Funeral directors and funeral homes are usually interchangeable terms for funeral services businesses. These businesses tend to be small, family-run businesses that offer a variety of funeral services. Some offer limited preparation and burial services, while funeral directors offer a full range of funeral services, from the preparation of remains to numerous administrative tasks.
Families of deceased persons place their trust in funeral directors during the worst of times. Funeral directors need comprehensive small business insurance to protect them from financial ruin caused by fires, weather events, injuries, and lawsuits.
One-size-fits-all business insurance is not the right answer for a funeral director. You need to work with an experienced independent insurance agent who knows your business, and who can find the right funeral director insurance from reputable insurance companies.
Why Do You Need Funeral Director Insurance?
Funeral directors coordinate and perform any and all requirements and tasks for funerals. They work with families to arrange funerals from the beginning to the end, including planning the day’s events, working with the officiant, and coordinating how and where the remains will be placed.
Funeral directors have many other responsibilities including preparing obituary notices, arranging for pallbearers, scheduling the opening and closing of a grave with a representative of the cemetery, preparing and decorating funeral sites, and ensuring the transportation of the remains, mourners, and flowers between sites.
Depending on the setup of the funeral business, funeral directors may also be involved in embalming and cremation.
Funeral directors employ a variety of equipment as they perform their tasks. From embalming equipment to caskets, casket carriers, and a variety of trailers, trucks, and vehicles, the equipment you use is valuable and can also be a danger to yourself, other employees, and even the general public.
As you serve bereaved members of the public, you face certain risks that can have a devastating impact on your financial viability. These include:
- Slips and falls
- Weather events (wind, hail, etc.)
- Fire and smoke
- Theft and vandalism
- Employee injuries
- Auto accidents involving hearses or other owned vehicles
- Lawsuits due to professional negligence
What Does Funeral Director Liability Insurance Cover?
Commercial general liability (CGL) insurance is a necessity for funeral directors. It provides coverage for costs related to third-party property damage or bodily injury that occurs on your premises, or that you cause in the course of doing your work. For example:
- A family member falls on a rug inside the funeral home while on the premises to plan a funeral
In these types of cases, your CGL policy will reimburse the injured party for medical expenses or the cost of the lost or damaged item. In addition, general liability insurance covers costs related to lawsuits, including court costs, attorney fees, and any settlements or judgments that you are required to pay. It also provides coverage for claims of advertising liability, slander, and libel.
What Does Funeral Director Property Insurance Cover?
Funeral directors also need property insurance to protect the funeral home building, as well as the contents of your building, including fixtures, furniture, office equipment, and all of the specialized equipment used in mortuary operations.
Commercial property insurance helps you replace or repair damaged or destroyed property in the event of a covered loss, such as a fire, weather event, theft, or vandalism.
You likely have a variety of unique property on your premises that must be covered, including:
- Valuable art
- Specialized equipment for embalming and corpse preparation
- Coffins and other merchandise for sale or display
Discuss with your insurance agent how to cover these items. In addition, talk to your agent about property coverage for off premises items, such as tents and chairs at cemeteries, lifts, radios, and other telecommunication equipment. These items need coverage while they are stationed off premises, as well as while they are in transit.
You must also ensure that human remains and any vessels that hold them are appropriately covered by your funeral director insurance plan.
Special Funeral Director Liability Coverage
Funeral directors may need additional liability protection in the form of endorsements to your CGL policy, or several stand-alone policies.
- Directors’ and officers’ (D&O) liability insurance: This protects specific decision-makers (e.g., a board of directors or advisory committee) from legal judgments and costs arising from certain behaviors or decisions that they make. Without this coverage, these individuals’ personal assets could be at stake if they are sued for:
- Unlawful acts
- Erroneous investment decisions
- Failure to maintain property
- Releasing confidential information
- Hiring and firing decisions
- Conflicts of interest
- Gross negligence
- Professional liability insurance: Also known as errors and omissions insurance, this is very important for funeral directors in situations where a family of a deceased person claims that you have caused them financial harm due to negligence, errors, or omissions. Consider the implications for you and your customer if you fail to deliver on a funeral contract as promised, make an error in the preparation of human remains, publish erroneous obituaries or notices, or otherwise fail to perform your professional services as promised. And even if a lawsuit is unfounded, your professional liability policy will help cover the costs to prove your case.
Do Funeral Directors Need Commercial Auto Insurance?
Driving is a huge part of your business as a funeral director. You may be responsible for a fleet of vehicles including everything from hearses to cargo vans, trucks, and even passenger cars. All of these need insurance protection for the vehicles themselves and for the drivers.
Commercial auto insurance: This provides liability, collision, comprehensive, and uninsured/underinsured motorist coverage for your commercial vehicles. Your coverage should be based on how your vehicles are used in your business and who will be driving them. If you hire or lease your business autos or if you or your employees drive personal vehicles for business purposes, you may need additional or amended coverage.
Your commercial auto insurance policy should specifically cover:
- Vehicles that your business owns
- Vehicles that your business owns, hires or leases
- All vehicles that are used for business purposes, including those that the business does not own, hire or lease (e.g., when you or your employees drive your own personal vehicles for business purposes)
Each vehicle owned by the business or used for business purposes can be listed separately on your business auto policy, with corresponding coverage for each vehicle that can differ depending on the vehicle’s characteristics and the coverage it requires.
What Other Funeral Director Insurance Policies are Needed?
In addition to basic funeral director insurance, you should discuss with your independent insurance agent the following types of insurance that you might need.
- Workers’ compensation insurance: This protects employees from the costs of work-related illnesses and injures.
- Commercial umbrella insurance: Also known as excess liability coverage, this provides supplemental liability protection beyond the limits of certain other liability policies.
- Pollution liability insurance: This may be needed if you use and dispose of certain chemicals, medical waste, or other pollutants.
- Employment practices liability insurance: This covers you if an employee sues you for discriminatory employment practices.
Work with your independent insurance agent to determine if you need coverage for:
- Money and securities
- Employee theft and crime
- Loss of refrigeration
- Property of the deceased
- Valuable papers
- Signs and glass
- Floods and earthquakes
- Sewer backup
How Much Does Funeral Director Insurance Cost?
Funeral director insurance costs will vary depending on the size of your business, the number of employees you have, and the value of your business property (buildings, art, equipment, etc.). If you have multiple locations, you’ll pay more for insurance than a funeral director with a single location. Other factors such as the crime and weather risk in your area, and more, also impact the cost of business insurance for funeral directors.
An independent agent who has experience working with funeral directors can help you decide the types and amounts of coverage you need for your business. The choices you make will determine your cost of coverage.
Find and Compare Quotes
An independent agent can work with you one-on-one to determine the types and amounts of coverage you need. Your agent can get quotes from multiple insurance companies so you can evaluate the cost and coverage options and make the best choice.
Benefits of an Independent Agent
Our agents simplify the search process for finding the right funeral director insurance. They’ll walk you through the handpicked policy options and explain the details.
Most importantly, they’ll be there for you when claim time comes. They know the ins and outs of the process and will make sure your claim is handled appropriately.
The Lowdown on Online Quotes
Online quotes can be tempting. They are fast and easy to get — but are they accurate? And are you getting quotes for the right coverage? For business owners, choosing speed over accuracy can cost you.
Online quotes can’t and don’t see the whole picture. They can omit important coverage that will leave you devastated if something unexpected happens. And they can leave out cost-saving opportunities that an agent can help you take advantage of.
Instead of getting an online quote, find an independent agent now, and get one-on-one consultation and affordable options for the best coverage for your unique needs.
TrustedChoice.com Article | Reviewed by Paul Martin
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