Common Types of Business Insurance
• Business Liability Insurance: Business liability insurance can have any number of property and liability protections. The most common form of business liability insurance is a “comprehensive general liability” (CGL) policy. These policies will insure any number of risks commonly faced by businesses, such as premises liability, product liability, professional malpractice, negligence, environmental liability, etc.
⁃ Note: It is common for insurers to require separate policies for product liability and professional malpractice liability coverage.
• Professional Liability Insurance – Professional liability insurance, often called “malpractice insurance”, protects the insured from losses incurred as a result of a specific type of negligent professional practice. A specific type of professional liability insurance is “director & officer liability” insurance, which is purchased by a business to indemnify its officers and directors from losses suffered in the performance of their business duties.
• Others – Other common types of insurance include: crime, flood, pollution, mortgage insurance, title insurance, worker’s compensation, unemployment, cyber privacy, etc.
An individual or business may purchase any of the above-referenced types of insurance, as well as many other common types of insurance. Some of the types of insurance may be required by law or by professional trade industry in a given jurisdiction.
⁃ Discussion: What types of professional practitioners do or are generally required to purchase these types of policy? Why do you think companies purchase D&O insurance to cover its officers and directors? Why do you think many businesses purchase these types of policies? Can you think of a situation where a business would not benefit from such a policy?