Insurance, in its many forms, is one of the basic costs associated with running a business and a potentially valuable form of protection for private individuals and families. The first step when shopping for insurance is determining what type of coverage you need and how much you can afford to spend, which may lead you to consider stand-alone insurance.
Definition
Stand-alone insurance refers to an insurance product that a business or individual purchases to cover a specific risk or cost. It is the opposite of an insurance policy with broad coverage that applies to a number of risks in different scenarios. For example, a standard homeowner's insurance policy covers most common sources of damage, including fire, wind and hail. However, homeowners who live in earthquake-prone regions can purchase stand-alone earthquake insurance to cover their homes in the event of that specific event.
Types
Stand-alone insurance is available from commercial insurance companies for individual and business customers. It can cover property, such as a home, automobile or business facility. It can also provide coverage for liability, paying for the customer's legal responsibility during and following lawsuits. Other types of stand-alone insurance cover loans, investments and intangible business assets. Some of the things that stand-alone insurance can cover also fall within comprehensive insurance policies, giving customers choices between stand-alone and traditional insurance options.
Uses
Insurance customers can choose stand-alone insurance for a number of reasons. One is to augment an existing insurance policy by adding coverage for additional risks, as in the case of a homeowner purchasing earthquake or flood insurance. In other cases, stand-alone insurance represents an option to buy only the coverage you need without paying more for a policy that covers risks you're not concerned about.
Considerations
The decision of whether to buy stand-alone insurance depends on what type of insurance a customer already has and how much it risks losing without a stand-alone insurance policy versus the cost of that policy. Stand-alone insurance gives customers opportunities to insure against special risks that are unique to them. For example, a business that frequently sends it workers to other cities can purchase group travel insurance to cover the cost of flight and hotel cancellations, which would be unnecessary for a business that doesn't use travel in its operations.