Individual & Business Insurance: A Comparison

The simplest way to explain the difference between individual and business insurance is this: individual insurance protects you and your family personally while business insurance protects the different aspects of your business that pose a risk to financial loss. There may be, however, a certain amount of crossover between the two. Personal life insurance, for example, is designed to pay benefits to your beneficiary, usually a family member, in the event of your death. Key man insurance is also life insurance but of a commercial type. It's designed to pay the business of which you're a key person, whether as owner or as a key employee, where you serve a crucial role and without whom the business could financially flounder in the event of your death.

Commercial Lines and Personal Lines

Personal Lines Insurance, another name for individual insurance, consists of property and casualty products designed to protect you and your family from suffering certain financial losses. It may include:

• Life insurance
• Auto insurance
• Homeowners insurance (or renters insurance)
• Medical insurance
• Disability insurance
• Umbrella insurance

Some individual insurance coverage may be required, such as the homeowners insurance you carry. Your mortgage company requires that you maintain a certain level of home owners insurance protection to protect their interest in your home, which has been used as collateral against the mortgage loan they provided you. A certain amount of auto liability insurance is also required by most state's laws, including here in North Carolina, in order for you to legally drive your car on public roads.

Commercial Lines

Business coverage is designed to protect businesses from certain financial risks that allow them to operate without fear of being wiped out financially in the event of a catastrophic loss (and even smaller, covered losses). A business insurance policy is typically written for a particular business enterprise in an effort to cater to that business' specific needs. It could be written for any entity ranging from a huge, multi-national corporation to a small home-based business desiring protection from potential liability suits. Typical business insurance products may include:

• General liability
• Product liability
• Professional liability (aka errors and omissions insurance)
• Commercial property  (all-risk or perils-specific)
• Business interruption
• Home-based business insurance
• Workman's Compensation
• Commercial auto

There are numerous options when it comes to the types of business insurance available. It's best to consult your trusted insurance agent to determine the exact insurance needs for your specific business.