet few policyholders understand the difference between accepted insurers and excess insurance. Recognized insurers are licensed by the state in which they do business and must comply with all regulations, including those relating to solvency. It is also backed by a government guarantee fund that provides protection in the event of insolvency. On the other hand, excess line insurance companies are not licensed by the state and are not subject to the same regulations. They are also not backed by a state guarantee fund, which means policyholders can be left high and dry up if the insurance company becomes insolvent. Given the risks involved, it’s important for buyers of commercial surplus insurance to proceed with caution and make sure they understand what they’re getting into.
Insurance claims attorneys at Voss Law Firm
Insurance is vital for businesses, as it provides protection against a variety of risks, from natural disasters to liability. Commercial insurance policies are often more complex than residential insurance policies, because they are tailored to the specific needs of each company. If you have commercial insurance, you have the right to hire an attorney to help you with any claims you need to make. An attorney can help you understand your policy and coverage, and will advocate for you to get the best possible outcome for your claim. Whether you are filing a property damage claim or a liability claim, an experienced attorney can help make sure your rights are protected and you get the compensation you deserve.
Voss Law Firm, PC has been protecting the rights of policyholders for the past 16 years, and in that time, we’ve recovered billions of dollars in settlements for our clients. Ready to see what we can do for you? Complete the online contact form or call our office at 888-614-7730 To schedule a free initial consultation with a member of our legal team. We work in emergencies, so don’t pay anything unless we win your case.