Commercial lines insurance includes property and casualty insurance products for businesses. Commercial lines Insurance helps keep the economy running smoothly by protecting businesses from potential losses they couldn’t afford to cover on their own, which allows businesses to operate when it might otherwise be too risky to do so.
Commercial policies may be contrasted with personal lines insurance.
KEY TAKEAWAYS
- Property casualty insurance can be broken down into two major categories: commercial lines and personal lines.
- Commercial lines account for about half of the U.S. property casualty insurance industry and include the many kinds of insurance products designed for businesses.
- Risks and hazards covered under commercial lines include, for example, malpractice insurance, professional liability, builder's risk, crop insurance, and many other industry-specific coverages.
Understanding Commercial Lines Insurance
Commercial lines insurance include products, such as commercial auto insurance, workers compensation insurance, federal flood insurance, aircraft insurance, ocean marine insurance, and medical malpractice insurance. Commercial lines protect businesses against potentially devastating financial losses caused by accidents, lawsuits, natural disasters, and other adverse events. Available coverages and premium costs vary by business type, size, and location. In 2019, the five largest issuers of commercial lines, as measured by the amount of premiums written, according to the National Association of Insurance Commissioners, were State Farm GRP, Berkshire Hathaway GRP, Progressive GRP, Liberty Mutual GRP, and Allstate Insurance GRP.
While all commercial lines share some similarities, each policy will be tailored for the type of business being covered and the client’s unique needs. Suppose a structural engineering firm needs professional liability insurance. An insurance policy could protect the company against claims of negligence in creating a building’s plans, performing inspections, and supervising construction, as well as against claims of failure to render professional services. The firm could purchase general coverage as well as specific, additional coverage for each project, plus coverage for punitive damages.
Other Considerations
Commercial lines aren’t just for large corporations. Even a small, home-based business might need one or more commercial lines because homeowners insurance provides limited or no insurance for business activities. For example, a home business might need commercial auto insurance for a company-owned delivery vehicle, workers 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 business’s product harmed them.
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