Self-Employed Business Insurance Policy Information
Self-Employed Business Insurance. More and more people are turning to self-employment to meet their career goals, but being self-employed does not protect them from the potential risks they face in their jobs - risks that can open the door to liability and financial ruin. It also does not afford for the employee the same types of insurance coverages otherwise enjoyed in the traditional workplace.
Self-employment offers both freedom and flexibility, and self-employed insurance can ensure that you are protected from general liability and specific perils that are common in your line of work. Self employed businesses should consider liability self-employed insurance coverage.
This type of coverage protects your assets from being seized in the event a major lawsuit against you results in a big award.
Self-employed business insurance protects you from lawsuits with rates as low as $27/mo. Get a fast quote and your certificate of insurance now.
Below are some answers to commonly asked self-employed business insurance questions:
- How Much Does Self-Employed Business Insurance Cost?
- Why Do Self-Employed Business Owners Need Insurance?
How Much Does Self-Employed Business Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small self-employed businesses ranges from $27 to $49 per month based on industry, location, size, payroll, sales and experience.
Why Do Self-Employed Business Owners Need Insurance?
For most small business owners, the business is their primary livelihood - their bread and butter, whether they are just starting, or planning on opening up more locations.
Self-employment insurance is a type of insurance plan that meets the coverage requirements of your particular business structure. The reason that it is important is that it protects your business from claims of liability from customers, clients, and others.
Many self-employed people do not feel a need to be out the cost of insurance coverage for themselves and their businesses. The need for insurance for the self-employed is usually profession-specific, but all businesses should consider some type of coverage.
Without this type of insurance, the business and the personal finances of the self-employed are at risk in a litigious society.
Claims of liability range from damage you cause to someone's property while you are on the job to claims against you from someone who becomes injured on your property.
Providing substandard work may leave you in breach of a legal contract, opening you up to claims, or your business may be burglarized, causing you a loss of assets. All of these situations are reasons for businesses to buy effective policies that guard against known and potential perils.
Self-Employed Business Information
Around 15.3 million Americans reported being self-employed in 2009, and that number is only poised to rise. This amounts to around one out of nine U.S. workers on the self-employed tally. Construction, service industries, and agriculture are top fields for the self-employed.
While taking the reins of self-employment can be quite liberating, the fact is that you also sacrifice some of the benefits that you might otherwise enjoy if you worked in the traditional job market.
Self-employed people are responsible for obtaining their own health insurance. Under the Affordable Care Act, or ACA, all Americans must purchase health insurance policies and maintain them - or face a stiff tax penalty if they do not.
This includes the self-employed. Unless you are in receipt of health insurance coverage from a spouse or a parent, then you must find your own health insurance in order to comply with the law and also to ensure that you have coverage if you fall ill or become injured.
In addition, self-employed people in should seek out other types of insurance that is normally obtained through an employer, such as disability insurance. This is a very important type of insurance for all workers, although many do not realize it until it is too late and they are in need of it.
A debilitating illness or a major accident can leave you unable to perform the duties of your job. Protecting yourself with disability self-employment insurance can help you maintain some income if you find yourself in a position that you are not able to make money.
Self-Employment Insurance Information
You can opt to go for a limited liability corporation filing, or LLC, for some protection. Although there are some tax consequences for structuring your self-employment as an LLC, it can also prevent you from needing to file bankruptcy should your business end up on the receiving end of a liability claim.
A commercial self-employment insurance policy can provide liability coverage to protect your business from liability, whether you are structured as an LLC or not.
You should also consider life insurance, especially if you have family that depends on your income. Many self-employed individuals buy their own life insurance policies to ensure that should something happen to them, their loved ones have a stream of income and enough money to cover final expenses.
In addition, a retirement plan for self-employed persons is important. In the working world, you would likely have access to a 401(k) plan from your employer. If you're self-employed, you can create your own plan that's customized to your goals, whether that's an individual retirement account or other type of investment structure.
Self-Employed Business Insurance - The Bottom Line
The cost of self-employment insurance is negligible in comparison to the financial fallout just one claims against your business might cause. Finding a policy tailored to your business' potential risks is as easy as discussing your situation in depth with a seasoned insurance agent. As a general rule, the lower your risk of liability, the more affordable the policy.
Types Of Small Business Insurance - Requirements & Regulations
Perhaps you have the next great idea for a product or service that you know will appeal to your local area. If you've got a business, you've got risks. Unexpected events and lawsuits can wipe out a business quickly, wasting all the time and money you've invested.
Operating a business is challenging enough without having to worry about suffering a significant financial loss due to unforeseen and unplanned circumstances. Small business insurance can protect your company from some of the more common losses experienced by business owners, such as property damage, business interruption, theft, liability, and employee injury.
Purchasing the appropriate commercial insurance coverage can make the difference between going out of business after a loss or recovering with minimal business interruption and financial impairment to your company's operations.
Insurance is so important to proper business function that both federal governments and state governments require companies to carry certain types. Thus, being properly insured also helps you protect your company by protecting it from government fines and penalties.
Small Business Insurance Information
In the business world, there are many risks faced by company's every day. The best way that business owners can protect themselves from these perils is by carrying the right insurance coverage.
The The National Association of Insurance Commissioners (NAIC) is the U.S. standard-setting and regulatory support organization. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer review, and coordinate their regulatory oversight.
Commercial insurance is particularly important for small business owners, as they stand to lose a lot more. Should a situation arise - a lawsuit, property damage, theft, etc. - small business owners could end up facing serious financial turmoil.
According to the SBA, having the right insurance plan in place can help you avoid major pitfalls. Your business insurance should offer coverage for all of your assets. It should also include liability and casual coverage.
Types Of Small Business Insurance
Choosing the right type of coverage is absolutely vital. You've got plenty of options. Some you'll need. Some you won't. You should know what's available. Once you look over your options you'll need to conduct a thorough risk assessment. As you evaluate each type of insurance, ask yourself:
- What type of business am I running?
- What are common risks associated with this industry?
- Does this type of insurance cover a situation that could feasibly arise during the normal course of doing business?
- Does my state require me to carry this type of insurance?
- Does my lender or do any of my investors require me to carry this type of policy?
A licensed insurance agent or broker in your state can help you determine what kinds of coverages are prudent for your business types. If you find one licensed to sell multiple policies from multiple companies (independent agents) that person can often help you get the best insurance rates, too. Following is some information on some of the most common small business insurance policies:
|Business Insurance Policy Type||What Is Covered?|
|General Liability Insurance||What is covered under commercial general liability insurance? It steps in to pay claims when you lose a lawsuit with an injured customer, employee, or vendor. The injury could be physical, or it could be a financial loss based on advertising practices.|
|Workers Compensation Insurance||What is covered under workers compensation insurance? This type of insurance protects a business and its owner(s) from claims by employees who suffer a work-related injury, illness or disease. Workers comp typically provides the injured employee with benefits to cover medical expenses, a portion of his/her lost wages, rehabilitation costs if applicable, and permanent partial or permanent total disability.|
|Product Liability Insurance||What is covered under product liability insurance? I pays an injured party's settlement or lawsuit claim arising from a defective product. These are usually caused by design defects, manufacturing defects, or a failure to provide adequate warning or instructions as to how to safely use the product.|
|Commercial Property Insurance||What is covered under business property insurance? General liability policies don't cover damages to your business property. That's what commercial property insurance is for. It protects all of the physical parts of your business: your building, your inventory, and your equipment, giving you the funds you need to replace them in the event of a disaster. If you work from home, you might consider a Home Based Business Insurance policy instead.|
|Business Owners Policy (BOP)||What is covered under a business owners policy (BOP)? This is a policy designed for small, low-risk businesses. It simplifies the basic insurance purchase process by combining general liability policies with business income and commercial property insurance.|
|Commercial Auto Insurance||What is covered under business auto insurance? This type of insurance covers automobiles being used for business purposes. This could include a fleet of business-only vehicles or a single company car. In some cases it might cover your car or your employee's car while they're being used for business. These policies have much higher limits, ensuring you can cover your costs if one of these vehicles gets into an accident.|
|Commercial Umbrella Policies||What is covered under commercial umbrella insurance? This type of policy is a sort of "gap" insurance. It covers your liability in the event that a court verdict or settlement exceeds your general liability policy limits.|
|Liquor Liability Insurance||What is covered under liquor liability insurance? It covers bodily injury or property damage caused by an intoxicated person who was served liquor by the policy holder.|
|Professional Liability (Errors & Omissions)||What is covered under professional liability insurance? This type of business insurance is also known as malpractice oe E&O. It covers the damages that can arise from major mistakes, especially in high-stakes professions where mistakes can be devastating.|
|Surety Bond||What is covered under surety bonds? Bonding is a contract where one party, the SURETY (who assures the obligee that the principal can perform the task), guarantees the performance of certain obligations of a second party, the PRINCIPAL (the contractor or business who will perform the contractual obligation), to a third party, the OBLIGEE (the project owner who is the recipient of an obligation).|
Who Needs General Liability Insurance? - Virtually every business. A single lawsuit or settlement could bankrupt your business five times over. You might also need this policy to win business. Many companies and government agencies won't do business with your company until you can produce proof that you've obtained one of these policies.
Business Insurance Required by Law
If you have any employees most states will require you to carry worker's compensation and unemployment insurance. Some states require you to insure yourself even if you are the only employee working in the business.
Your insurance agent can help you check applicable state laws so you can bring your business into compliance.
Other Types Of Small Business Insurance
There are dozens of other, more specialized forms of small business insurance capable of covering specific problems and risks. These forms of insurance include:
- Business Interruption Insurance
- Commercial Flood Insurance
- Contractor's Insurance
- Cyber Liability
- Data Breach
- Directors and Officers
- Employment Practices Liability
- Environmental or Pollution Liability
- Management Liability
- Sexual Misconduct Liability
Whether you need any or all of these policies will depend on the results of your risk assessment. For example, you probably don't need an environmental or pollution policy if you're running an IT company out of a leased office, but you would need data breach and cyber liability policies to fully protect your business.
Also learn about small business insurance requirements for general liability, business property, commercial auto & workers compensation including small business commercial insurance costs. Call us (855) 767-7828.
Additional Resources For Small Business Insurance
Protect your company and employees with the right commercial insurance policies. Read informative articles on small business insurance coverages - and how they can help shield your company from legal liabilities.
- Small Business
- Business General Liability
- Business Interruption
- Business Liability
- Business Owners Policy (BOP)
- Certificate of Insurance
- Commercial Auto
- Commercial Crime
- Commercial Package Policy
- Commercial Umbrella
- Comprehensive General Liability
- Directors and Officers Liability
- Cyber Liability
- Employment Practices Liability
- Event Cancellation
- Fiduciary Liability
- General Liability
- Home Based Business
- Independent Contractor
- Liability Insurance Certificate
- Liability Insurance
- Ocean Marine
- Professional Liability
Your small business faces many potential disasters including: fire, floods, theft, equipment breakdown, lawsuits from clients or customers and current & former employees. Any many other risks you haven't even thought about.
A small business commercial insurance program should provide protection for both larger and smaller disasters. The obvious things like fire, flood and theft most business owners think about... but what if a hacker infects your computers with a virus - and files containing private customer information like credit card and Social Security numbers are stolen?
Who is going to pay to fix your customers credit rating etc...? Will your insurance pay for the cost? You need to know that.
Your commercial insurance program should cover events that can close down your company, or cause it to lose revenue. Anything less than that is not enough coverage. Commmercial insurance doesn't cover everything, and all policies have exclusions and limits.
You need a written plan that allows you to get your operations back up and running as quick as possible.