What is Personal Insurance vs. Commercial Insurance?

Insurance is complicated as I have said before. There is sometimes confusion as to what type of policy you may need. There are a variety of policies out there and only a Insurance Agent can help you navigate to the right insurance program for you.

Typically a business has a few characteristics that leads to commercial policies. This includes a business name or entity, its purpose is to generate money or profits, they employ others, and have clients/customers/policyholders/members. If you tick any of these items then you will be looking at a variety of commercial policies such as the following:

  • General Liability                           
  • Workers Compensation
  • Product Liability
  • Business Property
  • Employment Practices
  • Errors & Omissions
  • Directors & Officers
  • Inland Marine
  • Business Auto
  • Cyber Liability
  • Crime
  • Bond
  • Commercial Umbrella
  • Boiler & Machinery
  • Pollution
  • Medical Malpractice
  • Builders Risk
  • Business Interruption

In the case of personal, assets are owned by an individual or a married couple. They do not have employees or clients. In some situations there may be a business entity but this will be scrutinized by the insurance company. There may also be a situation where a home owner rents out their home to others for money but this will also be reviewed by the insurance company for acceptability. Personal Insurance includes the following types of policies:

  • Homeowners
  • Personal Auto
  • Vacation Homes
  • Investment Properties
  • Rental Properties
  • Vacant Properties
  • Collections Insurance
  • Umbrella Insurance
  • Boats
  • Yachts

  • Jet Skis
  • Motor Homes
  • Mobile Homes
  • Trailers
  • Campers
  • ATVs
  • Motorcycles
  • Scooters
  • Snow Mobiles
  • Drones

Sometimes you will find cross over between personal and commercial policies but only an Insurance Agent can guide you to the right policy for what you are trying to accomplish. Take for example the individual that came to me in need of a home insurance policy for their home that also housed a reptile rescue sanctuary with employees. Apparently this did not come up in conversation with the prior agent and the insurance company was now cancelling the policy. This does not fit the typical profile of a home owners insurance policy and therefore was forced to purchase a commercial program. There is also the case of an individual purchasing a vehicle in the name of a LLC which they also use the for personal reasons. Based on the insurance companies review of the occupation of the driver and the business exposure it did not qualify for a personal auto policy and was instead covered by commercial auto insurance policy.

Insurance as a whole is not black and white. It is not one size fits all. Each situation is unique and policies are placed on a case by case basis. Sometimes the decision is the not Insurance Agent’s but the insurance company’s decision. Keep in mind your Insurance Agent is your front line person to place a policy that will respond the way you need it to at the time of a claim. Only they can help you find the best policy for your situation.