Keeping your business’s doors open depends on a number of factors. But it’s clear that maintaining your business’s property and equipment is a huge part of that. If these assets are damaged in a fire or natural disaster, it might be difficult for your business to recover. So, you need to protect them. The best way to protect your business and be able to recover some of the costs associated with repairing or replacing your property, is to carry enough hazard insurance. Otherwise known as commercial property insurance.
What Does Hazard Insurance Cover?
Hazard insurance covers both the building that your business owns or rents, as well as the equipment that it uses. Depending on your policy, hazard insurance will generally cover the cost to repair or replace the following items:
Personal property
Tools and equipment
Inventory
Furniture
Computers
Accounts receivable
Documents
Outdoor landscaping
It will cover damages to the above due to:
Fire and smoke damage
Theft and vandalism
Some weather-related events such as hail, lightning, snow, sleet, or ice
Explosions
Aircraft or vehicles
Sprinkler leakage
Building collapse
Water (in certain specific cases)
Civil unrest or rioting
Damages caused by floods, earthquakes, acts of terrorism, nuclear attacks, or damage resulting from war are typically not covered by hazard insurance policies. You will need a separate insurance policy to protect your business from these occurrences.
Does My Business Need Hazard Insurance?
Even though business owners in many states are not required to have hazard insurance. It is still a good idea to get it because it can assist in covering the costs of damages that you would otherwise have to pay for out of your own pocket.
And while you might not be required by your state to have hazard insurance, in many cases if you want to borrow money for your business from a financial institution, you will most likely be required to have a particular type of hazard insurance policy. For instance, loans from the Small Business Administration (SBA) may require evidence of business hazard coverage.
If you’re looking to take out a loan for your business, you can read more about this topic here.
Do I Need Hazard Insurance if I Have a Home Business?
If you run your business out of your home, your homeowner’s insurance policy might not be sufficient to cover the business-related property that you keep in your home. This means you’ll probably want to have a separate policy.
The Cost
The price of hazard insurance will vary widely depending on a number of factors, including:
The age of your building/property – If the workspace that you own or rent is older, you’ll typically pay higher premiums because repairs to older properties tend to be more expensive.
The value of your building/property – The higher the total value of your assets, the higher the premium for this coverage will be.
Whether you choose a cash value or replacement cost policy – With a policy that pays out based on the actual cash value of your property, your payout will be determined by how much your property was originally purchased for before it was damaged. But if you have a policy that pays out based on replacement value, you will be covered for how much it would cost to buy a brand new version of the item that was damaged. Because of the effects of depreciation, cash value insurance is typically more affordable than replacement value insurance.
Coverage limits – As is the case with the vast majority of insurance policies, your monthly premiums will go up as you add more coverage.
Lender requirements – A lender may require that you have a certain amount of property insurance coverage before they will approve your application for a loan. The more insurance your lender requires, the larger your premium will be.
Hazard Insurance for a SBA Loan
The Small Business Administration (SBA) helps small businesses get the credit they need by putting the government’s name on loans made by commercial lenders. The lender provides the loan, and if the borrower doesn’t pay back the loan, the SBA will cover up to 85% of the loss.
To get a small business loan from the SBA, you need to show that you have hazard insurance. Having this type of policy shows that you own real assets that can be taken if you can’t pay back the loan. For example, if a construction company wants to borrow money to buy a piece of equipment but can’t pay back the loan, the lender can take ownership of the equipment.
Types of Hazard Insurance SBA Might Require
In order to be eligible for a loan from the SBA, you will have to show that your business has adequate insurance coverage. This could mean having general liability coverage as well as commercial property insurance/hazard insurance. Keep in mind that depending on the kind of loan you want to get, the Small Business Administration might require you to have other types of insurance coverage, such as workers’ compensation.
Specifically, the Small Business Administration requires the following when it comes to hazard insurance:
The minimum required coverage amount is 80% of loan principal.
Your business’s name must appear on the insurance policy.
Your DBA name must be included in the policy if you use one.
You must show proof of the required insurance within 12 months of receiving your loan. If your business does not already have it when you apply for your loan.
Is Hazard Insurance Tax Deductible?
The Internal Revenue Service considers business insurance premiums to be an ordinary and necessary business expense. So, yes it can be tax deductible. But there are other factors to think about when determining if your hazard insurance is tax deductible.
If you have a home-based business, you may be able to deduct some of your operating costs from your taxable income. Insurance premiums can fall into this category, along with utilities and home office essentials. For instance, you can deduct half of your annual hazard insurance premiums if your home is used for business purposes in excess of 50% of the time.
If your company suffers losses in an area where a federal disaster declaration has been issued, you may be eligible for deductions. If you have hazard insurance and your insurer only pays a portion of your claim, for instance. You can deduct the amount of your claim up to $500 per incident.
Other Types of Business Insurance You Need
What, where, and how you do business will determine the specific types of coverage your company needs. The following are some examples of common types of business insurance policies, other than commercial property/hazard insurance:
Workers’ compensation, which is also referred to as “workers’ comp,” is a type of insurance policy that is mandated by law. It provides benefits to employees in the event that they sustain an injury while performing their job. Employees can receive financial compensation, medical benefits, or both from the fund. Which fills the role of an insurance policy for disabled workers. Different states have different regulations regarding workers’ compensation, so check out our state-by-state guides.
Standard liability claims made by third parties (people who are not affiliated with your company) are covered by general liability insurance. This type of commercial insurance policy will pay for your company’s legal defense expenses in the event that your company is sued for causing bodily injury, damage to property, or injury to reputation. This includes everything from hiring an attorney to paying for court-ordered judgements and settlements. As well as any other costs that may arise.
General liability and commercial property insurance are the two main components that make up a business owner’s policy, or BOP. Which is essentially a bundle of the two (or more) types of commercial insurance. With a BOP, you will be protected from financial loss and covered for any claims that would be covered by either of those two types of policies. One simple policy can protect your small business from a variety of significant legal risks.
Commercial Property Insurance
As covered above, this type of policy typically includes coverages for the most common hazards. It safeguards both the structure and the contents of your business’s property.
If your business uses vehicles, you’ll need commercial auto insurance to cover things like liability, accidents, medical bills, personal injury protection, and uninsured motorists. It’s similar to a personal auto insurance policy. But commercial auto insurance has different eligibility requirements, coverage, exclusions, and limits than personal auto insurance.
Working With EZ
Our insurance agents work with the leading insurance companies across the country to ensure that you have access to the best coverage options for your business and its employees. In fact, we can save you hundreds of dollars annually by tailoring our search to find you exactly what you need, at the best price possible. If you have any questions, please do not hesitate to contact us at 877-670-3538.
Virtually every employer has to carry workers’ compensation insurance. However, some state laws provide exemptions for particular types of employees and business structures. Only a few worker categories are occasionally exempt. This exemption also applies to certain business owners. However, even when workers’ compensation coverage is not required, it is almost always in the best interest of the employer to provide coverage. If an employee sustains an injury on the job the employer may be held responsible for medical expenses, ongoing therapy, and lost wages.
Additionally, if you as the business owner are injured on the job, a workers; compensation policy can help pay for your medical expenses and compensate you for a portion of your lost wages. Your personal health insurance provider may deny your claim if your injury or illness is work-related, leaving you again responsible for these costs. Below we’ll look at the exemption laws in each state, if you’d like more information on the other workers’ compensation laws in your state, check out our state workers’ compensation guides here.
Any business with 4 employees or less does not have to carry workers’ compensation in Alabama, whether they are full or part time doesn’t matter. Alabama employers do not need to carry workers’ compensation for farm laborers, domestic laborers, or casual laborers including temporary or part-time employees hired for only an hour or a day.
Alaska businesses with one or more employees have to have workers’ compensation coverage unless the Alaska Workers’ Compensation Board has approved the business for self-insurance.
Owners and business executives are exempt if they are:
Sole owners
Partners
LLC owners with at least 10% ownership interest in the company
Executive officer or municipal, religious, or legally registered nonprofit organizations.
Executive officers for for-profit corporations with at least 10% ownership.
As for employees who are exempt from coverage:
Part-time babysitters
Non-commercial house cleaning personnel
People who are hired to help a farm with harvest
Amateur event sports officials
Entertainers under contract
Commercial fishers
Taxi drivers under specific contractual arrangements
Anyone who has benefits through the Alaska temporary assistance program.
Professional hockey players and coaches, as long as they are covered under a health insurance plan.
Some real estate agents
Anyone defined as a transportation network company driver.
There are only 4 exemptions from Arizona’s workers’ compensation. Independent contractors and casual laborers do not need to be covered. As well as any employee who voluntarily chooses to not have workers’ compensation coverage. The only owners who do not have to have coverage are sole owners who have no employees. Beyond that, any business owner with one or more employees needs workers’ compensation coverage.
All employers have to carry workers’ compensation insurance for themselves and their employees. The only exceptions to this are sole owners who opt out of coverage for themselves, or employers who have approval to self-insure.
Connecticut is another state that requires all businesses to carry workers’ compensation insurance with very few exceptions. The only employees that don’t need coverage are domestic workers who work less than 26 hours a week. Sole owners, corporate officers, and partners are allowed to opt out of coverage for themselves but they must have coverage for their employees.
Farm laborers and household workers in a private home who earn less than $750 every 3 months do not need workers’ compensation insurance. Other than that every other business owner and employee needs to be covered.
Any employer with one or more full-time, part-time, permanent, or temporary employees has to provide workers’ compensation coverage. Exemptions include:
If you have a single employee, even a part-time worker, you have to purchase workers’ compensation insurance. Only sole owners, partners, corporate officers, and real estate agents are excluded.
All Kansas companies must have workers’ compensation insurance with only a few exceptions. Some agricultural workers do not need to be covered. Sole owners, partners, corporate officers, and independent contractors with no employees do not need workers’ compensation insurance.
Employers who regularly employ one or more employees for 35 or more hours per week for 13 or more weeks in the 52 weeks prior must provide coverage. Exemptions include:
Agricultural workers (fewer than three employees working less than 35 hours per week)
Domestic workers (fewer than three employees working less than 35 hours per week).
All employers must provide coverage. Exemptions include:
Sole proprietors, partners, and officers of corporations
Domestic or household employees whose typical responsibilities include house cleaning and yard work
Casual employment
Only those working for assistance or sustenance
Officials of amateur athletic competition, such as a timer, referee, umpire, or judge.
Real estate, securities, and insurance salespeople paid solely on commission with no minimum earnings guarantee
Direct sellers
Those who deliver single or multiple newspapers and have acknowledged in writing that they have no insurance coverage.
Freelance correspondents who submit articles or photographs for publication are compensated for each submission but have not confirmed coverage in writing.
Barbers and cosmetologists who have contracts with cosmetology salons.
Petroleum land specialists
Licensed jockeys participating in a horse race, from the time the jockey reports to the scale room until the jockey is weighed out after the race.
Licensed trainers, assistant trainers, exercise persons, and pony persons on the premises of a licensed horse race meet.
Non-Montana residents whose primary duties are not performed outside the state. The employer must adhere to the coverage requirements in the location where the employee resides or works.
Officers or managers of a private, non-profit irrigation ditch company, water user cooperative, corporation, or organization.
A minister who is ordained, commissioned, or licensed by a church or religious order.
Individuals who provide companionship services or respite care to incapacitated individuals. The individual providing services or care must be directly employed by a family or legal guardian.
Excluding air search and rescue volunteers, volunteer reserve auxiliary law enforcement, and volunteer firefighters, volunteer workers are defined as:
Professional athletes who compete in contact sports for a team or club
Personnel of freight brokers and forwarders
A musician whose performance is governed by a written contract
Employers with at least one employee have to provide coverage. Exemptions include:
Employment associated with entities engaged in interstate commerce that are not subject to Nevada’s legislative authority
Employment covered by private disability and death benefit plans comprising compensation payments of equal to or greater amounts than those provided in NRS 616 and in effect for at least one year prior to July 1, 1947.
Temporary employees insured in another state who are brought into Nevada if extraterritorial coverage provisions are in effect with the other state.
Casual employment in the construction industry (employment lasting less than 20 days with a total labor cost of less than $500), if the employment is not in the course of the employer’s trade, business, profession, or occupation.
Employers with at least three employees have to provide coverage. Exemptions include Sole proprietors. However, sole proprietors are counted as employees when determining whether a business employs three or more individuals.
All employers must provide coverage. Exemptions include:
Volunteers who provide their services to nonprofit organizations without compensation
Ministers, priests, and rabbis duly ordained, commissioned, or licensed; sextons; Christian Science readers; and sects of religious orders
Customers of supervised amateur athletic activities operated on a nonprofit basis, provided that such s are not otherwise engaged or employed by any person, firm, or corporation participating in such athletic activity Educators in a nonprofit religious, charitable, or educational institution
Individuals employed in a nonmanual capacity by or for a religious, charitable, or educational organization.
Persons receiving charitable aid from a religious or charitable institution who perform work in exchange for such aid, but who are not under an express contract of hire, are considered unpaid volunteers.
People who are covered for specific types of employment under another workers’ compensation system, such as those employed in certain maritime occupations, interstate railroad employees, federal government employees, and others who are covered by federal workers’ compensation laws.
The spouse and minor children of a farmer-employer, provided they are not under an express contract of employment.
Certain foreign government and Native American Nation employees
Provisions of the New York State General Municipal Law that protect New York City police officers, firefighters, and sanitation workers
People, including minors, performing yard work or casual chores in and around a single-family, owner-occupied residence or a noncommercial organization’s property.
Certain real estate salespeople who sign a contract with a broker stating that they are independent contractors are considered independent contractors.
Certain media sales representatives who sign a contract stating they are independent contractors are considered independent contractors.
Certain insurance agents or brokers who sign a contract stating they are independent contractors are considered independent contractors.
Sole proprietors, partners, and certain corporate officers with no additional personnel providing essential business services.
Employers with at least one employee have to provide coverage. Exemptions include:
Sole proprietors, partners, and officers of corporations
Some railroad personnel
Casual employees
Domestic servants employed directly by the household
When less than ten full-time, non-seasonal farm laborers are regularly employed by the same employer, they are considered farm laborers.
employees of the federal government in North Carolina
Those who sell agricultural products for their producers on commission or for other compensation, provided the product is prepared for sale by the producer.
All employers must provide coverage. Exemptions include:
Independent contractors
Some agricultural employees
Certain providers of services administered by the Oklahoma Department of Human Services who are licensed and compensated on a commission-only basis
Any employee of an employer with five or fewer employees who are all related to the employer by blood or marriage. Any employee of a tax-exempt youth sports league.
Sole proprietors, partners, and officers of corporations
Any individual who performs volunteer work and receives no remuneration other than meals, drug or alcohol rehabilitation therapy, transportation, lodging, or reimbursement for incidental expenses is considered a volunteer.
Unlike most other states, South Dakota employers do not legally have to carry workers’ compensation insurance. To avoid civil lawsuits, however, the state encourages employers to have workers’ compensation coverage.
Employers with at least three employees are required to provide coverage. Exemptions include sole owners. However, sole owners are counted as employees when determining whether a business employs three or more individuals.
Employers with at least three employees have to provide coverage. Employers with fewer than three employees who pay wages of at least $500 per calendar quarter must also carry workers’ compensation insurance. Exemptions include some farm laborers.
Employers with three or more workers must provide coverage. Employers with fewer than three workers who pay at least $500 in wages per calendar quarter have to carry workers’ compensation insurance. Exemptions include some farm workers.
Workers’ Compensation Made EZ
Most states require businesses to carry workers’ compensation insurance, which will not only protect your business but also your employees. Keeping your employees safe does not have to be an expensive endeavor for your company. There are numerous ways to promote safety routines and programs, all of which will help you reduce your workers’ compensation costs. If you use the best practices for claims management and follow them in a timely manner, your employees will be able to return to work as soon as they receive medical clearance to do so. Not only will production return to normal, but workers’ compensation costs will get cheaper as well.
Come to EZ for free, instant quotes from one of our agents if you are looking for the best workers’ compensation policy. And if you already have workers’ compensation benefits but are looking for a better deal, we can assist you. Your EZ agent will be familiar with the local laws and able to guide you as you shop around for the best policy at the most affordable price. Enter your zip code in the box above or call us at 877-670-3538 to speak with one of our agents.
Every business that has employees should have workers’ comp insurance. In fact, this type of coverage is required in most states. But even if it weren’t required to have it. You would still have a responsibility to protect your business and its employees from the legal and financial risks associated with workplace injuries.
These policies typically cover most workplace injuries and illnesses caused by workplace conditions. But workers’ compensation cases aren’t always black and white. They definitely cover things like repetitive stress injuries, traumatic brain injuries, broken limbs sustained after a fall, etc. But what are the limits? What or who is does workers’ compensation not cover?
Workers’ compensation insurance is among the simpler types of commercial insurance policies to understand. Simply put, if one of your employees sustains an injury on the job, the policy will be cover them. Employees benefit from compensation for medical expenses and lost wages, and businesses save money by avoiding lawsuits.
But in reality, though, things are not always so straightforward. Some workplace injuries may raise doubts in the minds of employers. What if, for instance, a worker sustains an injury on the job, but the incident was entirely their own doing?
In this case, you should know that workers’ compensation is no-fault. Which means that employees who are injured due to their own carelessness are still entitled to benefits. However, this still has its limits. For example, an employee’s claim will be denied if the incident that led to the injury occurred while the worker was under the influence of alcohol or drugs.
In addition, workers’ comp generally covers repetitive stress injuries like carpal tunnel syndrome and asbestosis. But when it comes to repetitive stress injuries like chronic back pain or diseases like heart disease or high blood pressure, things become a little murkier. An employee claiming that one of these conditions is from work must provide overwhelming evidence.
So, let’s clear things up a little and look a little more closely at what isn’t covered by workers’ compensation.
Examples of Injuries Workers’ Compensation Won’t Cover
Workers’ compensation insurance covers most injuries on the job or when an employee is off-site but still working. Injuries employee injuries in the workplace must be evaluated on a case-by-case basis. There are exceptions to coverage, including:
Driving to or from work – If an employee is hurt while commuting to or from work, the injury is not considered to have occurred in the course of their employment. As a result, the employee is not eligible for compensation unless they were driving specifically for their job.
Injury while intoxicated – If an employee sustains an injury while under the influence of an illegal substance or while intoxicated, and if the employee’s intoxication is the only cause of the injury, the injury will typically not be covered by workers’ comp.
Horseplay – Playing around at work, in general, does not contribute to the success of the company, which is why an injury that results from such an activity is not covered by insurance. But there is an exception to that rule. If an employee gets an injury during the incident but wasn’t directly part of the horseplay, the rule will not apply to the employee.
Intentional actions – In the event that a worker intentionally brings about their own injuries or illnesses while on the job, workers’ compensation will not cover them.
Illegal activities – Workers’ compensation won’t cover injuries of workers as a result of illegal activities on the jobsite.
Policy violations – Employees who sustain injuries while acting in a manner that is contrary to the company’s policies, procedures, or protocols are not covered by workers’ compensation.
Ex-employees – Unless the injury occurred before the employee was terminated from their position. Former employees who have been fired or laid off from their jobs will no longer be covered by workers’ compensation insurance.
Are All Employees Covered?
Workers’ compensation coverage requirements vary by state, as well as by the number of employees and their classification codes. For example, manual laborers are classified differently than office workers for workers’ comp purposes. Some states, for instance, mandate workers’ comp insurance only for businesses with a specific number of employees. In general, though, all full-time employees must be covered by workers’ compensation insurance, but the specific regulations may vary from state to state. Workers’ compensation laws for freelancers, temp workers, and interns are not standardized across the country.
In some states, workers’ compensation insurance is optional for:
Farmhands
Insurance agents
Family members under a certain age
Casual workers
Business owners and partners
Real estate agents
Most state laws also list specific types of employment excluded from workers’ compensation coverage. Typical examples of excluded workers include:
Part-time domestic workers, such as maids and nannies
Part-time gardeners or maintenance workers employed in the home to perform specific work.
intermittent workers performing very little work in the course of a year.
Taxi drivers
Some agricultural workers
Workers’ compensation insurance is typically required by states, but the federal government does not provide its employees with this protection. Instead, they are protected by federal workers’ comp.
These exemptions are not universal, and you should be aware of the workers’ compensation laws in your state. Check out our state-by-state workers’ comp guides for more specific information on laws in your state.
Is There a Workers’ Compensation Claim Deadline?
The majority of the time, the rules governing workers’ compensation work in the employee’s favor. On the other hand, though, employees cannot decide to make a claim for an injury that occurred years ago.
Although there may be some exceptions to these rules. In general, a claim for workers’ compensation benefits has to be made within a certain amount of time in order to be considered. Employees usually have between one and three years from the date of the accident to notify their employer and file a complaint with the state from the time the accident occurred. This time period varies from state to state. Check out our guides to workers’ compensation in each state to get an accurate estimate of the amount of time your employees have to file claims, as well as how long the claims process generally takes.
Does Where an Employee Gets Injured Matter?
The vast majority of injuries that occur while working are covered by insurance, with a few exceptions. But is it necessary for an employee to actually be present at their place of business? In the vast majority of cases, it doesn’t make a difference where the employee is located, as long as they are working; in fact, they could even be traveling between different locations.
Take, for instance, a scenario in which your employee sustains an injury while traveling to or from work. Because they were not carrying out any work-related responsibilities, they would not be eligible for workers’ compensation benefits. Suppose on the other hand, that a contractor must travel from one location to another in order to check on worksites or deliver supplies. Because the contractor was carrying out their duties at the time of the injury, they would be eligible for coverage in the event that they were in a car accident.
Workers’ Comp Laws for Federal Employees, Railroad Employees, and Longshoremen
Workers’ compensation benefits for federal employees, railroad workers, and longshoremen (dock workers) are administered by separate systems from those administered by individual states.
Postal workers and other federal employees have access to benefits under the Federal Employees’ Compensation Act (FECA). Injury and illness on the job are covered by this law.
The Federal Employers’ Liability Act, also known as the Railroad Workers Act, provides protections for railroad workers. In the event of an industrial accident on the railroad, this law allows employees without workers’ compensation to sue their employer. they may get compensation for expenses such as medical care, lost wages, and pain and suffering.
The Longshore and Harbor Workers’ Compensation Act governs workers’ compensation for longshoremen who sustain injuries or occupational diseases while working on U.S. navigable waters or piers.
There are workers’ compensation lawyers who focus on these types of situations. If you are a federal employee, railroad worker, or longshoreman and you get an injury on the job, you should hire a lawyer who focuses on workers’ compensation law.
EZ Can Help
Every business owner should think of workers’ compensation insurance as essential to their operations. It safeguards not only the employees on whom you rely on and who are important to you, but also the hard work that you have put into building your business. But, as with any other insurance policy, there are limits to its coverage. And both employers and employees should be aware of the things that the policy does and doesn’t cover.
EZ is here to assist you with any questions you may have regarding workers’ comp coverage for your business. We will set you up with your own dedicated agent. Who will provide you with instant free quotes, answers to all your questions, and help choosing and signing up for policies, all free of charge. You already have a lot on your plate, so let us handle your insurance needs. To start, simply enter your zip code in the bar located below. Or you can call 877-670-3538 to speak with an agent right now.
Being the boss means you get perks like getting to do something you are passionate about on a daily basis. And make a living from it. What perk is better than loving going into work every day! But it also comes with a lot of responsibility. You’re responsible for your entire company. And there are plenty of risks in the business world no matter how small your business is. The best way to protect your company is with business insurance.
We can already see you rolling your eyes. There are so many stereotypes about business insurance it’s hard to know what to believe. We’re busting some of the most common myths to help you sort through all the misinformation. So you can start to look for the coverage that’s right for your business.
1.General Liability Covers Everything
As easy as it would be if this were true, it’s actually false. General liability coverage (GLC) is pretty comprehensive. But it still has limitations. Every business is different. And every business should have a policy built around its unique needs.
So, what does GLC cover? General liability covers things that fall into the following three categories:
Bodily injury and property damage – GLC will cover bodily injury or damage to property caused by you or your employees.
Medicalexpenses – Additionally, it will pay for any medical costs for anyone hurt on your property. And any injuries brought on by business operations offsite.
Personal and advertising injury -You will be covered for any libel or slander claims, as well as in case of a copyright infringement claim.
It’s very important to know what a general liability policy will cover. But it’s just as important to know what it won’t cover. Here are the more common exclusions, just to give you an idea of what your GLC may be missing:
Operation limitations – Policies for high-hazard businesses will have limitations. These limitations might deny coverage for some problems that arise from specific operations. Be sure to check your policy to make sure all of your business operations are covered.
Contractor and subcontractor exclusion – This means any work done by contractors you hire will not be covered. If your business is heavily based in construction, you will want to watch out for this.
Expected or intended injury – Any injury or property damage that is found to be intentional will not be covered by GLC.
First party damage – Any injury or property damage to yourself or your belongings would generally not be covered by GLC.
Product recalls – With this exclusion, any problems or costs that come with recalls to products you sell or use would not be covered.
While GLC covers the basics, the list of exclusions can go on and on. Every policy will have different exclusions. It’s best to check your policy to see what else your specific business might need.
2. My Home Insurance Covers My Home-Based Business
What if your workplace is in your home? Will your home insurance cover your business? Unfortunately, no. Even though your homeowner’s insurance covers your home and its contents, your business is separate. And your policy will not cover any losses associated with your business. But don’t worry, there are a few insurance options that can help:
Business property insurance – This covers damage to any equipment in your home that you use for your business. That includes computers, printers, furniture, appliances, etc.
There are plenty of commercial insurance options for a home-based business.
Liability insurance – If your business requires anyone coming into your home, this will cover any injuries or property damage.
Professional liability – This insurance is something most professionals need no matter where they work. It safeguards you from possible negligence or failure to meet standards.
Product liability – This coverage will protect you from any damage caused by products you make, sell, or supply to clients.
If your home is your storefront, you’ll need to protect it just like any other brick and mortar business.
3. I Don’t Need Commercial Auto Insurance
If you don’t own a company vehicle, you might think that you don’t need commercial vehicle insurance. That is not entirely true. Just like your homeowner’s insurance, your auto insurance will only cover your car for personal use. For example, getting to and from work. If you get into an accident while working your personal auto insurance will not cover you.
You might need commercial auto insurance if you transport products or visit clients and worksites. You might even need coverage if you send or receive packages at the post office. These policies usually include:
Coverage for medical bills – No-fault or personal injury protection will cover the medical expenses of anyone injured in a car accident regardless of fault.
Uninsured motorist coverage – If you are hit by someone who doesn’t have insurance, or are a victim of a hit-and-run, this will cover any damages from the accident.
Comprehensive and collision coverage – This will cover any theft, vandalism, flood damage, or damage from an object hitting your car.
Even though your company doesn’t own your personal vehicle it still needs commercial insurance. During off hours your personal auto insurance will have your back. But during business hours you need commercial insurance to fill in the gaps.
4. Business Insurance Is Too Expensive
It’s tempting to try and find ways to save money for your business, but if you cut the wrong costs you could end up losing the money you were trying to save and then some. If you don’t cover your business properly, you open yourself up to any number of financial risks. And business insurance isn’t as big of an expense as you might think. Especially considering the money it could save you.
Let’s look at the average costs of some of the types of coverage we’ve talked about:
General liability – Around $88 a month
Business property insurance – Around $65 a month
Professional liability – Around $97 a month
Product liability – Around $100 a month
Commercial auto insurance – Around $167 a month
While those amounts do add up, and prices can differ depending on the risk and the size of your business. It’s still probably less scary than what you imagined. Now imagine you get sued and you don’t have coverage? Legal services can cost between $100-$300 an hour depending on the case. That doesn’t include what you might have to pay if you don’t win.
The Takeaway
The you pay price to insure your business is much less than what you’d pay without it. Having the right business insurance will give you peace of mind. Your insurance company will handle the legal worries while you focus on your business. You protect every other part of your life with insurance, so your business – your livelihood – should be no different. If you need help deciding what insurance best fits your business we’re here to help! EZ.Insure will help you tailor your insurance to you, so come to us for your free quote today. To get started, simply enter your zip code in the bar above, or speak to an agent directly by calling 888-615-4893.
Just one single lawsuit can damage your business beyond repair, so there’s no doubt that you need liability insurance. But it can be a challenge to figure out what kind of commercial insurance your business needs. Different policies cover different risks and claims; in fact, one of the most common questions from small business owners is “What’s the difference between general liability and professional liability insurance?” Both cover different types of risks, and figuring out how each works can be confusing. Understanding how they compare will help you make the best decision for your business. You might even need both!
What Is General Liability Insurance?
Court, attorney fees and settlements will be covered under general liability insurance.
General liability insurance is the most basic kind of commercial insurance. It covers costs if a third party accuses your business of causing them physical harm, damaging their property, harming their reputation through slander, or advertising errors that infringe on their copyright. These policies are usually written on an “occurrence” basis, which means that all losses will be covered during the time of the policy period, regardless of when you file the claim. General liability insurance will cover expenses including:
Professional liability insurance, which includes errors and omissions, or E&O, insurance, covers legal defense if a third party claims they suffered a financial loss as a result of your negligence. It is written on a “claims made” basis, which means that the damages had to have occurred within the active policy period or they will not be covered. Some of the claims that professional liability insurance covers include:
Negligence
Inaccurate professional advice
Failure to uphold contractual promises
Work that was not completed
Work mistakes or omissions
Both insurance policies will cover you in the event of any damages to third parties.
Coverage will typically pay for:
Attorney’s fees
Court costs
Investigator’s bills
Settlements
Judgements
How They Are Similar
Both protect against business liabilities and cover:
Damage to third parties.
Accidental damage, not intentional damage
Restricted coverage within a specific area; if you go outside that area you will not be covered.
How They Differ
The main difference between general liability and professional liability insurance is the risks they cover. General liability insurance will cover physical risks, like bodily injuries or property damage caused by your business’ daily operations. Professional liability covers financial losses resulting from negligence, errors, or omissions that occur when you provide your services to others.
Who Needs General Liability Insurance?
Every business owner should consider buying a general liability insurance plan to protect their assets. Accidents happen, and when you own a business, these accidents can be quite costly. You should consider general liability insurance if you:
If you have a home based business, then general liability is necessary. If you provide professional services or advice, then professional liability is necessary.
Have customers visiting your location.
Rent a physical location.
Handle other people’s property.
Own a home-based business.
Sell, manufacturer, or distribute products.
Advertise your services.
Who Needs Professional Liability Insurance?
Professional liability insurance is important to consider if your business provides professional services and has specialized professional training. Some professionals might even be legally required to obtain this type of insurance. You should consider a professional liability insurance plan if you:
Provide professional or technical services or advice.
Are expected to maintain professional standards.
Some examples of people who should have professional liability insurance are lawyers, consultants, accountants, and technology inspectors.
Which Do You Need?
In many cases, you will need both policies to fully protect your business from an unexpected lawsuit. EZ.Insure provides licensed agents who are highly trained in commercial insurance and can help determine which policy better suits your business, or if you need the coverage of both types. We will compare all plans and find the plan that offers the most coverage at the best price. To get free quotes, simply enter your zip code in the bar above, or to speak with one of our specialized agents, call 888-615-4893.
Businesses grow and change all the time, which means that, at some point, you might need to modify your commercial insurance policies. While your policies are contracts, they are not completely set in stone. An insurance endorsement can add, take away, or exclude certain types of coverage. While some endorsements are added by your insurance company to minimize their risk, others can be beneficial because they allow you, the business owner, to customize your policies, which could save you money. For example, if you find that your policy has something that you do not need, you can request an endorsement to remove it. On the other hand, there might come a time when you need to extend your policy so that your business is fully covered. In this case, you can request an endorsement to add certain types of coverage.
Endorsements Explained
Endorsements are documents that are attached to your original insurance policy and are only good for that particular policy’s period. Some endorsements are added by your insurance company and can either exclude certain things from being covered or clarify what is covered by a policy. For example, some commercial property insurance policies have a wind and hail deductible endorsement, which requires you to pay a separate deductible in the case of wind or hail damage, while some general liability policies have exclusions for damages resulting from exposure to asbestos. Some endorsements clarify what is covered, such as a professional service exclusion, which makes clear that your general liability policy only covers bodily and property damage, not damage caused by professional advice.
As previously mentioned, other endorsements are additions that you can request for your policy. These changes can allow your business to grow and change while still remaining fully covered by your insurance policy. For example, if you change your business’s address, add another location, or add a new product, then you can make changes to your policy without the risk of losing insurance coverage.
Common Endorsements
There are some common endorsements that you might want to consider for your business:
Adding locations and increasing your limits can be done with adding endorsements to provide more liability coverage.
Additional Insured– This is most often paired with a general liability insurance policy and allows you to add a third party to your policy, such as a subcontractor who is doing work for you.
Adding/Changing Location– You can request endorsements to make administrative changes to your policy, such as a change of address or a change in the policyholder’s name. You can also add locations to your policy coverage; this will protect your new location and your current location.
Extended Reporting Period– This will give you the ability to report claims after the expiration date of your insurance policy on a claims-made professional liability policy, or on an error and omissions insurance policy.
Increased Limits– This endorsement allows you to increase your limit of liability for your business property, as well as to extend workers’ compensation benefits not covered by state law.
Industry-Specific Endorsements- You can also add coverage that is specific to your industry with certain endorsements, such as a contractor’s enhancement endorsement. These endorsements will cover equipment, property, and other tools specific to your industry, and at a cheaper rate than if purchased individually.
Adding An Endorsement
Adding endorsements to existing policies is a great way to continue your coverage as your business continues to grow. You can personalize your policies to add endorsements that fit your business’ needs. Adding them is easy: simply speak to your current agent, and ask that they be added when your policy renews, or when you are shopping for a new policy.
It can be confusing to know just how much coverage you need for your growing business. EZ.Insure specializes in breaking down your needs and your risks. We will provide you with a trained, licensed agent who will compare business insurance quotes in minutes. We aim to find you the most coverage with the most savings, all at no cost to you. To get free quotes, simply enter your zip code in the bar above, or to speak directly with an agent, call 888-615-4893.
