Commercial insurance is often a business owner’s largest expense. Because there are so many coverages available for business owners, it’s important to do your homework and not rush your purchasing decision. Some things you’ll need to consider when buying commercial insurance are what you are required to insure, what extra coverages are available and where to purchase your policies.
What is actually required will depend on the type of business you have, but here are some general guidelines to follow. First, determine if any contracts or loans you have with banks, governments vendors or anyone else require you to have certain types of insurance. Here are a few examples.
- General Liability is often required by the vendors for whom your business does work and sometimes by your state government in case they injure anyone or damage property as a result of your work.
- Workers Compensation is also required by most state governments to protect your own employees if they are injured while working for you. This is usually required when you exceed a certain number of employees.
- Property Insurance is usually required by the bank that holds your mortgage, but it can also be required by your landlord if you rent your commercial space.
- Commercial Auto Insurance is required by most state governments for businesses that operate commercial vehicles.
- Excess Liability or Commercial Umbrella policies may be required by vendors for which you do work in order to cover larger losses that may exceed some of your underlying insurance policies.
Once you’ve got an idea of what commercial insurance you are required to carry, it’s time to take a look at what other coverages my benefit your business. Let’s take a look at some of the more common ones.
- Professional Liability covers mistakes your business is sued for in relation to the services you provide. Just a sample of industries to which Professional Liability applies include lawyers, doctors, architects and printing companies.
- Employment Practices Liability protects businesses when legal action is brought against them for accusations such as Harassment, Discrimination or Wrongful Termination. While most people think this is just a “white collar” business coverage, it can actually benefit a wide variety of companies.
- Directors & Officers Liability (D&O Insurance) is used to protect a company’s officers and those who serve as board directors for allegations pertaining to their performance or duties as it relates to the company.
Now that you’re armed with some basic knowledge about what commercial insurance your company needs, it’s time to discuss these coverages with an insurance company and purchase your policies. The best way to do this is by using an independent insurance agent, who can help you find cheap commercial insurance. Here’s a couple of reasons why.
First, an independent agent can take a lot of the work out of your insurance buying process by recommending an insurance package of policies that fits your company just right. Second, an independent insurance agent typically represents multiple insurance carriers, so they can provide you with several cheap commercial insurance comparison quotes to help you make your decision.
If you like your commercial insurance cheap, there are a few factors that go into making that happen. Your commercial insurance cost is determined by the level of risk your company is exposed to and what kind of business you operate. A crabbing operation fishing in the Bering Sea is exposed to a lot more risk than a flower shop on Main Street. Your commercial insurance cost could be just a few hundred dollars or tens of thousands of dollars. In order to make your commercial insurance cheap, your exposures to risk should be minimized as much as possible. Most agents will use a commercial insurance checklist to help discover what risks your business faces and, therefore, what coverages you should consider purchasing. Below are some of the common items found on an agent’s commercial insurance checklist that will help answer the question, “How much does commercial insurance cost?”
- Type of business
- Number of employees
- Annual gross receipts
- Square footage of owned or leased property
- Claims history
- Fire protection
- Number and types of vehicles
- Driving records
- Formal written safety programs
Once an agent provides you with a commercial insurance proposal or two, you’ll want to get their help comparing them. The quotes you receive will either be for a business owners policy (BOP) or a commercial package insurance policy. BOPs usually contain more coverage in a standard policy without having to be endorsed or have a separate policy written to cover a particular exposure. While commercial package insurance is made up of separate policies that are tailored specifically to fit together by the customer with the advice and guidance of their agent. Commercial package insurance policies may contain Property, General Liability, Auto, Umbrella, Crime, and Equipment Floater coverages. Unlike BOPs, commercial package insurance is much more customizable and represents what many old school agents would call classic commercial insurance.
Buying commercial insurance doesn’t have to be as hard as you think. If you know what policies you’re required to have, understand what extra coverages are available and know the best place to buy everything, your purchasing decision can be a lot easier. To get started, fill out the form below to get a quote on commercial insurance or give us a call at 888-800-4824. We’re ready to help!