Different Types of Insurance for Mobile Business

As a small business owner, you give everything daily for your business. However, it is more evident than ever after the last few years that the unexpected can and does happen. The right insurance is critical to protect yourself from potential losses. Choosing the right policies can be overwhelming, with so many choices available. How do you know which insurance policies are necessary for your business? This blog explores several types of insurance to help you make a well-informed decision about insurance coverages and what policies you need to protect your business. While this post applies to all small business owners and entrepreneurs, we will discuss a few specifics about mobile business owners.

Mobile Business

A mobile business is a small business operated free from a permanent, physical location. Instead, mobile businesses work from a vehicle like a food truck, pet grooming, home repair services, or other types of businesses. A mobile business model is becoming more popular because of its flexibility while allowing owners to travel and reach customers in a wider geographical region. Additionally, mobile businesses typically have lower financing needs and lower overhead costs such as rent or utilities.

Insurance

Insurance involves a formal agreement between a business owner and an insurance company. Various policies are secured to protect business owners from potential financial losses from unexpected events like catastrophic events such as fire or flood, customer claims for injury or product-related issues, damage to vehicles or equipment, and many other aspects of business ownership that may result in financial losses. Business owners must hold several different policies to have adequate financial protection. For example, some policies may be required by the state where the business is located. Other policies may be required by financial institutions to secure a loan. Therefore, insurance is a vital part of business ownership, and it is important to understand different policies and which ones apply to your specific situation.

Types of Business Insurance

There are many different types of insurance policies available for business owners. We are discussing a few of the most common business insurance options. Most business insurance policies are sold in bundles, and some are only sold in conjunction with another. For example, business interruption policies are not sold separately but are added to another policy.

Business Liability Insurance

Business liability insurance is also commonly called general liability insurance. It is a professional liability insurance policy imperative for business owners to hold. A general liability policy protects businesses from “general” claims involving property damage or injury where the business or an employee is at fault. Liability insurance is an essential policy for business owners because it can cover damages, legal fees, or settlements in cases where a lawsuit is filed against the business. General liability policies also serve as product liability insurance, protecting business owners from claims involving their products.

Businesses are often required to have a general liability insurance policy by financial institutions issuing loans, storefront or office space rental contracts, and by licensing boards in various industries.

Commercial Property Insurance

Real estate or physical structures used for business operations are considered commercial property. On the other hand, personal property is used for private living space. Commercial property insurance is a protective policy for business owners who utilize commercial spaces. It covers commercial property that may experience losses from fire, theft, or natural disasters as defined in the policy. A commercial property policy covers physical locations and equipment and does not typically cover vehicles.

Business Interruption Insurance

Business interruption insurance is also referred to as business income insurance. Business interruption insurance will replace lost income when a business must close down due to losses covered in the policy. Business interruption policies cover perils such as lightning strikes, fire, theft, wind, and falling objects. This policy is not sold separately but is available to purchase with another policy, like a property policy.

Commercial Auto Insurance

Vehicles used for conducting business require dedicated insurance because your personal use auto insurance does not cover them. Commercial auto insurance provides coverage for business-use vehicles. In addition, the policy offers several coverages for cars, vans, trucks, or other vehicles used for business purposes.

Cyber Liability Insurance

Every business today uses some form of technology, making every business, big or small, vulnerable to cyber attacks. As a result, businesses need a policy option to help protect against cyber security concerns and data breaches. Cyber liability insurance provides protection when network security fails due to malware, ransomware, and compromised email systems.

Commercial Umbrella Insurance

An umbrella policy is considered “extra” insurance. It provides protection over and above existing limits and coverage on other policies. Commercial Umbrella insurance provides additional coverage above the limits of the business owner’s other primary policies. The policy aims to protect the business from financial loss on claims exceeding policy limits for policies like general liability and commercial auto insurance.

Workers Compensation Insurance

When employees are injured on the job, workers’ compensation insurance provides benefits to those employees in the form of covered medical expenses, replacing lost wages, and rehabilitative services like physical therapy when needed following injuries or illness. State requirements vary, but most states require businesses to have workers’ compensation insurance.

Mobile Business Insurance

Mobile business owners have different insurance needs than more conventional, brick-and-mortar businesses. A mobile business typically uses a vehicle to travel around, providing products or services to customers. Risks associated with running a mobile business involve traveling, equipment, and liability when performing services.

The following insurance policies are recommended for mobile business owners:

Business Liability / General Liability Insurance
Commercial auto insurance for business-use vehicles
Workers’ compensation if the mobile business has employees
Inland Marine Insurance: a policy that covers the transportation of products or equipment.

What type of insurance do you need?

Many factors affect what type of business insurance each business needs. While there are some insurance policies almost all businesses need, like general liability insurance, other policies, for example, commercial property insurance, may not be applicable for businesses that do not use or own commercial buildings. It is vital to research options, asses risks, consider budgeting limitations, and consult with an insurance agent when deciding which policies are needed. A reputable insurance agent will cover factors such as coverage limits, deductibles, and premiums. Choosing the right insurance policies is critical for protecting business assets and people.