Thinking about starting your own small business? That's fantastic! Now get ready for the hundreds of decisions that need to be made before opening your doors.
One of those decisions is to decide what business (commercial) insurance policies you need to get going.
There is really no short answer to this question because the types of coverages you will need depends on many factors; what type of business are you starting? will you be leasing real estate to run the business out of? will you have employees? will your have vehicles owned by your business, used in the business or that display advertising for your business? who will your customers be and do they have any specific requirements for your insurance coverage?
As you can see there are many factors involved in insuring a business so the best advice I can give to start is... do not wait until the last minute to contact an insurance professional to discuss getting coverage! Commercial insurance is not like auto insurance with the old "get a quote in 15 minutes or less" situation. Depending on what type of business you are in, it can take days, or even weeks for your agent to get quotes back from insurance carriers. Often there are many pages of applications an agent will need to fill out and submit to get quotes and approvals so please start early, and be prepared to provide answers about your operation. I cannot tell you how many times a prospect will contact us here at Morris Insurance Services and need coverage that day in order to start a job- only to find out that we frequently need more time than that.
That said, here are a few types of policies you may need to get started.
- General Liability - All business will need General Liability coverage. This policy will protect your business from claims of bodily injury, property damage, libel and slander, and advertising mistakes among other things. It can cover things such as lawyers fees, court costs, settlements and judgements against you. It is highly likely that any client that you are doing work for will at least require proof of general liability coverage before allowing you to begin work.
- Commercial Property Insurance -Helps to protect both your company's physical location and property owned and used in you work including: computer equipment, tools, inventory, furniture, accounts receivable and damage to you building and signage. If you lease space, your landlord will require this coverage.
- Commercial Auto Insurance - Covers you and your employees if you are driving for business purposes. It is important to note that personal auto policies can deny a claim if you are using your car for business so if a vehicle is titled in the company name it must be insured in the company name. Even if its not titled in your company name- if it is being used for business, has advertising for the business placed on it or transports materials, employees or clients, you should have the vehicle insured on a commercial auto policy. If a business owner has employees run errands for the company like trips to the bank or even picking up lunch for the office, they should, at a minimum add non-owned auto coverage to their general liability policy to cover these situations.
- Workers compensation Insurance - If you have employees this covers on-the job injuries or illnesses. Can pay for medical bills, missed wages, and death benefits.
- Professional Liability - also known as Errors and Omissions Insurance. Covers mistakes in your work that cause an injury or financial loss to a customer. Provides coverage for lawyers fees, court costs, settlements and judgements.
- Commercial Umbrella Insurance - Helps protect your business from large claims that exceed the amount of liability coverage you have on your underlying policies.
This list is by no means complete, but it is a start and gives you an idea of not only what policies you should have, but also the policies your customers or vendors may require you to have in order to work with them.
In addition to starting early, I also urge clients not to let price deter you from getting important coverage that your business needs. Since much of the coverage you will purchase will be required by either a client or a state or county government to do business, I try to have clients think of it more as an essential step to have in place before you can begin to earn a living. If you bid on a job and are able to provide proof of insurance up-front with your proposal, it shows the prospective customer that you have your act together and know what you are doing as opposed to someone who needs to scramble at the last minute to meet insurance requirements.
At Morris Insurance Services we have many direct appointments with well known national insurance carriers as well as access to many more through our brokerage division in order to be able to insurance most any type of business. Give us a call at 410-857-4550 today
Check out the video below for more info!