Differences in insurance by industry
Business insurance coverage is designed to protect a company from damages caused by lawsuits, natural disasters, or accidents. It’s essential for businesses that want to safeguard their financial assets and physical and intellectual property.
Business insurance differs by industry–as companies face unique risks depending on their operations. An e-commerce business will likely require different coverage than a manufacturing business. To illustrate, the former might need to focus on cybersecurity insurance and product liability insurance, while the latter may benefit better from also having complete commercial property insurance and equipment insurance coverage.
Business insurance by industry
Here’s a quick look at the common risks faced by various industries and what type of business insurance coverage may best address their concerns:
Professional services
The professional services industry encompasses accounting, advertising, marketing, and legal services, among others. In this industry, the output is an expertise rather than a manufactured product.
In some cases, work mistakes or instances of negligence can cause financial losses, either to the business or the client. Thus, it may be beneficial to take out professional liability insurance and/or errors and omissions insurance.
Retail
The retail industry consists of businesses selling consumer goods. These include groceries, fashion outlets, department stores, etc. Retail businesses should consider product liability insurance in case their products cause injuries or property damage to their customers, along with commercial property insurance. Cyber insurance is also an important coverage, even if the business doesn’t have online sales. Business interruption insurance is another important coverage to have, as it helps replace business income in the event of a situation where business can not be carried out as usual.
Manufacturing
The manufacturing industry involves processing raw materials into consumer goods. It also concerns the repair and installation of industrial equipment. Companies in this industry deal with a lot of equipment stored in large factories and warehouses. Commercial property insurance and equipment insurance are designed to safeguard these types of assets, and liability insurance, cyber insurance and business interruption insurance can help provide the business with additional insurance coverage.
Transport and distribution
The transport and distribution industry has a lot of moving parts, specifically vehicles. As such, businesses in this field may greatly benefit from commercial auto insurance, which protects from injuries or damages caused by a business vehicle, as well as cases of vehicle damage, theft, and vandalism. Even smaller businesses may have a need for commercial insurance policies, if they use a vehicle as part of their business.
Food service
Food service refers to any business that deals with the creation, distribution, and serving of food. This includes restaurants, cafes, catering services, and other food companies.
Because these typically require a lot of manpower and their staff often interacts directly with the products and the customers, food service businesses should have worker’s compensation insurance, which helps cover on-the-job injuries or illnesses. Food service businesses should also have a range of other insurance coverages like commercial property, liability insurance, and business interruption insurance.
Tech and e-commerce
Tech and e-commerce businesses are highly susceptible to cybercrimes, such as data breaches and online fraud. In addition to other commercial insurance coverages, too mitigate related risks, it may be a good idea to have cyber insurance, which can help protect them and provide a financial cushion in case of damages caused by such events.
Assess what business insurance you need
Your business will face a unique set of risks, and you must pinpoint these prospective problems to obtain business insurance coverage that adequately protects your operations, staff, and financial stability.
