Commercial lines insurance includes property and casualty insurance products for businesses. Commercial lines Insurance protects businesses from potential losses they can't afford to cover and allows companies to operate when it might otherwise be too risky. Commercial policies may be contrasted with personal lines insurance.
Key Takeaways
Property-casualty insurance includes two major categories: commercial lines and personal lines.
Commercial lines include insurance products designed for businesses.
Risks and hazards covered under commercial lines include malpractice insurance, professional liability, and builder's risk.
Commercial lines insurance includes commercial auto insurance, workers' compensation insurance, federal flood insurance, aircraft insurance, ocean marine insurance, and medical malpractice insurance. Commercial lines protect businesses against financial losses caused by accidents, lawsuits, and natural disasters.
Available coverages and premium costs vary by business type, size, and location. In 2022, the monthly cost of a business insurance policy ranged from $42 for professional liability to $70 for workers’ compensation.
Each policy is tailored to the type of business covered and the client’s unique needs. A structural engineering firm may need professional liability insurance that protects the company against claims of negligence in creating a building’s plans, performing inspections, and supervising construction. The firm might also purchase general coverage for each project, plus coverage for punitive damages.
A small, home-based business might need one or more commercial lines because homeowners insurance provides limited or no insurance for business activities. A home business might need commercial auto insurance for a company-owned delivery vehicle, worker's compensation insurance for the employee who drives the vehicle, property insurance to cover business goods stolen from the home or vehicle,and liability insurance to protect against claims by any client who claims the company's product harmed them.
Types of Commercial Lines Insurance
Workers' Compensation Insurance
Workers’ compensation is a form of employer insurance coverage that pays benefits to workers who are injured or become disabled as a result of their job.
Debris Removal Insurance
Debris Removal Insurance covers the cost of removing debris after a catastrophic event, such asa fire burningabuilding down. Before rebuilding, the remains of the old building must be removed. Property insurance alone typically won't cover the costsof removing the debris.
Builder's Risk Insurance
Builder's Risk Insuranceinsuresbuildings while under construction.
Glass Insurance
Glass insurance covers broken windows in a commercial establishment.
Inland Marine Insurance
Inland Marine Insurance covers property in transit and other people's property on the business premises. This insurance would cover fire damage to a customer's clothing from a fire at adry cleaning business.
Business Interruption Insurance
Business Interruption Insurance covers lost income and expenses from property damage or loss. If a fire forces a business to close for two months, this insurance would reimburse for salaries, taxes, rents, and net profits that would have been earned during the two months.
Demolition Insurance
Demolition Insurance covers the costs of demolishing a building damaged by aperil,such as a fire or storm. Zoning requirements or building codes may require that a damaged building be demolished rather than repaired. Demolition insurance covers the cost of tearing down undamaged portions of a damaged structure.
Crop-Hail Insurance
Crop-Hail Insurance provides coverage for damage and destruction by hail and fire. Purchased by farmers, it is designed to protect agricultural products while they are still in the field and have yet to be harvested. Crop-hail insurance protects the livelihood of farmers, who are often at the mercy of sudden weather events.
What Factors Determine the Cost of Commercial Lines Insurance?
Factors include the type of business or profession, the number of employees, and the coverage needed for each potential event.
What Is General Liability Insurance?
General liability coverage isa commercial general liability(CGL) insurance that protects businesses from claims of bodily injury, property damage, or personal injury.
What Is Workers' Compensation?
Workers' compensation, or "workers' comp," is agovernment-mandated program and type of employer insurance that provides benefits to workers who become injured or ill on the job or as a result of the job.
The Bottom Line
Commercial lines insurance includes products designed for businesses. Losses covered under commercial lines insurance include malpractice, professional liability, and builder's risk. Home-based businesses may require a commercial line because homeowners insurance commonly provides limited or no insurance for business activities.
Personal lines, as the term suggests, include coverages for individuals—auto and homeowners insurance. Commercial lines, which account for about half of U.S. property/casualty insurance industry premium, include the many kinds of insurance products designed for businesses.
Commercial lines insurance includes commercial auto insurance, workers' compensation insurance, federal flood insurance, aircraft insurance, ocean marine insurance, and medical malpractice insurance. Commercial lines protect businesses against financial losses caused by accidents, lawsuits, and natural disasters.
Personal lines insurance covers individuals against loss resulting from death, injury, or loss of property. Personal lines insurance makes it possible to do things such as driving a car and owning a home without risking financial ruin. Coverage generally depends on how much an individual is willing to pay in premiums.
The definition of 'Commercial Lines' encompasses a broad range of insurance types that provide coverage for various business-related risks, liabilities, and assets.
The only difference is that personal lines is relevant to an individual's personal property, whereas P&C insurance encompasses both the personal and commercial property of an individual.
Personal lines, as the term suggests, include coverages for individuals—auto and homeowners insurance. Commercial lines, which account for about half of U.S. property/casualty insurance industry premium, include the many kinds of insurance products designed for businesses.
Commercial insurance is divided into two main categories: property insurance and casualty insurance. Property insurance provides coverage for property that is stolen, damaged, or destroyed by a covered peril. The term "property insurance" includes many lines of available insurance.
A personal line of credit (PLOC) works much like a credit card where you have access to a certain amount of money that you can borrow up to a maximum limit. You only pay interest on the amount that you use.
1. : insurance of human life values against the risks of death, injury, illness or against expenses incidental to the latter. 2. : insurance purchased for personal or family protection purposes as contrasted with insurance of business property or interests.
Property and casualty insurance is a broad insurance, which includes coverage to your structure, property and belongings in the event of vandalism, theft, and more. If a thief were to break into your home, you would be protected up to your covered limits under your homeowners insurance policy.
Also known as insurance underwriters, commercial underwriters perform risk analyses on loan and insurance applications to determine the insurance coverage's acceptance or rejection. Commercial underwriters also structure payment agreements and verify all the information presented on the application.
A line is (1) a class of insurance, such as property, marine, or liability, or (2) in reinsurance, an amount of risk retained by a ceding insurer for its own account.
For those not in the know, Specialty Lines are a group of products available through Commercial Insurance and includes coverages like marine, Directors & Officers insurance (D&O), Mergers & Acquisitions (M&A), Accident & Health (A&H), cyber and travel disruption.
“Personal Lines Insurance” means homeowners; tenants; private passenger non-fleet automobiles; mobile manufactured homes; and other property and casualty insurance for personal, family or household needs.
A line of business (LOB) is a set of information that is used to define a type of product offered by an insurer. For example, "Personal Auto Line" is a line of business used to define the "Personal Auto" product.
Two of the most common types of commercial health insurance plans are the preferred provider organization (PPO) and health maintenance organization (HMO). Most commercial health insurance comes in the form of group coverage, offered by employers.
Property and casualty (P&C) insurance is a category of small business insurance that includes policies designed to protect business from a wide range of accidents, threats and losses regarding belongings and environments.
Commercial package policies (CPPs) are insurance policies that combine policies, such as liability and property. These policies are often meant for small- to medium-sized businesses. CCPs can include general liability, property, auto, and crime policies, among others.
Introduction: My name is Corie Satterfield, I am a fancy, perfect, spotless, quaint, fantastic, funny, lucky person who loves writing and wants to share my knowledge and understanding with you.
We notice you're using an ad blocker
Without advertising income, we can't keep making this site awesome for you.
:max_bytes(150000):strip_icc()/Commercial-Lines-Insurance-Final-aeb381c525e24ae996332d3c0fad7e7f.png "Commercial Lines Insurance: Definition, Types, vs. Personal Lines (1)")
