Best Insurance Info on the Web

After months of planning your tangible costs such as inventory, estimated payroll, rent, and advertising, your business ideas are ready to be put into action. However, a common oversight by startup businesses is overlooking expenses that can incur in the future, some of which could be enough to cause significant financial loss or even bankruptcy. That common mistake is not having a proper business insurance plan in place. These types of insurance policies are designed to protect business owners in the case of an unexpected event. Here are the eight basic types of Commercial Insurance every startup company may need.

Insurance Coverages Every Startup Needs To Consider These

Before launching your startup, take some time to evaluate your business risks. Play out any possible scenarios or situations in your people, process, and premise. Assess those risks that can take place and evaluate them alongside our top eight business insurance coverages that you should consider when protecting yourself and your company.

1. General Liability

In today’s litigation-happy world, every startup business should carry General Liability Insurance. The ballpark range of $500 – $2,000 a year may not seem so high when you compare it to the cost of a liability suit, which can reach up to $1 million. In fact, litigation costs small U.S. businesses $105 billion every year. General Liability Insurance protects your business against lawsuits arising from bodily injury, property damage, personal injury, injury to a third party, and other accidents that commonly occur in the workplace. It also helps cover related legal expenses needed to contest these lawsuits.

• Average Cost: $90 per month

2. Commercial Property

If your business has any physical presence, such as a storefront, or storage facility, or your garage is full of inventory, you’ll want to consider Commercial Property Insurance. It’s like homeowner’s insurance for your business, and it would cover damage or losses to your physical property due to things like fire and theft. This type of insurance will reimburse you for the cost of repairs or replacement, and as lost income.

• Average Cost: $125 per month

3. Business Income

As you know, business startups fail often, and this insurance helps prevent that. Business Income Insurance also called Business Interruption Insurance, financially protects you if your operations must be suspended from a covered disaster or situation. This insurance can reimburse you the cost of rent, business income, or payroll even if you aren’t currently bringing in any revenue.

• Average Cost: $40 – $130 per month

4. Commercial Auto

Just like commercial property policies can be considered “homeowner’s insurance for your company,” Commercial Auto Insurance acts like your personal automobile coverage for your business vehicles. The policy can also apply to your personal vehicle if used as part of your business operation, such as making deliveries or transporting clients. In the event of an accident in which your company is at fault, Commercial Auto Insurance can pay for the following:

• Average Cost: $160 – $240 per month

5. Cyber Liability

Oftentimes, many small startup businesses look for just General Liability Insurance to start a contracted job. However, the truth is that a general liability policy excludes cyber-attacks. In the event of a data breach, Cyber Liability Insurance protects your startup company if your digital data is compromised. It covers not only the cost to recover from the attack but also any lawsuits that come from the cyber-attack or data breach and even the cost to improve your digital security or any public relations expenses.

• Average Cost: $130 per month

6. Workers’ Compensation

Under California law, all business owners, even if they only employ one individual are required to carry Workers’ Compensation Insurance. This type of coverage will pay for the medical costs if an employee is injured on the job, and income lost while they recover from those injuries. As with auto insurance rates that fluctuate based on the type of vehicle someone drives, rates for Workers’ Compensation Insurance vary based on the kind of work performed, so a job that carries less risk will usually call for a smaller policy premium.

• Average Cost: $115 per month

7. Errors and Omissions

Also known as Professional Liability Insurance, this insurance protects startup companies that offer professional services to a customer. It protects against claims of malpractice, errors, and negligence. It will also protect you if consumers claim that your advice caused them financial distress or bodily injury. Doctor’s malpractice insurance is a common type of professional liability insurance and can benefit professional service providers like consultants and financial advisors.

• Average Cost: $97 per month

8. Commercial Umbrella 

Think of this as a “miscellaneous insurance” policy. While it may not cover every conceivable situation, it is designed to address issues that may fall through the cracks with other types of policies. In addition, Commercial Umbrella Insurance acts as a “backup” policy if the coverage limits on other policies are exceeded. Therefore, if you are forced to pay millions of dollars in damages in a lawsuit and your standard insurance policy won’t cover the entire amount; commercial umbrella coverage will often pick up the slack, depending on your coverage amount.

• Average Cost: $130 per month

Protect Your Startup With AIS Insurance

Having the correct types of business insurance is essential to protect your startup company. While insurance costs vary, you’ll want to budget around $1,000 to $3,500 for business insurance. These coverages could protect you from lawsuits, damaged property, and more. Are you ready to launch your startup? Speak with one of our Commercial Insurance Specialists today at (855) 919-4247 for a fast and free Commercial Insurance quote.

The information in this article is obtained from various sources and offered for educational purposes only. Furthermore, it should not replace the advice of a qualified professional. The definitions, terms, and coverage in a given policy may differ from those suggested here. No warranty or appropriateness for a specific purpose is expressed or implied.

When shopping for auto insurance, some people decide to purchase only what is legally required in their state. While this route can help you save money on your premium, it could leave you with a hefty repair bill if your car is significantly damaged after an accident. This is where collision insurance comes in.

Collision insurance is a type of coverage that will help pay to repair or replace your vehicle if damaged in an accident with another car or object. Although not required in any state, collision insurance may be required by your lender if you’re currently financing or leasing a vehicle. Let’s dive into this add-on coverage and what it can and won’t pay for.

What Does Collision Insurance Cover? 

Collision insurance will help cover the cost to repair or replace your vehicle (regardless of fault) if it is damaged from…

• An accident with another vehicle (including if your vehicle is parked)
• A collision with a stationary object, such as a fence or light pole
• A single-vehicle accident, such as a rollover

It’s important to note that lenders often require you to purchase collision insurance when you finance or lease a new vehicle.

Collision insurance will not cover any of the following expenses:

• Damage to your vehicle not related to a traffic accident, such as hail damage or theft (covered by comprehensive insurance)
• Any damage to another individual’s vehicle or property (covered by property liability insurance)
• Another driver’s medical bills as a result of an accident (covered by bodily injury insurance)

Understanding Typical Deductibles and Limits 

Like most coverages, collision insurance is often subject to a deductible, which is a set amount that you must pay out of pocket before your insurance steps in. 

Most insurers will typically allow you to select your deductible amount, which can range from $250 up to $1,000. Generally, a high deductible will result in a lower premium and vice versa.  

Your coverage limits may vary depending on your exact policy, but we typically see providers cap payouts at your vehicle’s market value at the time of the accident. This is also referred to as your vehicle’s actual cash value.

For example, let’s say you have collision coverage with a $500 deductible. One afternoon you hit a light post which causes significant damage to your vehicle. If your car is repairable, you’ll pay $500 out of pocket towards any repairs. Your insurer will then handle the rest up to your policy’s limits. However, suppose your insurance provider declares your car as totaled. In that case, you’ll receive a payout equal to your car’s actual cash value minus your deductible.

Do I Need Collision Insurance? 

Collision insurance is typically required for those currently financing or leasing their vehicles, as lenders and leaseholders require additional coverage types. However, if your vehicle is paid off, you can decide whether the add-on is right for you.

When deciding on whether to purchase collision insurance, consider the following:

• Your car’s value: Your car’s value plays a major role in collision coverage. If you have a new car, the add-on is most likely worth it to help pay for expensive repairs. On the flip side, purchasing collision coverage may not be ideal if your vehicle is worth less than your plan’s deductible plus the cost of coverage. 
• Your financial situation: If you were to get into an accident, would you be able to pay for vehicle repairs or a replacement out of pocket? If not, collision insurance is worth considering for financial peace of mind. 

What’s the Difference Between Comprehensive and Collision Insurance? 

When shopping for collision insurance, you’ll often see it bundled alongside comprehensive insurance. Although both coverage types can pay for damage sustained by your vehicle, the two cover different scenarios.

Unlike collision insurance, comprehensive insurance covers damage to your vehicle (or its replacement) after it’s been involved in a non-collision event up to your policy’s limits. Examples of non-collision events include theft, vandalism, falling objects, natural disasters (fire, hailstorms, flooding), and others. Comprehensive coverage is also optional, but it may be required when financing or leasing your vehicle.

Get the Help You Need by Speaking with a Specialist 

If your goal is to save money, be careful about overlooking add-on coverages such as collision insurance, as you could end up paying much more out of pocket down the line. If you’re unsure about which add-on coverages are right for you, AIS can help. Our insurance specialists will guide you through the options available and know what questions to ask. To speak with a specialist today, give us a call at (888) 772-4247.

The information in this article is obtained from various sources and offered for educational purposes only. Furthermore, it should not replace the advice of a qualified professional. The definitions, terms, and coverage in a given policy may be different than those suggested here. No warranty or appropriateness for a specific purpose is expressed or implied.