What is the Difference Between Commercial and Business Insurance?

What is the Difference Between Commercial and Business Insurance?

Just like individuals need health insurance, home insurance, and car insurance, businesses need insurance coverage as well.

Consider these scenarios:

What if an employee or customer is injured on your premises?
What if your products are faulty, or cause physical or financial damage?
What happens if a fire flood, or earthquake damages or destroys your office location?

That is where business and commercial insurance protects and defends your business. It enables you to get back to business quickly in the event of an accident, lawsuit, or disaster.

Commercial Insurance Vs. Business Insurance


When business owners are looking for the best insurance policy for their business, they often confuse the terms ‘commercial insurance’ and ‘business insurance.’

Despite the fact that they sound different, they are actually the same thing and the terms can be used interchangeably.

Some business owners may be under the impression that they need one type of insurance or the other, which can be confusing.

The reality is that commercial insurance and business insurance are simply a category of insurance that provides coverage for all types of businesses. 

The Most Important Types of Commercial and Business Insurance


If you own or run a business, there are some types of commercial insurance that you must have, and some that are optional. Here is a breakdown of the most important types of business and commercial insurance:

General Liability Insurance


Sometimes called Commercial General Liability or CGL, this is the most basic form of commercial liability coverage. If you own a business, having General Liability coverage is not optional.

General liability insurance helps cover: 

  • Costs for property damage claims against your business
  • Medical expenses if someone is injured at your company
  • Administrative costs to handle covered claims
  • Court costs, judgments, and settlements for covered claims

Keep in mind that general liability insurance usually does not cover: 

  • Damage to your own business property or office
  • Personal injury claims made by your own employees
  • Auto accidents caused by you or your employees while driving for work purposes 

Workers’ Compensation Insurance


Workers’ compensation helps cover work-related injuries and illnesses by paying for medical treatment and replacing lost wages while your employees recover. Most states will require workers’ comp insurance if you have at least one employee.

Commercial Property Insurance


Commercial property insurance helps cover property damage to your own business property. It protects your company’s physical assets from fire, explosions, burst pipes, storms, theft, and vandalism. Keep in mind that earthquakes and floods typically aren’t covered by commercial property insurance, unless added to the policy.

Professional Liability Insurance


Sometimes known as errors and omissions insurance, can help cover errors in services your business provides. It helps cover claims including negligence, misrepresentation, violation of good faith and fair dealing, and inaccurate advice. Depending on the terms, a professional liability insurance policy may also help cover privacy violations that can threaten your business.

Umbrella Business Insurance


If you feel that your business is especially at risk of being sued or is in a particularly litigious state, then you may want liability coverage that goes beyond the maximum amount offered by your commercial liability insurance policy.

In these cases, you can often buy an umbrella policy or excess insurance policy to add additional coverage. Umbrella policies can cover you for liability claims that go beyond what your typical policy covers.


Business Insurance is Needed for Large and Small Companies

Some business owners think that business insurance is entitled to small companies only. Others think that only larger corporations need commercial insurance.

This can cause business owners to miss out on important and helpful insurance coverage.


Whether your business is big or small, it is crucial for you to speak to your insurance agent to ensure you have the most appropriate insurance policy for your business.

Commercial insurance comes in many packages that can be uniquely tailored to fit the needs of different kinds of businesses.


Jackson & Jackson Insurance Agents and Brokers offer commercial insurance with over 80 years of experience serving the San Dimas, Glendora, and LaVerne business communities.

We can help you design a specialized package according to your property, liability, and casualty needs. Our agents are proactive in identifying any factors that may increase your business insurance premiums or change your risk, and provide consulting and risk management options to protect your business.

Whether you are a retailer, wholesaler, or contractor we can tailor a package to meet your specific needs and requirements. Call today or fill out one of our free online quote forms to get started.

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