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Business Insurance Tips
No matter what type of business you run, you need business insurance in order to protect your company in the event of an accident or lawsuit. There are many different types of business insurance; the kind that you need depends on the type of business you operate and where you are located.
Business Policies to Consider
Many states, for example, require doctors and lawyers to carry professional liability insurance in the event of a malpractice suit. Regardless of the type of business you have, you need to have enough coverage to protect your company’s property, employees, and assets.
Your business might need a variety of insurance policies in order to be fully covered. These types of policies can generally be divided into the following categories: property insurance, automobile insurance, and liability insurance.
- Commercial property insurance protects your office, warehouse, factory, or other property that belongs to your business. If a fire damages your property, your insurance will pay for repair costs (less your deductible). Be advised that if you run your business out of your home, your business operations may not be covered. In that case, you may need to purchase a home office rider for your homeowner’s insurance.
- Commercial auto insurance protects your business from the financial ramifications of an accident. Even if you use no vehicles in your business other personal autos owned by you or your employees, you need commercial auto insurance. Personal auto insurance usually does not cover accidents that occur on company time.
- There are a number of different kinds of liability insurance. You will always want to look into a general liability insurance policy, which covers injury or damage that occurs on your business property or as a result of any action made by your business. If a customer falls on your front steps, your GLI will pay your court costs and their medical expenses.
Depending on your situation, you may also need (or be required to purchase) product liability insurance, professional liability insurance, or special events insurance.
If you employ workers, you are required to purchase Workers’ Compensation and other employee-specific insurances, depending on your state. Many companies offer bundle deals and business owner policies (BOP) to help reduce premiums. Be sure to read through what these policies cover to make sure you have all the protection your business needs.
You can reduce your insurance premiums by agreeing to pay a higher deductible – the amount you pay out-of-pocket for damages before the insurance company starts to pay. Be sure that you do not agree to a deductible amount that is higher than you are able to pay in an emergency. Find more reasons to purchase business insurance in our Buyer’s Guide.
Saving Money on Your Business Insurance
In 2011, Goldman Sachs increased prices for business insurance clients by 5.8%, the largest rate increase in several years (Traveler Cos). It is a good idea to contact several companies and get multiple quotes in order to find the best price for the coverage you will need. Different insurance companies offer different types of coverage, but be aware that not all policies are the same.
Save even more with the tips in our Buyer’s Guide.
Business insurance can be expensive – but a lawsuit can cost much more. A study of liability lawsuits in Texas from 1988-2004 found that the average cost to the insurer to defend a lawsuit was $35,000. When that number is broken down, auto liability claims averaged $23,000 each, while professional liability defense fees averaged $51,000 and medical professional liability reached $62,000 (“Tort Liability Litigation Costs for Commercial Claims,” American Law and Economics Review). Protect your finances and assets by making sure to purchase the right insurance in sufficient amounts. Need to get your business covered?