What is Business Insurance? 3 Answers to the Same Question

The language of insurance is filled with terms that are open to interpretation. People use phrases like ‘business insurance’ all the time, but not always ion the same context. It’s one of many phrases that people often use as a catchall. It’s not that they don’t know what it means; they just see the meaning as flexible.
This is particularly true in the case of business insurance, because you could really define it in one of three ways.

Insurance For Business

The obvious definition of business insurance is that it is insurance for businesses. Under that definition it would refer to the group of insurance coverages that apply to businesses like liability, property and benefits insurance. Each of these categories cover a huge number of potential insurances a business might need. This group of insurances is a perfectly acceptable definition for business insurance.

A Unique Package

The gap in that particular definition is its lack of clarity. It basically refers to every available type of insurance, but not every business needs every type of coverage. There are basics that each business requires, but each business is unique. Variables like size, revenue, location, staff and industry can have a huge impact on a business’ insurance requirements. So business insurance is more a unique package than it is a broad list.

Risk Management

That package is defined through risk assessment and risk management. Modern insurance agents create business insurance packages by assessing a business from top to bottom. They use insurance as a risk management option, rather than setting out to buy insurance coverage. If they can avoid insurance, they will. True business insurance is insurance that is targeted at specific business risks.
Each of these definitions makes sense. Each one is an accurate description of business insurance. In words they are exactly the same. But, in practice, they are totally different.