Business insurance can protect against unexpected incidents that threaten the success of your enterprise, although costs for different forms of coverage vary significantly.
Insurance providers take past accidents and claims into consideration when setting premium rates, so starting a newer business will usually incur higher premiums than established ones with clean histories.
Some businesses choose to combine general liability and commercial property insurance in order to save money, while others add professional liability, errors & omissions and cyber liability policies for added protection.
Cost
General liability insurance provides protection for your business should an accident damage someone else’s property. While costs for this coverage vary between companies, most small businesses can expect to pay around $40 each month on average for general liability policies – this money could go toward getting nails done, satisfying sushi cravings or purchasing gym memberships!
Liability insurance costs will depend on several factors, including type of industry, location and size of business. Each business industry poses different risks; for instance, financial consultants typically do not experience as much foot traffic than retailers do and thus have less chance of an accident occurring. Furthermore, the larger a business becomes, the more potential accidents there is for it to occur.
Saving on premiums can also be done by selecting higher deductibles or smaller coverage limits, or opting to pay their annual premium in one lump sum instead of monthly installments.
Most states mandate small business owners purchase additional policies beyond general liability coverage to protect themselves and their business, such as workers’ compensation insurance for any employees they employ and commercial auto coverage for vehicles owned. Although these add costs to any liability policy, these measures must be put in place in order to secure your enterprise and remain compliant.
Your insurance needs can change over time, so it’s essential that you regularly review and adjust your policy as necessary. For instance, if your employees or location shift, make sure your policy reflects these adjustments; similarly if expanding services or closing down locations requires changes be made to account for these adjustments.
Are You Seeking Ways to Lower Liability Insurance Premiums? Consider Investing In a Business Owner’s Policy (BOP). A BOP provides businesses with less than 100 employees and revenues under $1 Million the ability to reduce liability insurance costs while keeping all necessary policies covered under one policy package.
Coverage
Liability insurance protects businesses against damages they might be held accountable for, such as bodily injuries and property damages to third-party trespassers as well as legal costs if sued for personal injury or false advertising claims. Contracts often stipulate having liability coverage so it’s wise to review your policy regularly to make sure you have appropriate protection in place.
Commercial general liability (CGL) policies typically provide coverage against four different events: bodily injury, property damage, personal injury (such as slander and libel), and false or misleading information. Bodily injury coverage is of particular significance if one of your customer becomes injured as a result of your business operations; this helps pay medical expenses and legal fees associated with that incident; workers’ compensation insurance will cover them instead.
Property damage coverage provides for repair or replacement costs if third-party belongings are damaged by your operations, or to help cover cleanup expenses after disasters such as flooding. A comprehensive CGL policy is crucially necessary as even minor incidents can cost thousands.
Professional liability coverage protects businesses against financial costs associated with errors or mistakes committed by their employees in providing services to customers, such as incorrect work performed, bad advice given or failure to perform as required.
Other types of liability insurance policies that could protect your business include crime, fidelity and director and officer liability coverages. These can protect against theft and property damage as well as employee embezzlement of company funds. Umbrella liability policies cover additional liabilities when the limits of other policies have been exhausted.
Liability insurance does not cover damage to your own property, which would fall under commercial property coverage, nor worker injuries covered by workers’ compensation insurance policies. You can often add these policies for discounted rates – if unsure which policies best fit with your business needs a local independent agent can assist in making recommendations.
Limits
Limits play an integral part in how much liability insurance costs. You should ensure you have adequate protection should a lawsuit be brought against your business; even one claim can cost thousands, leading to lost revenues or even closure if the court rules against you.
Your insurance needs depend on your industry. For instance, businesses operating in hazardous conditions may require greater coverage than office businesses. Therefore, it is wise to discuss your specific needs with an agent to find an ideal amount of coverage.
General liability coverage typically costs less than other forms of business insurance policies, depending on factors like your industry, number of employees and sales volume for the year. Established businesses tend to pay less; those with more assets and longer histories usually incur lesser costs than smaller newcomers.
Errors and omissions (E&O) insurance provides protection from lawsuits alleging your business failed to perform its duties or provided inaccurate information, often included within general liability policies. According to Insureon, on average small businesses pay $61 monthly or $732 annually for this coverage.
Commercial umbrella insurance can protect your business against costly liabilities. The cost varies based on its risks, such as customer volume and whether or not it operates from storefront locations. It is vitally important that any changes that could impact on this coverage be communicated promptly to keep costs under control and make informed decisions about protecting assets in an economical way.
Saving money on business insurance is simple by purchasing multiple policies from one provider. For instance, purchasing both commercial auto and general liability coverage under one policy owner’s policy could save money; or getting separate policies may help lower rates since multiple payments cover similar risks more efficiently.
Exclusions
Liability insurance costs depend on numerous factors, including your industry, building size, number of employees and your claims history. Frequent or costly claims may make insurers consider your business high-risk and increase premiums accordingly.
Liability insurance protects your business in the event of lawsuits related to bodily injury, property damage, copyright infringement and slander claims. It may also cover medical expenses for third-party visitors injured on your premises. However, your business should be mindful of certain exclusions that could prevent some or all of its costs being claimed back from insurance providers.
One of the most frequent exclusions is coverage for accidents caused by your own vehicles, including rental cars, personal cars and those owned by employees. However, if your company rents vehicles or uses them for deliveries or pickups then additional coverage should be purchased for these vehicles. Another key exclusion involves injuries sustained while engaging in illegal activities; this typically includes drug manufacturing/trafficking as well as prostitution/gambling damage claims not covered under general policy policies.
Other key exclusions include business risk and work product coverage. With regard to business risk coverage, any damages caused by defective work or products – repairs, replacements and economic loss are specifically excluded as damages caused by defective workmanship; repairs and replacement costs do not count towards coverage however; natural disaster damage costs remain covered along with catastrophic loss expenses; additionally the work product exclusion does not apply when fulfilling indemnity obligations under an insured contract.
Liability insurance is a necessary component of running any small business. To select the ideal policy for you, get quotes from multiple providers before making your choice. A Business Owner’s Policy (BOP) combines protection for general and commercial property in one policy, saving both time and money; plus it allows you to customize it to meet specific business needs.