A good business can generate substantial profits and wealth for the owners or shareholders. However, if the owners do not have the right business insurance to mitigate various risks, then they could potentially face tremendous losses. For example, a hurricane comes through town and floods a bakery. This would result in losses due to damage to the building, its contents, and any stock inside. Luckily, different types of business insurance are available to cover these types of losses.

Commercial Property Insurance

Commercial property insurance covers the actual physical building that houses the business and its operations. Depending on the location and the nature of the business, different types of coverage may be needed. For example, businesses located in Oklahoma may need tornado coverage, whereas businesses in Alaska likely would not.

You many also need to include coverage for internal damage in case business operations put the building at risk of incurring damage to the interior. A circus arts business, for instance, could suffer damage to ceiling support beams from the stress of aerial arts like trapeze. Therefore, it is important to tailor your commercial property insurance to meet your specific business needs.

Contents Coverage

Many commercial property insurance policies offer coverage for contents in addition to damage to the actual physical structure of the building. You can also purchase this coverage separately. In particular, the contents of a commercial building refer to anything inside that is of value to the owners and separate from inventory or stock. This could include furniture, equipment, electronic devices, machines, and so on.

For some businesses, the contents may be very expensive or even crucial to business operations. Imagine the heavy duty machinery needed in a high output bakery for example. Any loss would significant set back the business owners due to business interruption, the subsequent loss in profits, and replacement costs. Depending on the business, contents coverage may be crucial to protect against significant financial losses in the event of damage to the interior.

Stock Coverage

Frequently covered by commercial property insurance policies, stock refers to products and inventory. Like contents insurance, you can purchase it individually as well. This coverage may be extremely important to certain types of businesses as stock can oftentimes represent huge sums of money for businesses.

For example, a grocery store may carry tens or hundreds of thousands of dollars' worth of products on its shelves and in storage at any time. So if a wildfire swept through the area, as is frequently the case in California, and the grocery store catches fire, this could represent a colossal loss for the company.

As floods, tornadoes, fires, building structural failures, theft, and more may result in a loss of inventory, take time to assess which risks your company is most exposed to and purchase a suitable policy.


Business insurance is a way to protect the significant investment you made into starting a company. Although it is not legally required unless you're an employer, it is common practice to at least purchase a policy with enough coverage for your assets. Besides these three basic types of business insurance, whether you are an employer or not, you may want, need, or be required to purchase other types of commercial coverage. Carefully asses your risks so you purchase the necessary coverage and enjoy the financial protection and peace of mind business insurance affords you.