Business insurance works like any other insurance, in the sense that it is a cover for your business on the whole against any kinds of mishaps that may take place. If you did not have business insurance, the losses you would have to bear in case of any event would have been quite huge. It is also important to understand that business insurances can be on different levels, and you need to pick up the right insurance for your business.

All businesses are not necessarily a separate operation; there are home based businesses also which are run especially by women. However, this does not mean that there shouldn’t be any insurance covers taken. Although, running a business brings in its own risks, and expenses, one can never say in which direction events will turn for you.

Business Insurances can be of different types :

1. The law requires that you take an employer’s Liability Insurance which protects you in case your employees make claims about any illness or accidents that they have suffered while at work. A huge compensation amount may be the result if you are not insured. This works especially well if you own factories and the like.
   
   
2. If you own a car rental company or a business that works with vehicles, having a Motor Insurance is advisable in case the vehicles are damaged, stolen or your staff is injured when at work.
   
   
3. A Liability Insurance is taken if you sell products to the public or non employees use your business premises. This insurance covers you in case anybody is hurt while on your premises.
   
   
4. If your business is located in premises that are your own, a Building Insurance will take care of insuring the building or space and the contents. In case of letting out the property, the landlord should be insured.
   
   
5. Taking out an insurance cover for some of your key employees is called a Key Man Insurance. This would cover them in case of any accidents etc and also enable them to get back to work faster.
   
   
6. If you have a fire place in your house, or office, it makes sense to take out a Business Interruption Insurance. This way the property is covered against damage.
   
   
7. An Overhead Insurance covers things like rent, salaries, any interest payments related to the business and so on. This is advisable especially if the business is making profits.
   
   
8. An Umbrella Liability Insurance covers you in case somebody else takes legal action against you. This upgrades basic auto, homeowners and business insurance to cover such events.
   
   
9. A Business Owners Policy takes care of insuring the business property and any equipment owned by you. This works well, especially if the equipment used is very expensive and is a huge investment.

A Business Property Insurance and a Business Interruption Insurance can be taken here also. A Workers Compensation Insurance covers any medical expenses that may arise if any of the staff are injured at your home. A Comprehensive General Liability Insurance is a must if there are visitors or clients who are entertained at your home for business purposes. This takes care of any injuries which may occur to them. A Disability Insurance would give you a small monthly income if you are unwell and not able to work.

Although the above policies cover the business premises, and its contents including employees, you must remember that a majority of the accidents that take place are of the natural kind. Another problem with them is that they cannot be foreseen or predicted. If your business is located in an area that is prone to water logging, heavy rains, heavy monsoons etc, it is a must to go for a policy that covers you in case of floods. Floods have been known to cause irreparable damage. Earthquakes are generally not covered in policies such as a Business Interruption Insurance, although there are separate insurances such as a Special Earthquake Insurance Policy which can be taken out exclusively for that purpose.

However, the deductibles in such a policy are also different. Although it was not a commonly applied for cover before, the increase in the number of acts of terrorism have only made people more scared and worried about what could happen to their business in such an eventuality. Their answer would be the Terrorism Risk Insurance Act. However, the cover has a lot of clauses to it also, and more importantly covers death and injuries caused due to terrorist acts, to your workers.

Having a cover would not only help in taking care of your property and people, but more importantly go a long way in reducing your own losses. It is always advisable to take the necessary covers so as to reduce risk to a certain extent.