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What is Workers’ Compensation Insurance?

Workers’ compensation insurance, also known as “workers’ comp,” is a legally required (all states except Texas) type of insurance policy that pays benefits to your employees in the event that they are injured on the job.

It functions as a disability insurance fund, providing monetary compensation, healthcare benefits, or both, to employees. Workers’ compensation guidelines vary by state, so check out our workers’ compensation state pages to find out how your state handles workers’ comp regulations.

How Workers’ Compensation Works

The majority of workers’ compensation policies are funded by premiums the insurance carrier collects from you as the business owner. When disagreements arise, the Workers’ Compensation Board, the state entity that manages the program, steps in to handle them.

There are different types of workers’ comp, depending on your industry, with some policies administered by the government in special cases. For example, government employees, longshore and harbor workers, and energy workers are all covered by federal workers’ compensation programs. And for coal miners and their families, the Black Lung Program administers death and disability benefits.

Benefits of Workers’ Compensation

Workers’ compensation benefits may include a portion of lost wages for the time your employee was unable to work. Reimbursement for medical services and occupational therapy may also be paid to your injured employee.

Salary Replacement

In most cases, a workers’ compensation applicant will get some replacement for their lost wages. But it will usually be less than their full pay. The majority of policies cover roughly two-thirds of the beneficiary’s gross pay. Although the payout is often not taxable at the state or federal levels, recipients who receive money from the Supplemental Security Income or Social Security Disability programs may have to pay taxes on those benefits.

Medical Expenses

Workers’ compensation insurance also offers coverage for medical costs associated with an illness or accidents sustained at work. This may include trips to the hospital, surgeries, and medication. In the case of workplace-related illnesses or injuries that are so serious that they require multiple treatments, workers’ comp will cover ongoing care. It will also cover repetitive injuries that manifest over time.

It’s important to note that the majority of workers’ compensation policies only cover medical costs for injuries sustained directly as a result of working. A construction worker, for instance, could seek reimbursement for injuries sustained in a fall from scaffolding, but not for those sustained while traveling to the job site.

Disability Coverage

Some workplace accidents could be severe enough to render your employee permanently or temporarily disabled. In this case, your disabled employee may be eligible for benefits under your workers’ compensation policy to assist with paying their medical expenses and to partially make up for lost wages.

Survivor Benefits

Workers’ compensation can help pay for funeral costs, as well as pay survivor benefits to your employee’s dependents if your employee passes away as a result of a work-related incident.

Types of Workers’ Compensation

Each state is responsible for enforcing workers’ comp laws. There are no federal standards for this type of insurance, so depending on your location, the same injuries may result in radically different types of compensation.

But, when it comes to policy types, there are two types of workers’ compensation policies you can buy for your staff:

Coverage A – This type of policy includes all of the basic state-mandated benefits that an injured or ill employee is entitled to. In addition to salary replacement payments, it also includes any necessary medical treatment, rehabilitation, and death benefits. These benefits are available in every state, with the exception of Texas. Although the payouts vary greatly from state-to-state and are not always available to all employees.
Coverage B – This type of policy provides benefits over the basic minimum required, as offered by Coverage A. With coverage B though, employees are typically only compensated following the employee’s successful lawsuit alleging negligence or other wrongdoing.

In most states employees forfeit their right to hold their employer accountable for negligence by agreeing to receive workers’ compensation. The goal of this wage agreement is to safeguard both employees and employers. In exchange for assurance of payment, workers forgo additional recourse, and employers accept some liability in order to avoid the possibly higher costs of a negligence action.

Even though employees who receive workers’ compensation typically consent to a “no-fault” contract by giving up their right to sue their employers, state legislation and court decisions in certain jurisdictions have restored employees’ abilities to file lawsuits in a number of strictly limited situations. So, depending on where your business is located, you may decide to buy insurance that combines Coverage A and Coverage B.

Who Is Covered by Workers’ Compensation Insurance?

Who must be covered by workers’ compensation insurance depends on a number of factors—the size of your company, and the types of employees you have. For example, in some states, a company must have a certain minimum number of workers before it is required to have workers’ compensation insurance. And, while regulations vary by state, in the majority of states, all full-time employees are required to be covered by workers’ compensation insurance. Workers’ compensation regulations for independent contractors, temporary employees, and interns vary by state.

The industry you work in also makes a difference. For example, in certain states, coverage for workers’ compensation is not necessary for:

Farmhands
Insurance agents
Family members under a certain age
Casual workers
Business owners and partners
Real estate agents

Additionally, employees of the federal government are not protected by state-mandated workers’ compensation insurance. They are instead covered by federal workers’ compensation.

You should be familiar with the workers’ compensation regulations in your state, because these exceptions do not apply in every state.

The Cost of Workers’ Compensation

Workers’ comp insurance premiums are generally set based on every $100 of your company’s payroll. Even so, it’s difficult to pinpoint an exact price without evaluating the different factors for your specific company. On average you can expect to pay anywhere from $0.60 to $2.27 per every $100 on your payroll.

To understand how the cost of your workers’ compensation insurance will be determined, you need to understand a few basic components of the equation:

Payroll

Every workers’ compensation insurance rate is calculated by dividing your payroll by $100. That means the more employees you have, the higher your rate will be. It’s important to keep in mind, though, that you’ll need coverage in some states as soon as you have a single employee, while in others you won’t need it unless you have three or more employees.

Depending on the regulations of your state, you might have employees who do not have to have coverage. For instance, you are probably not required to obtain workers’ compensation for yourself as the business owner. The same often holds true for company executives and limited liability company (LLC) members.

Workers’ Compensation Industry Classification

Certain industries pose higher risks than others. For example, someone working on oil rigs have a substantially higher risk of serious injury than an office worker. Workers in some professions, including contracting and building, run an increased risk. Which drives up the cost of insurance for those people.

States provide a class code for each type of industry. And each code is then given a base rate based on its risk for injury. 38 states employ class codes that were created by the NCCI. Others make use of independent rating agencies, while some have developed their own systems.

Employee Modification Rate

The EMR is a multiplier that represents the history of your claims. Your state workers’ compensation board or its ratings bureau compares your prior workers’ compensation claims to those of businesses in your industry to determine your EMR. Businesses with lower EMRs often pay less for their workers’ compensation insurance, with the typical range of EMRs being 0.75 to 1.25.

State Insurance Factors

Workers’ compensation insurance premiums vary from state-to-state because state laws regulate coverage. The cost of workers’ compensation will most certainly be higher in a state that provides higher or more payments to injured workers, or in a state with a lot of high-risk industries.

Several states though, give employers discounts if they take steps to increase safety and decrease claims. For instance, many state governments offer discounts for setting up safety committees, fall prevention programs, and drug-free workplaces.

Insurance Carriers

While most of the above factors are out of your control, you can still find the best price for your business by shopping around among different insurance carriers. Although this isn’t a universal rule, some workers’ compensation insurance carriers charge higher premiums than others.

The Calculations

The basic formula for estimating workers’ compensation costs takes into account your industry, past claims, and total payroll. The basic formula is your annual employee payroll divided by 100. That sum is then multiplied by the workers comp insurance rate. That total is the estimated cost of your workers compensation premiums.

There are many moving parts in the precise formulas that insurers use to compute your workers’ compensation premium, and the methods they use to do so can differ from one insurer to another. Additionally, these formulas are based on your state-specific workers’ compensation regulations.

You should also take into account that there will be an option to pay your premium annually or monthly. This decision can also affect your price.

You should also consider any adjustments that might be made to your payroll during the year, including changes in your number of employees, your business class code, and your workers’ compensation rate, in order to choose the appropriate payment method for your company.

How to Save on Workers’ Compensation Insurance

The best way to make sure you can get affordable workers’ compensation insurance rates is to reduce the number and cost of your workers’ compensation claims.

You won’t have many options for cost-cutting when an employee submits a claim. To avoid having to pay large premiums in the future, you must put your plans in place as soon as possible.

You should think about implementing the following steps, which could be beneficial to both your company and your employees:

Return to Work Programs

Return to work programs help you get your employees back to work as soon as they are healthy enough.

A return-to-work program might help an employee ease back into their old responsibilities gradually, rather than having to wait until they’re fully recover to handle them. Until they are able to return to their regular tasks, the employee may perform light or modified work.

As part of this program, your employee can receive new training in a different skill set in order to earn their regular pay, instead of the lower rate provided as part of their workers’ compensation claim.

The advantage of this program is that you save money on wages given to any temporary workers you would have had to recruit to cover for your injured employee while they were recovering.

Work Safety Initiatives

The easiest way to reduce the price of workers’ compensation insurance is to avoid work-related illnesses and injuries as much as possible.

To motivate your employees to maintain a safe workplace and lower injury risks, be proactive about encouraging workplace safety measures. Here are some actions you can take to encourage a safer workplace:

Conduct regular safety training – Reaffirm best practices for conduct and safety, and keep on top of employee training for things like equipment usage.
Create a welcoming environment with an open door policy – It should be easy for your employees to approach you with questions about their safety. Remind them to visit you if they want to discuss workplace safety. Pay attention to their concerns, then take appropriate steps to reduce the risks and guarantee the safety of your staff.
Be open and honest about workers’ compensation benefits – When you hire new employees, you should tell them about your company’s policies on workers’ compensation. To remind current employees how workers’ compensation works if they are hurt on the job, arrange an employee benefits refresher.

Your team will feel more at ease and valued if you communicate openly and honestly about the policies you have in place to safeguard and promote their safety.

FAQs

Who pays workers’ compensation premiums?

By law, you as the employer pay the workers’ compensation premium. You can not deduct workers’ compensation payments through your employee’s paycheck.

Who is exempt from workers’ compensation?

Most of the time, only your employees can get workers’ compensation. Contractors or freelancers are almost never included in your plan. Aside from that each state makes its own laws. Arkansas, for example, does not require farm workers or real estate agents to have workers’ compensation.

How many employees do I need to get workers’ compensation insurance?

Every state has different requirements for workers’ compensation. Some states have you get coverage with even 1 employee while others require 3 or more.

Get Workers’ Compensation Coverage with EZ.Insure!

Workers’ compensation insurance exists to safeguard both your company and your employees. At EZ.Insure our experienced representatives are here to answer any additional questions you may have about the specifics of workers’ compensation in your state or industry.

To get a free, no-obligation quote simply enter your ZIP code below or give us a call at (855)-694-0047.

If you’re a small business owner, you’ll need multiple types of commercial insurance to protect your business. But there are ways to simplify things: for example, you can purchase a business owner’s policy. A business owner’s policy (BOP) is an insurance package that combines two (or more) essential types of insurance, commercial property and general liability.

A BOP is a great choice for small business owners. Purchasing these two types of policies separately typically costs more than purchasing a business owner’s policy. And beyond the financial security that a BOP will give you, you’ll also get more leverage with landlords and important clients, since they’ll know that a lawsuit won’t force you out of business. They’ll have more faith in your longevity if you can produce proof of insurance.

How Does a Business Owner’s Policy Work?

As pointed out above, a business owner’s policy is basically a bundle of two types of commercial insurance: general liability and commercial property insurance. A BOP will cover you for any claims that would fall under those two types of policies and protect your business from losses. This type of policy covers a number of significant legal hazards your small business might experience in one easy package.

General Liability

The first line of protection for a small business owner is general liability insurance, which business owner’s policies always include. General liability covers things such as:

Third-party bodily injuries – If the public frequently visits your business, you’ll need to be protected against claims of bodily injury, since you are responsible if someone slips and falls or is hurt while on your property. A business owner’s policy will cover the legal fees and other costs associated with the claims made against you if any accidents occur at your place of business.
Third-party property damage – You are liable for the expense of repairing or replacing any damage If you or one of your employees causes damage to another person’s property. These expenses will also be covered by your business owner’s policy.
Product liability claims – Your business can be held legally responsible for any harm that your products cause to other people or their property. A business owner’s policy will offer a financial safety net if your business sells or manufactures physical products.
Advertising injuries – You could face legal repercussions if you or a member of your staff slanders a third party, violates a company’s copyright, or engages in other types of libel. Your legal representation, as well as any court settlements or awards, will be covered by your business owner’s policy.

Any small business owner who doesn’t have general liability insurance is taking a chance: any lawsuit you face could make a huge dent in your profits, or even bankrupt you. You might even need to have this type of insurance: when you sign a contract or apply for a small business loan, you could be required to provide evidence of liability insurance.

Commercial Property Insurance

The other major type of policy bundled into a BOP is commercial property insurance. This coverage offers financial assistance in the event that your facility or commercial property sustains damage or loss. Typically, this policy covers fire, theft, vandalism, and various weather-related incidents.

You would be responsible for paying for these damages out-of-pocket without commercial property insurance, or a business owner’s policy. Your insurance policy will cover the costs of repairs, the replacement of any broken equipment, and assist in the recovery of your business.

Commercial property insurance is a necessity for any company that owns or rents commercial real estate. Typically, landlords anticipate that their tenants will be covered by their own commercial property insurance. This insurance is also a must if you produce goods, hold stock, or keep equipment.

Business Interruption Insurance

You can also add business interruption insurance to your BOP bundle. This type of policy covers losses that arise as a result of your company temporarily slowing down or ceasing operations due to theft, vandalism, or another insured event.

Every business with recurring expenses like payroll should consider purchasing a BOP that includes business interruption insurance. Business interruption insurance will assist you in keeping up with your obligations if your company is unable to generate revenue for a period of time.

Additional Coverages

In addition to the major types of coverage described above, there are numerous extra coverages that can be added to a BOP that might be right for your specific business. For instance, a small business will frequently benefit from the following endorsements:

Employee Dishonesty – Hopefully all of your employees will be trustworthy and honest, but this isn’t always the case. Employee dishonesty coverage will cover claims made by a customer if your employee steals from them.
Money and Securities – There is a chance that cash will be stolen, either on or off the premises, from your business. With this endorsement, your business will be compensated up to the insured amount.
Business Expense Income and Extra Expense – This add-on covers the loss of revenue and additional expenses that arise if a small business relocates due to structural damage brought on by a covered hazard.
Equipment Breakdown – Most businesses rely on equipment like pricey HVAC systems to maintain a comfortable environment for clients and staff. Your equipment breakdown insurance will cover the pricey repairs or replacement if these systems malfunction.

Each of the above endorsement’s prices are determined by your insurance company. And will either be a flat rate premium or a percentage of the policy premium. Additionally, the cost of these endorsements is determined by the limitations of coverage for each individual policy. It’s also important to remember that an endorsement normally cannot cover things like vehicle insurance, workers’ compensation, or floods, which are covered by other policies.

What Isn’t Covered by a Business Owner’s Policy?

Depending on your business, you may need to purchase other insurance policies that BOPs generally don’t include. This can include:

Workers’ compensation insurance – Workers’ compensation insurance will cover medical bills and lost wages for employees who get injured or fall ill on the job.
Professional liability insurance – Professional liability insurance, often called errors and omissions insurance, will protect you from accusations of negligent behavior or mistakes made by you or your employees when rendering your professional services.
Commercial auto insurance – Commercial auto insurance is yet another important policy for companies that use cars and trucks in their everyday dealings. This policy will cover you if an employee is held accountable for a car accident.
Data breach coverage – Data breach insurance, also known as cyber liability insurance, can assist in covering costs incurred as a result of a data breach. These costs can include alerting impacted parties, engaging credit monitoring services where necessary, and public relations. If your company handles or stores confidential patient, employee, or customer information, this type of coverage is crucial.
Liquor liability – Businesses that sell, serve, or distribute alcohol are protected by liquor liability insurance. This kind of commercial insurance might assist in paying for claims of physical harm or property damage done by someone who has been served alcohol by your business.
Flood/earthquake coverage – This coverage will cover losses associated with natural disasters such as floods or earthquakes. These policies are generally sold separately. This is because not all areas need both.

Which Types of Businesses Should Consider BOPs?

Businesses must typically meet requirements for both annual income and total number of employees in order to be eligible for a BOP. Here are a few examples of the types of companies that typically purchase a business owner’s policy:

Self-storage facilities (storages facilities that offer outdoor vehicle storage are not eligible)
Retail, grocery, and convenience stores
Apartment buildings
Gas stations
Small office buildings (typically with less than 6 stories)
Small motels (typically with less than 3 stories)
Wholesalers
Contractors (though there are many restrictions, like yearly payroll caps and building size)

Additionally, very small businesses, typically those with less than 4 employees, may qualify for what’s known as a micro-BOP. These policies are severely limited and usually only cover property loss. These policies are also not available through every carrier.

Eligibility Requirements

Not everyone needs a business owner’s policy. Many insurers disqualify larger organizations from being eligible for a BOP plan. This is because they are more likely to find more comprehensive protection for their needs through other policy types. Additionally, BOP eligibility and the underwriting process may differ between insurance carriers. The majority of qualified businesses generally:

Operate in a low-risk industry
Do business anywhere besides the business owner’s home
Have less than 100 employees
Generate less than $1million dollars in annual revenue
Operate out of a smaller space
Conduct business primarily on-site

How Much Does a Business Owner’s Policy Cost?

The cost of a BOP generally varies depending on your business’s underwriting factors and any additional coverages needed. With that being said, the typical annual premium for a business owner’s policy is $1200. But the cost can range from $500 to $3500. Your specific coverage limits, industry, claim history, amount of employees, total annual revenue, and building, contents, and equipment replacement costs are all factors that determine the cost of your BOP.

Coverage Limits

Your BOP’s coverage limits have a direct effect on the price of your premiums. Many small businesses buy a BOP with a coverage limit of $1,000,000/$2,000,000. Meaning that over the course of the policy, the insurer will offer $2 million in total coverage and $1 million in coverage per claim per year. But there are BOPs available that come with limits starting at $300,000/$600,000 and going all the way up to $2 million/$4 million. Depending on your insurer, larger limits might also be available.

Industry

Industries with higher risk factors will have to pay a higher premium.

Property value and type

The price of the commercial property insurance element of your BOP will vary based on the type and value of the assets you’re covering. The cost will increase in direct proportion to the value and difficulty of replacing your property.

Location, size, and age of your business

Costs will also vary depending on your business’s location and length of operation. In general, premiums for newer enterprises are higher. In addition, you are more exposed to risk and more likely to spend more for a BOP the more employees you have.

Claims history

When providing you with a quote for a premium, insurers pay close attention to your claims history. If you have previously made a lot of claims related to your business operations, you will likely pay higher premiums.

FAQs

Is a Business Owners Policy required by law?

A BOP is made up of two types of insurance: general liability and business property insurance. There is no law requiring either one. However, a lot of commercial landlords will require you to buy commercial property insurance aka business renter’s insurance. Before you’re allowed to sign a lease your landlord might need to see proof of this coverage. Additionally most of your client’s contracts might also require you to have general liability insurance. So to meet either of those needs you still need to have both of these plans and the easiest way to get both in one go is with a BOP.

Does a Business Owners Policy cover independent contractors?

A BOP usually only covers you and your employees, independent contractors are typically not considered your employees. You can add contractors as temporary additional insured on your policy, or you can even require them to buy their own general liability insurance in their contract.

Is a Business Owners Policy right for me?

If you own a small business that makes less than $1million a year, you might benefit from a BOP. A BOP is a great way to protect your business with the basic insurance coverage. It helps keep your business running and protects you from potential financial disaster in case of an emergency.

How to Buy a Business Owner’s Policy

Ask your current insurer if they offer a business owner’s policy if you currently have general liability insurance, property insurance, or another type of commercial policy through them. You could end up paying less by bundling your policies with them.

Various insurance companies offer business owner’s policies, so it might feel overwhelming to do all the research. That’s where EZ.Insure comes in. We can help you compare policies from the top insurers in the nation. Our highly trained agents can save you hundreds of dollars a year by working with your budget to get you the policy your business needs. To get started, simply enter your ZIP code below, or give one of our agents a call at (855)-694-0047.

What is General Liability Insurance?
What Does General Liability Cover?
The Benefits of General Liability Coverage for Small Businesses
The Cost of General Liability for Small Businesses
FAQs
Why Your Business Should Have General Liability Coverage
Get General Liability Insurance with EZ.Insure!

What is General Liability Insurance?

General liability insurance is important to have because it covers a wide range of common business hazards including, customer injury, customer property damage, and advertising injury. Additionally, general liability coverage is usually needed in order to qualify for a lease, loan, or to satisfy the terms of certain contracts. When you sign a commercial lease, for instance, a landlord can request to see a copy of your general liability insurance certificate.

What Does General Liability Cover?

General liability insurance covers common liability claims made by third parties (people outside your business). If someone sues your business for physical harm, property damage, or advertising injury, this type of commercial insurance policy will pay for the defense costs. This includes everything from hiring a lawyer to paying for court-ordered judgements and settlements. Your commercial general liability (CGL) policy specifically offers protection for:

Third-party bodily injury – General liability insurance can assist in covering medical costs if a customer is injured in an accident at your place of business. If a customer files a lawsuit because of their injury, your policy will also pay your legal fees.
Third-party property damage – A general liability insurance policy will generally provide financial coverage in the event that your business or one of your employees unintentionally destroys or damages someone else’s property.
Product liability – Not all consumer or property damage takes place inside of a place of business. A company that produces, sells, or distributes goods may be held liable for any damage their products cause. The damage could be to people or property. Product liability insurance is a common feature of commercial general liability (CGL) policies, and aids in covering legal fees and other financial damages brought on by defective goods, incorrectly labeled products that cause harm to consumers, and other product risks.
Personal and advertising injuries – General liability insurance can assist in covering the costs of your legal defense, as well as any settlement or judgment that may be reached, in the event that you or your employee is sued for slander, libel, or copyright infringement.

What Doesn’t General Liability Cover?

On the other hand, there are several things a general liability policy won’t cover, so you will need to purchase other insurance policies to fully cover your business. The list of things that general liability will not cover includes:

Professional errors – Legal actions arising from professional errors, such as unfulfilled services and missed deadlines, aren’t covered by general liability, but should be covered by professional liability insurance, aka errors and omissions insurance (E&O).
Employee injuries – When an employee is hurt at work, their medical bills and disability payments are covered by workers’ compensation insurance, not general liability. In most states, any business with employees is required to have workers’ comp. For more information on workers’ compensation insurance, check out our workers’ compensation state-by-state pages.
Lost or damaged property – General liability will not cover lost, stolen, or damaged property, but you can bundle general liability with commercial property insurance in a business owner’s policy (BOP) and get coverage for the cost of replacing company property. Commercial property insurance also covers damage to commercial property caused by a fire or specific weather conditions.
Employee discrimination lawsuits – Employee claims of harassment, discrimination, and wrongful termination will not be covered by general liability but should be covered by employment practices liability insurance (EPLI), which also pays court costs.
Company vehicles – Business use is almost always excluded from personal auto insurance policies. The majority of states mandate that commercial auto insurance be carried on any vehicles owned by businesses.
Liquor Liability – Legal expenses resulting from situations involving customers who drank at your establishment are covered by liquor liability insurance. This can include reckless driving, physical violence, and vandalism. Businesses that serve alcohol must have this policy. You can either buy it alone or combine it with your general liability policy.

The Benefits of General Liability Coverage for Small Businesses

The majority of businesses need this insurance, particularly if they rent or own office or commercial space. And even if that doesn’t apply to you, small businesses that interact directly with clients and consumers will also benefit from general liability insurance, since this type of policy can keep your business alive if you’re sued by a client or competitor.

And it’s not just small business owners who should consider general liability insurance: independent contractors also benefit from general liability coverage. Independent contractors may be held legally responsible for customer accidents, customer property damage, or advertising injuries, just like any other small business owner, even if they don’t have a physical site or expensive equipment that would require a full business owner’s policy with commercial property insurance.

If you’re an independent contractor, you can also ask your clients to add you to their general liability policies as an additional insured if you don’t want to buy your own general liability coverage. As long as you continue to work for the client who purchased your insurance, you are covered. Remember that if your clients add you to their general liability policies, they may pay a higher insurance premium, and that your insurance coverage will terminate when the contract expires.

How Much Does General Liability Cost for Small Businesses?

According to a recent Hiscox survey, the average monthly cost of a commercial general liability policy is $30. According to the report, only 1% of business owners pay more than $100 each month. And 95% pay less than $50. The cost generally varies based on five factors:

Policy terms – Your general liability insurance premium is impacted by the policy’s coverage limits, deductibles, and other specifics.
Your expenses – The higher your operating expenses, the higher your premium.
Building size – Larger structures increase the likelihood of accidents occurring. Therefore, you might pay more if your business is located in a bigger building with higher foot traffic.
Location – Businesses that are located in high-crime areas may have to pay more for liability insurance.
Claims history – If you’ve previously made general liability claims, your premiums can go up. The more claims you’ve made, the higher your premiums.

Frequently Asked Questions

Does the law require small businesses to have general liability insurance?

Generally speaking, no, but particular businesses, including those in the cannabis and construction industries, may be subject to state mandates. You might also be required to have this type of insurance in order to apply for a professional license in your state, depending on the nature of your business. But it’s important to note that, although commercial general liability (CGL) insurance isn’t normally required by law, your landlord, mortgage lender, business partners, or clients may nonetheless require it.

An ACORD certificate of insurance may be requested by a landlord or client to verify your company’s general liability insurance coverage. This document attests to your company’s capacity to manage any claims for property damage or personal harm. This certificate most importantly gives your property manager, bank, and clients peace of mind that they won’t be forced to foot the bill for a lawsuit against your business.

How much coverage do I need?

You’ll need to make sure your general liability coverage satisfies the necessary policy limits if you need to comply with the conditions of a contract or lease. In any case, you should aim for a level of coverage that corresponds to your company’s needs. Essentially, if you want to be sure that your coverage will cover legal expenses if you are sued. To evaluate your exposures and risk of financial loss, take into account the size of your business, the number of employees, and its business processes.

To give you a better idea of specific figures, most businesses choose a policy limitation of $1 million per incident and $2 million total. This means that the policy will pay up to $1 million to cover a single claim, with a lifetime (usually annual) limit of $2 million. With commercial umbrella insurance, you can expand your general liability insurance coverage if your company faces significant risks. And with umbrella insurance, your maximum policy limit is higher, allowing your insurance carrier to cover more expensive claims. With all that being said, you also need to make sure you can easily afford the deductible for your policy. In an emergency, your insurance won’t kick in to pay for your liability claim if you can’t afford to meet your deductible.

What differentiates general liability insurance from professional liability insurance?

Customer injuries, customer property damage, and advertising injuries are all covered by general liability. Disputes over the quality of professional services are covered by professional liability insurance. Almost all businesses require general liability insurance. But those that offer professional services require additional security against errors and dissatisfied customers. This includes professionals like accountants, attorneys, consultants, and insurance agents. All of which who can avoid costly lawsuits relating to the quality of their work thanks to this professional liability insurance.

For certain professions, general liability doesn’t cover libel, slander, and other advertising-related injuries. This includes those in the media and advertising. Instead, these businesses need professional liability insurance, specifically media liability insurance.

What types of businesses benefit from general liability?

The following business categories frequently purchase general liability insurance:

- Small businesses/shops
- Landscaping businesses
- IT consultants
- Real estate agents
- Consultants
- Marketing companies
- Cleaning services
- Independent contractors

Why Your Business Should Have General Liability Coverage

Without general liability insurance, dealing with judgements, settlements, and legal costs can be exceedingly expensive and can bring a company to its knees. Consider this: just an hour with a lawyer can cost more than $100. Additionally, court costs could approach $75,000 if the case goes to trial. But you might still have to shell out a few thousand dollars even if the judge dismissed the case. Your business runs the risk of going bankrupt if you don’t have general liability insurance. Additionally, if you don’t have general liability insurance, you can lose clients. Since they won’t do business with you without the proper protections.

Get General Liability Insurance with EZ.Insure!

Working with an EZ agent is the best way to buy your general liability policy. Our service focuses on each customer and creates a supportive environment throughout the shopping experience. Along with our personalized service, we provide immediate results. You will see your agent’s info, as well as your free quotes based on your needs, as soon as you submit a form. We want to help you make the best decision and maximize your savings. There is no hassle, no obligation to buy, and no more headaches, and it’s all completely free. To get started simply enter your ZIP code below or call one of our agents today at (855)-694-0047.

What is Business Interruption Insurance?
What Does Business Interruption Insurance Cover?
What Isn’t Covered by Business Interruption Insurance?
What Events Does Business Interruption Insurance Cover?
What Events Are Not Covered By Business Interruption Insurance?
How Much Does Business Interruption Cost for Small Businesses?
How Does Business Interruption Insurance Work?
Why is Business Interruption Insurance Important for Small Businesses?
How Much Business Interruption Insurance Do Small Businesses Need?
FAQs
Get Business Interruption Insurance Today

What is Business Interruption Insurance?

Business interruption insurance (also called business income insurance) safeguards companies from financial losses due to unexpected events that cause businesses to halt their operations. Natural disasters, fires and theft are all events that can leave organizations in shambles without the proper protection plan in places.

Business interruption insurance works to mitigate these financial risks by replacing lost income while shut down. Additionally, this type of policy covers operating expenses such as rent, power bills, employee wages, bank loans and taxes.

What Does Business Interruption Insurance Cover?

If your business is forced to shut down due to an unforeseen circumstance, the last thing you want to worry about is not being able to pay the bills, or your employees for that matter. Here is a list of the key areas that are covered by business interruption insurance:

Lost Revenue: Any income you would have earned if your business was running normally.
Employee Wages: Ensures your staff continues to receive payment, and helps avoid layoffs during the closure.
Ongoing Expenses: Any essential expenses that keep regularly keep your business afloat such as rent and utilities (this varies from policy to policy).
Relocation Expenses: Covering moving expenses to your temporary location, and the cost of rent.
Taxes: Tax obligations are taken care of while operations are halted.
Loan Payments: Keeping up with payments helps to avoid defaults.
Recovery Costs: Payments contribute to efforts needed to get up and running again such as marketing.
Training Costs and Commission: The cost of retraining personnel is generally covered, helping businesses recover with ease.

What Isn’t Covered by Business Interruption Insurance?

Most business interruption policies do not cover the following assets or losses:

Vehicle Damage (commercial auto insurance is needed).
Damaged Inventory or personal items (usually covered by commercial property insurance).
Undocumented revenue losses.
Electronic data (unless your policy explicitly states otherwise, cyber insurance is needed).

What Events Does Business Interruption Insurance Cover?

Business interruption insurance usually covers the following disruptive events:

Fires
Windstorms
Hailstorms
Lightning Damage
Water Damage (not including flooding)
Theft
Explosions
Vandelism
Vehicle Damage
Equipment Breakdown
Civil Disruptions
Supply Chain Problems

What Events Are Not Covered By Business Interruption Insurance?

Flooding/Mudslides (flood insurance is required)
Earthquakes (earthquake insurance is required)
War-Related Damages
Pandemics or Disease Outbreaks
Power Outages (that originate off-site)
Gradual Deterioration (wear and tear)

How Much Does Business Interruption Cost for Small Businesses?

The average cost of a business interruption insurance policy for small businesses varies based on the following factors:

Company Size: The more employees you have, the more wages will need to be covered in the event of an interruption.
Industry: Industries involving high-risk procedures or equipment may face higher rates.
Location: Geographic areas prone to natural disasters or high crime rates may face increased costs.
Revenue: The more income your company needs to be covered, the higher your premium will be.
Policy Limits: While higher coverage limits offer more protection, they tend to increase the costs of premiums.

On average, the cost of a business interruption policy for a small business ranges between $500 and $2000 per year. To get a free quote tailored specifically to your business, click the button below.

How Does Business Interruption Insurance Work?

Here’s a quick overview of how a business interruption insurance plan works:

Triggering Event: Coverage is activated after a covered event (event included in your policy) takes place.
Restoration Period: Policies typically include a 48 to 72 hour waiting period before the coverage actually kicks in and losses start to be settled.
Claims Process: After the restoration period, you’ll then file the claims with your insurance provider, providing all details of damages and financial losses.
Investigation: The insurer generally investigates the business site and reviews any financial records to determine the extent of damage, and the amount of compensation you’ll receive.
Payout and Recovery: Lastly, the insurance company will compensate you for the lost revenue and any other applicable expenses, to help get your business up and running again. The length of time that you will receive funds depends on the assessment made by the insurance adjuster, but most policies cover between 3 to 12 months. With that being said, coverage can be extended if necessary.

Why is Business Interruption Insurance Important for Small Businesses?

Let’s face facts. Small businesses tend to have less capital on hand than bigger, more established corporations. Because of this, an unexpected shutdown can be disastrous for small businesses, in many cases causing them to layoff employees, lose customers, miss payments or worse, shut down their entire operation.

When a business is flourishing, monthly expenses may seem like an afterthought, but when a disaster takes place, they add up very quickly. With a comprehensive business interruption plan in place, you can rest assured knowing that your business will recover quickly and come back stronger than ever.

How Much Business Interruption Insurance Do Small Businesses Need?

While the amount of coverage that a businesses needs varies greatly and can be difficult to determine, consider the following when estimating your company’s insurance needs:

Identify Your Average Monthly Revenue: This exercise gives you an idea of the total income that’ll need to be replaced during a shutdown.
Estimate Your Monthly Operating Expenses: Could include rent, utilities, payroll, taxes and loans.
Estimate the Total Recovery Time: Ask yourself how long you think it would take to get your business up and running again after an event.

Now take the average monthly revenue and multiply it by your estimated recovery time (for example, if your monthly revenue is $20,000, and you think it will take you 12 months to recover, you’d calculate $20,000 x 12). Do this exercise again with your monthly operating expenses. Once this is complete, get in touch with a licensed insurance agent, who will help you find a tailored policy based on those profits, expenses and estimated down-time.

FAQs

Is business interruption insurance purchased as a standalone policy?

Business interruption insurance is not usually sold as a standalone policy. Instead this coverage type is commonly purchased as part of a Business Owners’ Policy (BOP), which combines general liability insurance, commercial property insurance and business interruption insurance. Another option is to purchase it as an add-on or endorsement to a commercial property insurance policy or a general liability policy alone. Combining multiple types of insurance on policy, not only protects your company from multiple angles, but also tends to come with discounts.

What is an example of small business interruption insurance?

Business interruption insurance kicks in when a business interruption event takes place causing physical property loss, causing the business to shut down operations. Common examples of interruptions include fires, cyber attacks or theft.

How long does business interruption insurance last?

Business interruption insurance provides monetary relief for businesses during the “restoration period” or time needed to repair or rebuild the damaged property. In general, this period usually lasts up to 12 months, but could be extended under certain circumstances.

Does business interruption insurance cover pandemics or government shutdowns?

Business interruption insurance policies usually do not cover government shutdowns or pandemics. To ensure that you understand what is covered and what isn’t, view your policy details or reach out to your insurance agent.

Get Business Interruption Insurance Today with EZ.Insure

EZ.Insure understands how difficult it is for small businesses to recover after experiencing an event that forces a temporary shutdown. Instead of waiting for the unexpected to occur, be proactive and get insured today!

Our easy-to-use platform offers free quotes tailored to your business needs, a side-by-side plan comparison tool, and 24/7 expert assistance from our licensed insurance agents. Getting insured may seem like a daunting process, but with the help of EZ.Insure it doesn’t have to be!

To get started and receive your free, instant quote, click the button below or call us at (855)-694-0047.

What is a Certificate of Insurance and Why Do You Need One?

A Certificate of Insurance (COI) is more than simply a piece of paper—it’s proof of your coverage and professionalism.

Whether you’re a contractor, small business owner, event organizer, or another profession, having a COI guarantees that you meet legal and client demands while simultaneously building trust with your partners.

Now let’s take it a step further and discuss what a certificate of insurance is, why having one is so important, and how you can get one.

What is a Certificate of Insurance?

A Certificate of Insurance (COI) is a standardized document that verifies that your business or services are covered by active insurance coverage. Here’s what’s included in your standard COI:

Policyholder Information: Identifies the insured company or person.
Insurance Company Details: Provides contact information for the insurer.
Policy Types & Coverage Limits: Provides a list of insurance policies, (workers’ compensation, general liability, etc.), along with their respective limits.
Effective Dates: Indicates the beginning and ending dates of coverage.

COIs can include multiple different policy types such as general liability, professional liability, and commercial auto insurance, all listed on the same document.

Why is a Certificate of Insurance Important?

Provides Proof of Coverage: Having a COI shows others such as clients, partners and vendors that you’re insured, giving them peace of mind.
Establishes Trust & Professionalism: Demonstrates that you take financial responsibility seriously, increasing confidence in business interactions.
Meets Contractual Obligations: Guarantees adherence to contracts requiring insurance protection, shielding all parties from potential liabilities.

How Does it Differ from an Insurance Policy?

A common misperception is that a Certificate of Insurance (COI) is the same as an insurance policy. Although they are linked, they perform completely different functions:

A Certificate of Insurance is a Summary: A Certificate of Insurance is a one-page document that summarizes the insurance coverage a policyholder has. It contains fundamental information such as policyholder information, types of coverage, coverage limits, and effective dates.
An Insurance Policy is Comprehensive: In contrast, an insurance policy is a lengthy contract outlining all of the coverage’s terms and conditions. It offers information exclusions, deductibles, premiums, and other relevant clauses.
Why the Difference Matters: A COI is a quick way of proving coverage, but it does not include the complete terms or fine print of the insurance policy. Businesses that require a COI should always review the entire policy to ensure that it satisfies their needs.

When You Might Be Asked for a Certificate of Insurance

A COI may be required in a number of professional settings:

Business Contracts: Prior to beginning a project, clients may ask for proof of coverage.
Property Rentals: Landlords frequently ask commercial tenants to provide proof of liability insurance in the form of a COI.
Event Planning: Venues may request a Certificate of Insurance (COI) to prove your coverage for accidents or damage.
Client Peace of Mind: Clients frequently request COIs to limit their responsibility while working with contractors or service providers.

How to Get a Certificate of Insurance

Request a COI From Your Insurer: Most insurers will give them to you at no additional expense.
Review the Details: Check that insurance limits, dates, and coverage(s) making sure that they align with the details on your policy, and are consistent with client or contract requirements.
Request in Advance: Always have a COI available before beginning a project or signing a lease.

Mistakes to Avoid When Handling a COI

When providing or handling your Certificate of Insurance, make sure to avoid the following mistakes:

Providing an Outdated COI: Over time, insurance coverages and details tend to change. Using an expired COI or one that does not reflect current coverage may result in disputes or contract termination.
Failing to Meet Client Requirements: Certain contracts demand specific coverages or endorsements, such as adding the client as an additional insured. Always double-check the COI to make sure it fits the other party’s specifications.
Relying Solely on a COI: A COI does not replace the entire insurance coverage. Always check the entire policy to understand the actual terms.

Final Thoughts

A Certificate of Insurance is more than simply a requirement— it’s a valuable tool for protecting your business, winning client trust, and pursuing emerging opportunities.

Don’t wait to secure your business coverage and COI. Visit EZ.Insure today to learn about comprehensive coverage options so your business can stay successful and thrive for years to come.

To get started, just enter your ZIP code on the right side of the screen, or give us a call at (855)-694-0047.

Was this blog helpful? Check out our full resource library to gain more tips and advice to help your business stay safe and save money.

Do You Need Commercial Insurance For Uber?

Driving for Uber or another ride-sharing is an awesome way to earn extra money, but it also comes with some risks. On top of that, most standard auto insurance won’t fully cover you while on the job.

That’s why it’s crucial to understand the types of coverage you need, the average cost, and how to find the best policy to ensure that you and your passengers are protected.

Luckily, we’ve developed a simple guide exploring all of these key points. Let’s dive in!

Already know what you need? That’s great! Get a personalized commercial auto insurance quote from EZ.Insure today, and stay protected from day one.

Why Uber Drivers Need More Than Just Personal Auto Insurance

When you drive for Uber, basic personal auto insurance is not usually sufficient. Here’s why:

The Difference Between Personal Auto and Commercial Insurance

Personal auto insurance is intended for personal, not commercial, usage. When you drive for Uber, you are using your vehicle for commercial purposes, which alters your risk profile in the eyes of insurance companies. This means that many personal motor insurance policies will not cover incidents while driving for Uber.

Gaps in Uber’s Insurance Coverage

Uber offers some insurance coverage to drivers, but it is limited. Uber’s coverage only applies during some parts of your drive.

Let’s take a look at some specific driving situations and which insurance coverage would apply during each:

Offline or Personal Use: If you are using your vehicle for personal purposes, and not online in the Uber app, you’ll have to rely on your personal vehicle insurance policy.

Waiting to Receive a Ride Request: Uber offers limited liability coverage during these times.

En Route to Pick Someone Up & During a Ride: Uber provides liability, collision and comprehensive coverage, but only if you have these coverages on your personal policy. Their coverages also usually include a deductible.

In short, while your own coverage will help in some ways, having a comprehensive commercial auto plan helps by filing the gaps in coverage, so you can avoid costly out-of-pocket expenses.

Types of Commercial Insurance You Need as an Uber Driver

As an Uber driver, you need several kinds of commercial insurance to ensure complete coverage. Here’s an overview of the coverage types you’ll want to invest in:

Rideshare Insurance: This is a hybrid coverage intended for Uber and other ridesharing drivers. It fills the gap between your personal auto insurance and Uber’s coverage, ensuring you’re protected during all driving phases

Liability coverage: This coverage type protects you if you are at fault in an accident that injures others or damages another person’s property. This coverage is crucial in order to avoid costly out-of-pocket expenses for legal or medical bills.

Collision Coverage: This policy type provides coverage for the cost of repairing or replacing your car in the event of an accident, regardless of responsibility. Since Uber’s collision coverage is only available if you have it on your personal policy, adding collision insurance to your business policy assures you’re covered in the event of an accident while driving for Uber.

Comprehensive Coverage: This type of insurance protects you from non-collision incidents such as theft, vandalism, and natural disasters. Given the time that Uber drivers spend on the road, this coverage is critical.

Underinsured/Uninsured Motorist Coverage: If you are hit by a driver who does not have appropriate insurance, underinsured/uninsured motorist policy will protect you.

Risks of Driving for Uber Without Commercial Insurance

Driving for Uber without sufficient commercial insurance might result in major financial and legal consequences. Here’s what you’re risking:

Risk of Claim Denial: If you are involved in an accident while waiting for a ride request, your personal motor insurance may deny your claim due to commercial use. Without commercial insurance, you may be solely responsible for repair costs and liabilities expenses.
Out-of-Pocket Expenses: Paying for medical bills, car repairs, or legal expenses out of pocket can be extremely costly. Commercial insurance protects you from such risks by ensuring you are covered in all circumstances.

How to find Commercial Auto Insurance for Uber Drivers

Finding the right commercial insurance for Uber requires careful consideration. Here are key factors to keep in mind:

Coverage Options: Look for policies that specifically cover rideshare driving and offer comprehensive, liability, and uninsured motorist protection.
Cost and Affordability: Balancing affordability with the right coverage is crucial. Getting quotes from multiple providers can help you find competitive rates.
Customer Support: Choose an insurer with excellent customer service to ensure you can easily manage claims or get assistance when needed.

Compare Rates with EZ.Insure

EZ.Insure is the best option for Uber drivers looking for commercial insurance. EZ.Insure simplifies the process for rideshare drivers by providing quick quotes, low rates, and coverage options tailored to their needs.

Get a personalized commercial insurance quote from EZ.Insure now and drive with confidence.

Average Cost of Commercial Insurance for Uber Drivers

The cost of commercial insurance for Uber varies based on several factors:

Location: Urban regions typically have higher premiums due to increased accident risk.
Driving History: A clean record will help lower your insurance, however accidents or violations might raise it.
Vehicle Type: Larger vehicles or those with higher repair expenses may have higher premiums.

While premium costs vary quite a bit depending on the above factors, and the carrier you’re working with, Uber drivers typically pay between $100 and $300 per month for commercial auto coverage.

FAQs

Do I need commercial insurance coverage even if I only drive part-time for uber?

Yes, even part-time Uber drivers require commercial insurance. Part-time driving is still considered commercial use and is therefore not usually covered by personal vehicle insurance.

What is the difference between rideshare and commercial insurance?

Rideshare insurance is a type of commercial auto insurance intended exclusively for drivers employed by companies such as Uber. It fills in gaps that traditional business or personal insurance may not cover. Commercial insurance is an overarching term that refers to a variety of different policy types, all aimed at protecting businesses.

Can I drive without company insurance while not logged in to Uber?

Yes, when you are not actively working for Uber, your personal motor insurance usually covers you. However, getting rideshare or commercial insurance guarantees that you are fully covered while on the job.

Is this blog’s information applicable when driving for other ridesharing apps, such as Lyft?

Yes, the information in this guide is generally applicable to drivers for other ridesharing firms, including Lyft. Whether you drive for Uber, Lyft, or another service, the need for commercial insurance is similar. Both Uber and Lyft offer limited insurance coverage, but it may not entirely protect you in all instances.

Get the Peace of Mind You Deserve as an Uber Driver

Commercial insurance for Uber drivers is more than just an option; it’s necessary in order to protect yourself, your passengers, and your rideshare business.

Commercial insurance provides the peace of mind that every driver deserves by filling in the gaps between personal and Uber-provided insurance.

Don’t leave your safety to chance. Instead get insured today!

Ready to take the next steps? To ensure that you’re covered every mile of the way, get a quote from EZ.Insure! Simply enter your ZIP code into our data form, or call us directly at (855)-694-0047.

Was this guide helpful? If so, take a moment to check out our entire resource library where we house tons of informational articles, all aimed at helping people save money and run successful business operations!

Jump To:

What is Workers’ Compensation Insurance?

How Workers’ Compensation Works

Compare Commercial Insurance Plans

Benefits of Workers’ Compensation

Salary Replacement

Medical Expenses

Disability Coverage

Survivor Benefits

Types of Workers’ Compensation

Who Is Covered by Workers’ Compensation Insurance?

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The Cost of Workers’ Compensation

Payroll

Workers’ Compensation Industry Classification

Employee Modification Rate

Insurance Carriers

The Calculations

How to Save on Workers’ Compensation Insurance

Return to Work Programs

Work Safety Initiatives

FAQs

Who pays workers’ compensation premiums?

Who is exempt from workers’ compensation?

How many employees do I need to get workers’ compensation insurance?

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Jump To:

How Does a Business Owner’s Policy Work?

Commercial Property Insurance

Business Interruption Insurance

Additional Coverages

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What Isn’t Covered by a Business Owner’s Policy?

Which Types of Businesses Should Consider BOPs?

Eligibility Requirements

How Much Does a Business Owner’s Policy Cost?

Coverage Limits

Industry

Property value and type

Location, size, and age of your business

Claims history

FAQs

Is a Business Owners Policy required by law?

Does a Business Owners Policy cover independent contractors?

Is a Business Owners Policy right for me?

How to Buy a Business Owner’s Policy

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Jump To:

What is General Liability Insurance?

What Does General Liability Cover?

What Doesn’t General Liability Cover?

The Benefits of General Liability Coverage for Small Businesses

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How Much Does General Liability Cost for Small Businesses?

Frequently Asked Questions

Does the law require small businesses to have general liability insurance?

How much coverage do I need?

What differentiates general liability insurance from professional liability insurance?

What types of businesses benefit from general liability?

Why Your Business Should Have General Liability Coverage

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Table of Contents

What is Business Interruption Insurance?

What Does Business Interruption Insurance Cover?

What Isn’t Covered by Business Interruption Insurance?

What Events Does Business Interruption Insurance Cover?

What Events Are Not Covered By Business Interruption Insurance?

How Much Does Business Interruption Cost for Small Businesses?

Compare Business Insurance Plans

How Does Business Interruption Insurance Work?

Why is Business Interruption Insurance Important for Small Businesses?

How Much Business Interruption Insurance Do Small Businesses Need?

FAQs

Get Business Interruption Insurance Today with EZ.Insure

Compare Business Insurance Plans

What is a Certificate of Insurance?

Why is a Certificate of Insurance Important?

How Does it Differ from an Insurance Policy?