Business liability insurance covers damage that your business is responsible for to third-parties. However, this does not extend to injury to employees covered by workers’ compensation insurance or damage to your own property covered by commercial property insurance policies.
Cost of business liability insurance varies by industry and location, with businesses in higher-risk industries paying more. Opting for higher coverage limits with annual payments can significantly decrease your costs.
Costs
Cost of business liability insurance depends on the policy type you select and many variables such as industry, annual revenue, employee numbers and claims history can affect costs significantly. Additional considerations include adding endorsements or increasing annual coverage limits or deductibles as needed – an insurance agent experienced in commercial policies can be of great assistance in helping to select suitable coverages for your company.
State requirements may require certain types of small businesses to purchase certain coverages. Workers’ compensation insurance is often required for businesses with employees and commercial auto coverage may be needed for those using company vehicles. Your location also plays a factor when setting premium costs; premiums could increase significantly if your business operates in high-risk environments or uses potentially harmful equipment.
Implement and enforce workplace safety measures to lower business insurance costs and premiums. Implement loss control programs such as employee training, risk assessments, and equipment maintenance protocols in your workplace to lower your e-mod score (the insurer’s rating of your claim experience), which in turn results in reduced premiums.
For the lowest cost business liability insurance policy, consider purchasing a Business Owners Policy (BOP). This package combines general and property coverages into one plan at lower rates than purchasing them individually; making the BOP an ideal solution for small or mid-sized businesses, especially those with employees and property, offering extra protection such as business interruption and crime coverages.
Coverages
Business liability insurance provides cover for legal costs and judgments associated with property damage, bodily injury or wrongful death caused by your company. Additionally, it can cover lost income and medical expenses following workplace injuries for your employees. Your small business may need protection from catastrophic financial losses. Professional liability coverage provides extra peace of mind in case claims of malpractice, error or omission arise in their work. You can purchase this coverage in increments of $1 million to safeguard it against possible catastrophic financial losses. Purchase this coverage either alone or as part of a combined policy. Additional types of business insurance include commercial auto and property policies to cover injuries sustained from company-owned vehicles and replace or repair company inventory and equipment; real estate agents and dentists require liquor liability coverage in order to meet licensing requirements; most states mandate workers’ compensation insurance to protect employees in case they sustain injuries on the job.
Find the appropriate business liability insurance by comparing quotes from top U.S. insurers online. NerdWallet editors use a scoring system that incorporates coverage options, customer experience, customizability and cost when ranking companies.
Your business insurance options also include product liability protection to cover the products or services that you sell or provide; garage liability to cover accidents in your facilities; directors & officers (D&O) coverage to guard against risks related to running the company; as well as directors & officers (D&O) cover against risks involved with running it. Most policies can be purchased individually or as a package known as business owners’ policies for smaller firms and commercial package policies for larger ones – some insurers even provide discounts when you bundle multiple policies together! Furthermore, business interruption insurance adds extra protection against loss due to natural disaster.
Limits
There are two primary limits in any business liability policy: per-occurrence and aggregate. The former refers to the maximum amount your insurer will cover per incident; while aggregate refers to maximum payout total across a policy period (usually one year). Most small businesses choose coverage levels of $1 million per occurrence and $2 million aggregate as ideal general liability options.
Business umbrella policies offer additional coverage against property damage and bodily injury claims; copyright infringement; reputational harm; legal fees/settlement costs that could accumulate to several thousands of dollars; as well as helping with settlement expenses should a lawsuit or accident arise that exceeds coverage limits. By choosing appropriate coverage limits for these policies, they could help save your business from bankruptcy in case of costly litigation or accidents.
Cost of business liability policies varies significantly based on coverage limits selected and type of company. A law firm or medical office will require higher coverage limits than retail stores; while smaller firms often select lower limits to keep premium costs as low as possible. No matter their industry or nature of operation, comprehensive business liability coverage is an essential means of protection from potential liabilities.
If you require higher limits than what are provided by standard business liability policies, purchasing a commercial umbrella insurance policy might be the way to go. This coverage typically sits atop existing liability policies like general and automobile policies to offer extra protection in cases of unusually large losses such as when patient medical bills exceed your general policy’s limit; and can even provide protection for products completed and professional liabilities like libel or slander claims.
Deductibles
Deductibles provide businesses with a way to manage their insurance costs. Selecting a higher deductible can lower annual premiums; however, care must be taken not to overestimate its risks; should something go wrong, a high deductible could cost your company too much and prevent it from covering a large loss.
Deductible options differ according to both insurance providers and policies, including flat and percentage-based deductibles, respectively. Furthermore, some policies require separate deductibles for different losses or incidents such as fire losses versus theft or storm-related claims.
Businesses require several forms of insurance coverage in order to protect themselves against third-party claims and property damage, including legal defense costs for bodily injury claims and property damage, copyright infringement claims, slander suits or false advertising lawsuits as well as medical bills incurred on business premises. Business liability policies help shield them from these costs as well as help cover medical expenses of anyone injured while on your premises.
Cost of business insurance depends on its type and perceived risks; for instance, construction businesses with costly equipment or restaurants with significant customer interactions will likely require more costly protection plans than those operating remotely from home such as computer consultancy firms.
An independent insurance agent or broker is the ideal way to determine the cost of business insurance. They will discuss your specific business needs and find coverage at a competitive price; additionally they may suggest additional policies which might meet these specific coverage needs; some can be combined into one Business Owners Policy while others may need to be purchased individually.
Policy duration
Selecting the ideal policy duration is of paramount importance to ensuring optimal coverage at an acceptable cost. A $1 million liability policy might suffice for some businesses; others might need more. When selecting your term length, take into consideration your business’s projected lifespan – policies with 1-10-20-30 year terms are often available, though longer ones usually cost more.
Liability insurance is often required by leasing companies and contracts, providing protection from costly lawsuits while showing your ability to cover damages and losses. The exact cost of liability coverage depends on a number of factors including industry risks as perceived by industry stakeholders as well as company claims history.
Some types of business insurance can help businesses reduce litigation costs, including directors and officers liability (D&O) insurance, garage liability coverage and cyber liability coverage. These additional coverages may be included within your general liability policy or require separate policies to provide sufficient protection.
Other types of business insurance exist to mitigate common risks, including commercial property coverage for buildings and equipment and business interruption insurance that covers any lost income if disaster strikes your company. You can purchase these policies individually, or as part of a Business Owner’s Policy (BOP) for small companies or a Commercial Package Policy for larger ones – BOPs offer convenient all-in-one solutions that may be more cost effective than purchasing coverage individually.
