You’ve had an idea brewing for years. You’ve gathered support, done your research, amassed assets and are finally ready to start up your business. But before you can jump in, it’s important to consider the dangers that each company faces and how to safeguard your business against them.
Liability is a huge threat to any business. Most businesses have some sort of customer or client. General liability insurance for commercial purposes helps provide compensation if bodily injury or property damage occurs to a third party due to your business’ operations. For example, if a customer slips and breaks their hip in your restaurant, they may want to sue. Liability insurance helps pay for their medical needs and legal fees that may arise.
If your business has a physical property, you will also need commercial property insurance. Commercial property insurance provides compensation if the physical structure if the business is damaged or loss due to fire, lightning, smoke, wind, theft, vandalism and more.
How Much is Business Insurance?
It’s reasonable for small business owners to worry about insurance being too expensive. Thankfully, there are ways to make business insurance more affordable. After all, a monthly premium for invaluable insurance is worth it when compared to an expensive lawsuit able to drain all your company’s assets.
One way you can save on liability and property insurance is to bundle it into a business owner’s policy, also known as a BOP. This policy covers both general liability and property insurance at a smaller price than purchasing both individually. It’s geared toward small, low-risk businesses. The cost of a BOP varies widely depending on a variety of factors, including the size of your business, your credit and the policy’s limits. On average, however, a small business pays around $1,200 a year for a BOP.
Is Business Insurance Required?
Some business insurance is required by state depending on the type of insurance and the industry of your business. Property and liability insurance isn’t always required by the state, but may be required by a lender. Insurance coverage consistently required by states for business owners includes:
- Commercial Auto Insurance: If your business will own or operate vehicles for work purposes, you’ll need commercial auto insurance. This insurance includes comprehensive, collision, liability coverage and more.
- Workers Compensation: If you hire employees, you’ll need workers compensation insurance to help pay for medical bills in case an employee is injured on the job.
Also Read: Unconventional Commercial Insurance Patterns