Personal auto

A personal auto policy, or PAP, also covers property damage and liability. Most people are familiar with the concept of auto insurance, because most auto owners are legally required to have it. If the insured is at fault in an accident, a PAP can provide coverage for bodily injury to another person or damage to another person's auto. It also provides coverage for damage to the insured auto from a collision, fire, theft, or similar cause of loss (not wear and tear).

Personal watercraft

If a person owns a boat, he or she may need a personal watercraft policy, which covers legal liability arising from accidents involving the boat and physical damage to the boat.

Personal umbrella

Sometimes, people need higher limits of liability insurance than they can purchase through a homeowners' policy or a PAP. In these situations, personal umbrella coverage can provide additional protection. This is most appropriate for individuals or families with a high potential for large liability losses, and policy limits are usually in the millions.

What Are the Types of Commercial Insurance Policies?

Now, let's turn our attention to commercial policies-those purchased by a business to cover its loss exposures. Many businesses purchase a combination policy, such as a commercial package policy (CPP) or a business owners policy (BOP), but we'll look at each type of policy separately (although this is not a definitive list):

Commercial property

Commercial property insurance covers damage to buildings or their contents that results from fire, vandalism, and other causes of loss.

Commercial crime

Commercial crime insurance protects against losses from theft of business property and money. This coverage can include employee theft as well as theft by others during a robbery or burglary.

Commercial general liability (CGL)

CGL insurance protects a business against its legal liability to others for bodily injury and property damage. This coverage can apply to damage or injury that takes place at a business's location or because of one of its products. For example, a customer could slip and fall on a store's wet floor and be injured, and a customer could also be injured by using a defective product.

Commercial auto

Commercial auto is similar to personal auto insurance except that it applies to a business rather than to an individual. It covers liability for bodily injury and property damage caused by the use of the business's autos and also damage to the business's own autos when they are in an accident.

Workers compensation

Most business organizations are required to pay certain benefits to their employees for job-related injuries and illnesses. Workers compensation insurance covers these benefits.

Commercial umbrella

A commercial umbrella policy provides additional liability limits beyond those provided by the CGL, commercial auto, and other policies-protecting a business in the event of a large liability loss.