Commercial Insurance is a contract between an insurer and a business owner whose purpose is to minimize the owner's risks against losses, whether from weather, theft, vandalisation, lawsuits, accidents or any other reason.

There is a cost for this "hedge," which is referred to as a premium, so in essence, the potential for a greater (possibly devastating) loss is reduced to a smaller loss (the cost of the premium).

Any business owner benefits from commercial Insurance since it reduces the risk he may encounter . He can insure his company's assets, real estate etc. He can insure against loss of profits arising from an event which stops income etc.