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Discussion of Business Insurance Types

In everyday operation of the business, the business owner realizes many different risks facing the business. However, this arouses greater needs of initiating a form of risk management which will be used to hedge against the risk of those uncertain losses. Notably, business insurance is one of the potential way of guarding business against losses due to these events that may occur during the regular course of business. It substantially helps in protecting business financial assets, intellectual and physical property from lawsuits, vandalism, theft, employee injuries and illness among many other more. In the paper various types of business insurance have been identified. They include; public liability insurance, employers’ liability insurance, product liability insurance, equipment breakdown insurance and they are broadly discussed in the paper with their importance well provided.

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Public liability insurance as one of the types of business insurance is very essential as it provides the reassurance required for unexpected circumstances. Any individual can raise a claim against a business owner especially when they feel their property has been injured or damaged because of your business activities carried out on daily basis. However, since several factors leading to damage and injury may occur in the business even if not planned for, it is therefore crucial to have public liability insurance. Moreover, the public liability insurance plays a substantial role in ensuring that the business owner finances are not impacted as a result of claims from third-party property damage or third-party bodily injury. It ensures all legal and compensation fees are covered even if it happens that the business itself is not at fault.

Nevertheless, employer’s liability insurance is another type of business insurance that serves as a legal requirement for most businesses. Having employed many members in the business, there are many unavoidable circumstances associated to those employees such as becoming ill or injured as a result of work. Employer’s liability therefore executes a significant role of providing protection to those employees in case of any un expected injury or illness (Nelson et al., 2010). Furthermore, this type of business insurance covers both part-time and full-time employees. Therefore, operating under this type of business insurance cover results to a healthy business environment as employees are guaranteed full safety at their work place.

Furthermore, alongside public liability insurance, there is product liability insurance which provides another layer of cover and it mostly deals with businesses concerned with producing product, supplying product and designing. Notably, as a result of unlikely circumstances, the produced product can cause damages or injury to the third party or their property and the business can be held liable. As a business owner you might be expected to provide compensation and pay legal fees associated with the claim. Therefore, having product insurance cover it provides you with the reassurance that those costs are going to be covered and everything settled. Product liability insurance therefore poses greater importance to the business as it helps the business owner to deal with unexpected happenings which results to compensating the third party and paying legal fees.

Ultimately, equipment breakdown insurance is also a type of business insurance and it covers the breakdown of business appliances. Most business rely on various tools such as machinery, photocopier, network server among many other more in their operation. Therefore, any resulting problem with the running of these items cost both money and time (Nelson et al., 2010). However, having equipment insurance serves as a greater importance to the business as it protects the business against such unforeseen expenses.

However, from scrutinization of various types of business insurance, I choose equipment breakdown insurance as the most necessary in my intended business. The primary role of my business will be to ensure customer satisfaction through production of sufficient products for them. It will therefore require more equipment for the production of these products. Since the business equipment are expensive and they wear and tear after some time of working, I will insure them in order to get the reassurance of having other ones in case of breakdown. Moreover, I will also consider employer’s liability insurance in order to protect my employees incase they become ill or injured for they will be the most important assets in my business.


Nelson, M. L., Peterson, J., Rariden, R. L., & Sen, R. (2010). Transitioning to a business rule management service model: Case studies from the property and casualty insurance industry. Information & management, 47(1), 30-41. Web.

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