If you own a large multinational corporation, the chances are already high that your business is protected by some type of insurance policy.  However, many small business owners fail to address this concept in a timely fashion.  While business insurance might not necessarily be mandatory, it is a simple fact that many customers will only choose to work with firms that are properly insured.  This topic is not necessarily as confusing as it may first appear.  In order to elucidate business insurance even further, let's go ahead and look at the most common types as well as the factors associated with each.

General Liability Insurance
This is the most basic form of protection and many professionals argue that general liability is essential in today's world.  General liability plans will financially protect your organisation in the event that a lawsuit takes place and the company is found at fault.  Accidents, injuries and negligence are also protected by this package.  Any fees associated with legal representation will be addressed (up to a certain level).  However, the one drawback is that any punitive damages will be paid out of your own pocket.

Professional Liability insurance
Professional liability insurance plans are the next step up from general liability.  Anyone providing professional services will normally be required to hold this type of insurance.  Examples here can include doctors, lawyers, construction firms and even online companies supplying products to the general public.  The coverage limits tend to be much higher; offering a greater financial buffer in the event that a claim is filed.

Commercial Property Insurance
If you are operating your business out of a standard commercial building such as an office or a warehouse, commercial property insurance is considered to be mandatory.  This type of protection will provide you with financial compensation in the event of a theft, a flood or a fire.  Vandalism and other situations are also taken into account.  The contents of your premises will be insured up to a pre-determined amount and you can choose add-ons such as plans which cover antiques or valuable items if this applies. 

Product Liability Insurance
If you are producing and selling a product to the public, it is likely that you will require this plan.  Product liability insurance will protect you in the event that a good or service proves to be defective or otherwise causes harm to the end user.  The rates charged tend to be determined off of the likelihood that a claim will be filed.  For example, pharmaceutical firms will pay higher rates, as the risk of a lawsuit is naturally higher than a company which sells paper products.

As always, it is a good idea to speak with a professional in order to determine which plan suits your needs.  Consider your budget, the reputation of the provider in question as well as the premiums that you will be required to pay.  Insurance plans are intended to provide you with a professional peace of mind and with a bit of research, you can be confident that you have made the best possible decision.