When starting a business, location, supply chain roadblocks, and staffing concerns will probably dominate your thinking. Insurance might not be top of mind, but it's one of the most critical items you need to consider. Business insurance covers various risks, including property damage, liability, and employee injuries. The cost of business insurance varies on the size and type of your business and the level of coverage you choose.
For instance, a retail store may have smaller overhead costs and, therefore, may pay less for its coverage. On the other hand, a construction company with numerous employees and commercial equipment may spend more money annually for added coverage like trucking insurance.
The insurance coverage needed for running a business depends on the industry and the company's size. Typical forms of business insurance include general liability, property coverage, business owners' policy, workers' compensation, and cyber liability.
General Liability Insurance is necessary for all businesses to protect against third-party claims of bodily injury, personal injury, or damage to one's property. General Liability protects businesses from lawsuits or claims by covering any legal fees and settlements that may occur.
A Business Owner' Policy (BOP) combines property coverage and liability into one policy. It is typically used by small to mid-size businesses with a low risk of property damage or injury.
Workers' compensation is insurance coverage that protects businesses from legal liability for employee injuries or illnesses on the job. This insurance coverage covers medical expenses and lost wages for employees unable to work due to injury or disease.
Cyber Liability Insurance coverage protects small and large businesses against any losses resulting from a data breach and cyber-attacks. This insurance covers costs such as notifying customers about a breach, repairing business after a cyberattack, credit monitoring for affected individuals, and legal fees.
The type of business and industry play a role in determining the cost of insurance. Industries with higher risks, such as construction or manufacturing, will likely pay more for coverage than industries like consulting or accounting firms that typically are lower risk.
Location can also affect the cost of business insurance. Businesses in areas with too much traffic or high crime rates may pay more for general liability and property coverage.
The number of employees also impacts the cost of insurance, particularly workers' compensation insurance. More employees mean a higher risk for injury or illness, leading to higher premiums for coverage.
It is essential to consider factors like occupation, location, and the number of employees when selecting the type of business insurance and to determine the average cost. While it may be tempting to skimp on insurance coverage to save money, it is crucial to consider the potential risks and consequences that can occur without proper coverage. Let one of our insurance specialists here at Hotchkiss Insurance review your business needs, and we’ll find the right coverage for you.