Your quote is based on several common factors to give you a clear picture of the cost you can expect, though an independent agent can shop around and maybe even improve your rate!
NOTE: This quote is not final, though we did work with professional actuaries to help get you a ballpark figure to get started.
In most cases, small business insurance doesn't become required by law until employees and customers become a part of the picture. Most states require unemployment coverage and workers' comp once you have a certain number of employees on the payroll. On top of that, some states also require professional liability coverage to protect customers from damage as a result of your products or services. A local independent agent can help see if your small business requires any of these coverages based on your area's legal requirements.
Simply put, because small businesses need the most help. A serious accident, lawsuit, or even fire could ruin a small business. A large company, on the other hand, is more likely to have the financial access to help recover from a messy situation. And if you're running a family business, you have a lot invested in your operations. Without the proper coverage, that legacy you may have wanted to pass down, could be ruined.
With the right blend of liability and property coverage, you can make sure your small business dreams become much, much bigger.
It's not mandatory by state law, but your business is probably required to have hazard insurance by its mortgage lender at the very least. Even if hazard insurance for your business isn't mandatory, it's a good idea to consider adding it to protect your business's assets and property from frequent risks that could be costly to pay for out of your own pocket.
A business owner's policy, or BOP, is insurance coverage designed specifically for small, or even mid-sized, businesses. A BOP combines several types of insurance coverage in a convenient package and can be customized to suit any particular business. Generally, this type of policy includes both property and liability coverages, including property claims, equipment breakdown, loss of income, libel, and more.
The cost of small business insurance varies from situation to situation. All sorts of different factors affect the cost as your perceived risk is analyzed, but generally it comes down to the coverage you need and the industry you're in. It should be obvious that a gift and stationary shop in a strip mall would pay much less than firework and propane store off the highway. But, as a ballpark, the typical cost for just liability insurance would be around $70/month, where a more comprehensive BOP is around $100 per month.
In general, forming an LLC helps protect your personal assets from being tied to your business. But even though it separates the personal and business sides of your life, you still may need more comprehensive coverage. If your products injure a customer, you'll need the right general liability coverage to protect your business assets.
When you speak to an independent agent, they'll help assess your needs and answer with the right coverage and cost for you.
Kind of. Some of your property may be covered under your home insurance, but that's still pretty limited. If you're running a home business, you'll need business equipment protection, liability coverage, potentially some cybercrime coverage, and more. You'll want to talk to an independent agent who can help you nail down the proper coverage you need, like general liability or a business owner's policy (BOP). There are plenty of options available that can give you the right amount of coverage without breaking the budget.
Depends. First, do you have employees? Second, what state do you live in? From a legal standpoint, every state has their own requirements on when workers' comp becomes necessary, but any time you have a workforce on the payroll, you should definitely protect yourself, and the employees, with workers' comp insurance.
With general liability coverage, your business will be protected from common everyday lawsuits like customer property damage, injuries, and defamation/copyright complaints. But, if you have employees, vehicles, and offer services that can harm a client if done wrong, you'll definitely need more coverage. Your independent agent can walk through your business and help identify any important liability coverage gaps and identify what you need most.
Small business insurance IS tax deductible, as long as the coverage is for the purpose of operating a business, profession, or a trade. Businesses may not deduct their insurance premiums if the coverage is for the purpose of a self-insurance reserve fund or a loss of earning insurance policy. Your tax professional will be able to help answer any tax-related questions you may have.
SMALL BUSINESS INSURANCE
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Owning your own business can be an exciting and rewarding venture, but that doesn't mean it's easy. The key to long-term success, growth, and independence is having the right protection in place. Whether it's a mom-n-pop family business, a home consulting business, or a small candle shop business, an independent agent is the answer to finding the right coverage to protect you from whatever may come, all the perfect price for your budget.
What is small business insurance?
Small business insurance is a package of coverages designed to help protect smaller businesses against lawsuits, theft, vandalism, damage, employee injuries, illnesses, and anything else that may cause a loss of income. The insurance policy will pay to repair, replace, or recover the value of whatever your business has under coverage.
Why do I need small business insurance?
Every business, big or small, needs some form of insurance. Yes, some coverages may not be required or seem relevant to you, but if an unexpected event were to cause your business to close for several months, would you be financially stable enough to continue operations? Even more, if a third party were to sue your business, would you be able to cover the cost of the lawsuit? After all, even a low-risk businesses are just as susceptible to unfortunate circumstances.
Top 10 small business claims
How is it different from standard business insurance?
Small business insurance, as you can imagine, focuses on the lighter insurance needs of small businesses. A small business typically doesn't have a massive fleet of delivery vehicles to insure, multinational liability needs, or Fortune 500 revenue to protect, just to name a few differences. Because of that, their coverage needs are much smaller, and typically require a simple policy designed for smaller needs that can be tailored to your specific industry.
Property insurance: Covers loss or damage to your equipment and inventory due to fire, storms, and other causes
General liability: Covers claims for injuries to other people
Business income insurance: Covers the loss of income if operations are interrupted
In short, a BOP is designed to cover all aspects of a small business. However, not every business is eligible. In general, the requirements include the following.
Must have 100 employees or less
Revenue is $5 million or less
Must be low risk
However, companies will most likely need coverage beyond what’s included in a BOP to meet unique risks which can be purchased through stand-alone policies.
Common standalone policies can include the following and more:
Professional liability: Covers your mistakes that cause physical or emotional injury
Employer insurance: Covers Social Security, unemployment, and workers' compensation
Commercial auto: Covers work vehicles and certain damage they may cause
Group insurance or employee benefits: Covers health, life, short-term, and long-term disability
How much does small business insurance cost?
The cost of business insurance policies depends on the coverage and a number of other factors like the size, location, and materials used in your business.
A strip mall bakery might only pay $200 a month, whereas a chainsaw-carving wood sculpture operation could pay $2,000 a month. Basically, the safer and smaller the company, the cheaper it is.
How can I save with small business insurance discounts?
For starters, combining policies and raising your deductible are two easy ways to drive down the cost. You can also get lower rates and discounts if you pay annually and increase your safety measures.
There are almost as many small business insurance discounts available as there are business insurance companies, but they can all be divided into four major types.
Safety discounts: These are applied if the insurance company sees that you take good care of your business' property with special features to help keep your assets safe. This includes installing burglar alarms, sprinklers, a high-quality roof, and so on.
Workers' compensation can be an expensive portion of your business insurance, so providing a safe environment for your employees can really save you money. That includes things like ergonomic desks and high-quality personal protective equipment.
Bundling discounts: These are discounts you can get if you buy multiple types of insurance with the same company. Say you need to insure your personal car as well as your business. If you get both with the same company, they are likely to cut you a deal.
Group discounts: These are discounts you can get based on your industry. It’s common for an insurance company to specialize in a business niche, like farms or grocery stores. That insurance company will often offer special discounts to that type of business.
Loyalty discounts: Insurers reward customers who stick around. You might also get discounts for referring friends, family, and colleagues to your insurance company.
When it comes to small business insurance discounts, they all boil down to the likelihood of a disaster or lawsuit for your business. If you operate in a risky industry, it's simply going to be harder to find discounts.
Your independent insurance agent has your answers
Whatever you need, your agent has your back. With a brief intro into the terms, discounts, and process of your small business insurance, you know the kinds of questions to be asking. Your agent will ask you all about your business, its use and your future goals to help find the perfect blend of coverage at the right cost for your budget.
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