Business

Biz Blogs: How Much Does Business Insurance Cost?

You’re almost ready to open your company for business. You’ve hired employees, got it registered, and received your EIN from the IRS.

Before you start taking in customers, it’s important to buy insurance. It’s tempting to opt-out because of the expense. It’s hard for some small business owners to afford it.

Getting sued because a customer tripped over something at your store will be much harder on the wallet, however. In comparison, business insurance isn’t so bad.

We can tell you exactly what numbers you can expect. Check out this business calculator to learn how much you’ll spend each month to insure your company.

General Estimate 

The main insurance policies that business owners need are liability, workers’ comp, and professional liability. The cheapest policy that you can open is general liability. It will run you anywhere between 57-65 dollars a month.

Workers’ comp will protect you if one of your employees gets hurt on the job, and it’s required in most states. You can expect to spend about 80 bucks a month on it.

Even if you know the ins and outs of your field, accidents happen. Professional liability insurance will cover you for these little accidents. You’ll spend around the same amount for it that you would general liability insurance.

Factors That Go Into Cost 

All the numbers we’ve given you above can be skewed by a number of factors. Depending on what kind of company you run, you may need to open additional policies.

For example, if you’re a cleaning business that drives from client to client, you’ll need commercial auto insurance to cover your company vehicle. Your employee count and risk exposure will also play into how much you pay.

Profession

Not all types of businesses have the same amount of risk involved. For example, roofing involves a lot of intense labor. The employees also end up working with dangerous tools.

Roofing companies need professional liability insurance in case something goes wrong with a job. There are no areas where you can cut corners.

On the flip side of this, a personal accountant would need professional liability insurance, but they can get by with a cheaper workers’ comp and general liability package. This is because there aren’t that many risks involved. An accountant doesn’t work with heavy machinery or climb on top of tall objects.

Your Employee Count

Companies that have several employees can expect to pay more for insurance than those that don’t. If you don’t have any at all, you won’t need worker’s compensation insurance.

Employees also carry an added risk factor. Again, accidents happen, and many times, these accidents result in some kind of claim. You’ll need coverage to account for this.

Risk Exposure

Employees are only one risk that your business faces. If you offer high-priced services or handle confidential customer data on a normal basis, you’ll need to pay more for liability insurance.

The more sales that your company generates, the more customers you see. The more customers you see, the greater your risk for a claim becomes.

How to Save Money on Business Insurance?

The good news is that there are plenty of ways to shave some money off your business insurance cost. You can bundle your policies.

Saving is also a matter of understanding your risks and staying on top of them. You should also try shopping around and when all else fails, talk to an expert.

Shoot for a Bundle 

If you want to save a little money, you can shoot for a business owner’s policy. It bundles together your business income, liability, and commercial property insurance. It’s much cheaper than buying separate policies for each. You may spend about a hundred dollars a month on it.

Risk Management 

When it comes to saving money on insurance, the safer you are, the better. If you can identify your hazards, and stop them in their tracks, you won’t have to spend as much on coverage.

To this end, you need to come up with a killer risk management strategy. Talk to your employees about it and train them on how to follow along with it.

Pay Upfront 

Some insurance companies will give you a nice discount if you pay your premiums upfront instead of doing it on a month-by-month basis. You’ll still be dropping a lot of money all at once, but it can be worth it in the long run.

Do a Little Shopping Around

You don’t have to go with the first insurance company that offers you a good deal. Take some time to shop around a little. Remember that getting an estimate doesn’t lock you into anything.

Don’t forget to ask about the services that the company provides. The insurance costs might be cheaper, but it’s not going to help you much if it doesn’t cover everything you need it to cover.

Talk to an Expert 

The last piece of money-saving advice we have for you is to talk to a Business Insurance Agency. They can walk you through all the paperwork and help you find the best deal.

Independent agents work with companies from all over, so they’ll have a few different policies that they can show you. Once you find a plan that you like, they’ll help you purchase it.

Your Insurance Cost Calculator 

You can’t open a business until you purchase proper small business insurance. Not having it can put your entire company in jeopardy on the off chance that someone sues you for damages. Don’t let yourself get caught off guard.

Having insurance is only one important aspect of running a company. For more tips that will help you keep your doors open, visit the business section of our blog.

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