Business Insurance - Coverage, Costs, Claims and More

Business Insurance - Coverage, Costs, Claims and More
by Arthur Williamson

Business owners are faced with multiple tasks as they see their dreams come to fruition. One non-negotiable item a small business owner must tick off is applying for business insurance. This ascertains that you will aptly conduct risk management, minimize losses, boost your credibility, and ensure that your business operations will run smoothly from day-to-day.

In essence, Business.com describes business insurance as a safety net. Due to the protections that it offers, you will also get to save money in the long term. Furthermore, business insurance includes personal and business assets.

Business News Daily says that a combination of business insurance schemes can grant you both financial and legal protection. To get started with the process, you can analyze your assets, risks, and liabilities, then decide on how comprehensive you wish to have the scope of your coverage. Compare providers so that your business insurance cost is within your budget.

Ultimately, it is business owners who call the shots on what the right insurance coverage is, and what it means to them.

Read on to learn more about business insurance coverage costs and claims and how to get them.

Types of Business Insurance

Depending on one's specific business, there are particular insurance options and coverage limits to consider.

General Liability Insurance

A general liability insurance policy is essential to every business—even small businesses and home based businesses. This kind of insurance policy will protect you, your employees, and your products and services, should any of these cause property damage or bodily injuries to a third party.

A general liability policy may also encompass medical expenses, cases revolving around slander and libel, defending lawsuits, and settlements.

Business Owner's Policy (BOP)

A BOP is for small businesses—including home-based businesses. Aside from coverage for pretty much all the required factors for every business owner, a BOP may expand to cover property, liability, crime, business interruption, and vehicle insurance.

With a BOP, you can expect to pay less. This is because you can define and edit what you wish to be included in your policy. These possible bundles offer great coverage at a lower price compared to individual coverage.

Commercial Auto Insurance

If your company requires the use of company vehicles, this kind of insurance is recommended. This insurance policy will protect the vehicles used by employees and those that carry the company's equipment and products.

A non-owned auto liability may be considered if employees use their personal vehicles for business reasons. This will protect the company should the employee in question not have their own or insufficient coverage.

Workers Compensation

Workers comp offers liability coverage for employees injured on the job. It includes medical, health, and wage benefits that differ per business location in various states. Workers comp also factors in employees who need assistance returning to work or those who have perished from work-related causes.

In some cases, workers comp rests on agreements made between employees and management. This business liability insurance policy will protect the company from civil lawsuits that could be filed from these emergencies, illnesses, or injuries.

Cyber Liability Insurance

Cyber liability insurance coverage will protect your company's sensitive data stored in cloud-based servers or hardware. As cyberattacks remain one of the nastiest threats even small businesses face, cyber liability insurance helps companies avoid huge financial losses and altered client relationships.

Commercial Truck Insurance

Commercial truck insurance has policy limits defined by primary liability and general liability insurance. The former encompasses injuries and freight or property damage caused by the truck, while the latter may pay for damage on properties where the truck was present, thus offering protection from legal cases.

Commercial Property Insurance

Regardless if your company owns or rents a space, this will make sure that a company's physical assets will be protected. Larger businesses may be higher risk, therefore this insurance coverage is a must.

Policy limits are natural disasters, smoke, fires, civil disobedience, and vandalism that occur on business property.

Professional Liability Insurance

Professional services of companies can` safeguard against from financial losses as a result of malpractice or negligence.

Product Liability Insurance

A specific business concerned with the areas of manufacturing, distribution (including wholesale), as well as retail can benefit from product liability insurance which offers risk management in case a product is defective, potentially causing harm or injury in a liability claim from customers.

What Business Insurance Covers

Business insurance covers the aforementioned areas, depending on the type of liability coverage you decide to get. However, it may be important to highlight what business insurance does not cover. Standard commercial property policies do not necessarily cover losses from certain kinds of natural disasters. They also may not cover customers' property that is kept at your business.

A liability policy may also fail to cover intentionally conducted or fraudulent acts. This is why the general liability policy you may opt for can be complemented by additional coverage riders for other risks.

The Cost of Business Insurance

The following factors may impact your insurance rates or cost of insurance.

  • The nature of your business, industry, and potential risks involved
  • Business classification
  • Business location
  • Prior losses
  • Number of years in the industry

Business insurance costs may be influenced by these points, but you may also be able to estimate how much to allocate based on the policy limit of each kind of insurance.

  • General liability insurance cost could be a median of $500 annually, but this is largely affected by the industry you belong to. The premium for general liability is partially dependent on your purchased insurance limit. For example, it could be $1 million for every occurrence, with an aggregate of $2 million.
  • Business Owners Policy can have a median of around $600, with varying premiums per industry.
  • Workers Compensation is very much dependent on the assigned classifications you have been given, as well as the rate for each of these, together with your experience modifier. You may pay a premium of $560 every year for this, but the cost could be much more.
  • Commercial auto insurance costs depend on vehicles driven and the purpose they serve, with larger trucks costing more. The median annual premium for this is around $1,700.

Making Claims with Business Insurance

Physical evidence such as photos or videos of certain events helps strengthen claims so that business owners can maximize their policies. Written reports of incidents substantiate claims, especially when these are crafted as soon as possible.

Companies should inform their insurance agent as soon as there is an accident or incident to qualify for sufficient coverage. They will ask you to prepare a claim form to be forwarded to the insurer. Insurance companies will then assign claims to adjusters who will request for the aforementioned evidence.

Repairs should also be made immediately afterwards. It is recommended that you crowdsource on repair estimates to pay less at the end of the day. Lawyers can also help you provide insurers with a claims package should there be any potential disputes. Be sure to consistently follow up with your adjuster.

Frequently Asked Questions About Business Insurance

We are always happy to entertain questions for your insurance needs. Have a look at some of our FAQ below to see if your query has been answered.

What is the average cost of business insurance?

There is no one way to estimate the cost of business insurance. However, some experts claim that the average cost for general liability is $53 per month, and workers compensation is estimated at $85 per month.

Is business insurance necessary?

Business insurance is a necessary part of every company's survival and success. It is likewise necessary even for small business owners. It gives you financial and legal protection against numerous incidents and unforeseen events.

What types of business insurance do I need?

It is always best to consult with a professional or an insurance expert to know just what kinds of policies are best for your business. Business owners usually go for a combination of several policies for optimal protection.

Additional Resources

The Hartford

The Hartford is a helpful resource for businesses who are interested in learning about all kinds of insurance.

The US Small Business Administration (SBA)

The SBA covers everything small businesses need to know about planning, launching, managing, and growing your company.

Interested in learning more about business insurance? Contact Assured Standard for more information!

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Assured Standard will protect your business with the right insurance, depending on your needs. Now more than ever, it’s crucial to have the right general liability insurance experts on your side. Protecting the future of your business starts today.
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