What are the three types of business insurance?
I’m trying to understand business insurance better. Can someone explain what the three main types of business insurance are, such as general liability, property insurance, and workers’ compensation (or any other core types)? I’d like to know what each type covers, why it’s important, and which businesses typically need them. Real examples or experiences would be very helpful.
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Most people group business insurance into three core types, even though there are many add-ons and variations. Here’s a clear, natural explanation that fits well on Reddit and doesn’t sound AI-generated:
1. General Liability Insurance
This is the basic coverage almost every business needs. It protects you if someone claims your business caused bodily injury, property damage, or personal injury (like advertising issues). For example, if a customer slips in your office or you accidentally damage a client’s property, general liability helps cover legal costs and settlements.
2. Commercial Property Insurance
This covers the physical things your business owns or relies on—such as your building (if you own it), equipment, inventory, furniture, and tools. It usually protects against losses from fire, theft, vandalism, and some weather damage. Even home-based businesses often need this if they have valuable equipment.
3. Workers’ Compensation Insurance
If you have employees, this is often legally required. It covers medical expenses and lost wages if an employee gets injured or sick because of their job. It also protects the business from being sued by the employee over workplace injuries.
A lot of businesses bundle the first two into a Business Owner’s Policy (BOP) to save money, then add workers’ comp if they have employees. Which ones you actually need depends on your business type, location, and whether you have staff.