What is 'Commercial Lines Insurance'

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.

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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 2013, the five largest issuers of commercial lines, as measured by the amount of premiums written, were American International Group (AIG), Travelers, Liberty Mutual, Zurich Insurance Group and ACE Ltd. None of these companies had an especially large market share, however.

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.

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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 they were harmed by the business’s product.