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Why New Businesses Need Startup Insurance

Starting a new business? If the answer is yes, then your likely swamped with a million different thing to take care of. At this point you’ve likely already sought out legal advice, have a well-rounded business plan, and employees picked out, but did you remember to get insured? Protecting your business from the get-go with a comprehensive policy is crucial to running a smooth operation, and mitigating costly risks. But with so many different variables, it’s hard to know where to start or what you really need. Luckily, we’ve got a guide for you here that includes all of the necessities to ensure a smooth launch. And if you’re thinking specifically about your employees, we have another separate section exploring group health insurance.

Types of Insurance for Your Startup:

Worker’s Compensation Insurance

  1. This coverage pays for medical care and replaces lost wages for the worker affected.
  2. This is required insurance coverage. (Except in Texas)
  3. Insurance cost is averages around $2 for every $100 in payroll.

Unemployment Compensation Insurance

  1. Guarantees a portion of wages to employees in the event of a lost job.
  2. This is required insurance.
  3. Insurance cost varies by state.
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Planning for unforeseen disasters now can save you headaches later.

Disability Insurance (Required in Some States)

  1. This covers your employees if an illness or injury causes them to miss work.
  2. Rhode Island, Hawaii, New Jersey, New York, and California require this.
  3. Insurance cost will be about .25%- .5% of payroll.

General Liability Insurance

  1. Covers the costs of someone else injuring themselves on your property or from a business service/product.
  2. This is not required coverage.
  3. Average liability coverage is around $500 per year but may increase or decrease depending on businesses risk level.

Commercial Property Insurance

  1. This covers your physical property and spaces that belong to your business. (Including weather, vandalism, or theft)
  2. This is not required coverage.
  3. Average insurance cost is about $1500 per year.

Professional Liability Insurance

  1. This is also known as Errors and Omissions insurance. You’ll need this for higher risk businesses such as lawyers or doctors.
  2. This is not required insurance.
  3. Average insurance cost is about $1350 per year.

Product Liability Insurance

  1. This coverage protects you from faulty merchandise. If you operate with a manufacturer and/or packagers, this can cover you in case they make a mistake.
  2. This is not required insurance.
  3. The cost will be about .25￠ for every $100 in retail sales.

Employment Practices Liability Insurance

  1. This coverage protects you in cases of sexual harassment lawsuits or otherwise.
  2. This insurance is not required by law
  3. These policies have wider ranges due to many factors such as employee number, turnover, and type of business. The range will be from $800-$3000 per year.

Key Person Insurance

  1. This insurance type covers your business in the event that the business owner or another key personnel member dies or becomes disabled.
  2. This is not required insurance.
  3. Less than $1000 per year

Other Insurance Policies For Your Startup

Business Vehicle Insurance

  • Covers vehicles used for the business

Directors and Officers Liability Insurance

  • Covers the directors and officers of non-profit businesses in lawsuits claiming they mishandled their business

Business Identity Insurance

  • Covers cases of identity theft, even going so far as to notify your customers for you should you have their information

Terrorism Insurance

  • Covers cases of terrorism affecting your business. Check to make sure it is not already bundled with your other policies.

 

Protect Your Business With EZ.Insure

Of course, we hope you never have to take advantage of these types of startup insurance. However, when it comes down to it, it’s best to keep everyone covered. Whether you’re a home-based business or a larger one, you’ll benefit from the extra support.

 

EZ.Insure offers a helping hand by matching business owners with the perfect startup insurance plans guaranteed to line up with your needs and budget. Your agent will answer any questions you have, compare the plans for you, and even sign you up, free of charge. To get started simply enter your zip code in the bar above, or you can speak to an agent by  calling 855-694-0047. We make the entire process easy, simple, and quick.

 

FAQ

  • What insurance does a new business need? We recommend all new business get worker’s compensation (required in most states), general liability, and commercial property insurance. These three policy types ensure that your staff, assets, and clients are well-protected. Additionally, depending your industry, professional liability or product liability may be crucial too.
  • How much does business insurance cost for a startup? It all depends on the business size and specific type of coverage. For instance, general liability insurance averages at around $500 per year, while commercial property coverage is closer to $1,500 per year.
  • Can I start a business with no insurance? As discussed, some insurance types like workers’ compensation are legally required. Otherwise, the answer is yes, but it’s risky. Be sure to check your state laws regarding insurance requirements and understand that with no insurance, you could face major financial liabilities.
  • Is business insurance tax-deductible? Yes, in general business insurance premiums are tax-deductible as business expenses.
  • Do I need insurance if I’m a home-based business? Yes, like all other businesses, home-based companies still face risks including property damage and liability claims.

How To Insure Your Small Business

how to insure your small business text overlaying image of a business man working Your company will be better protected from potential losses and liabilities if it has small business insurance. Business insurance can assist in covering claims resulting from professional errors and natural disasters. As well as bodily injuries and property damage. If you do not have this coverage for your company, you will have to to pay the cost of any claims out of your own personal assets. This forces the owners of many small businesses to make the difficult decision to permanently close their businesses. Continue reading this article if you want to learn how to obtain insurance for your small business.

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Get Started

Looking for business insurance and making sure you’re getting all the coverage you need can get complicated. So, let’s break down what you need to do to start.

1.Collect information

Obtaining business insurance is as complicated as any other aspect of managing a company. In order to provide you with an insurance policy, insurance companies require a substantial amount of information about your needs, risks, coverages, and costs. 

 

You might be familiar with some of it or have it handy. While other details might be trickier to track down. EZ can help in that regard. We have helped thousands of other customers through the commercial insurance application process. So, we know what is required of you and how to get it. Let’s go over the requirements so the application process goes as quickly and easily as possible.

Business Operation Information

Your insurance agent or company will need a thorough understanding of your company’s operations in order to provide you with an accurate quote. If you’re in the contracting business, for instance, it’s not enough to know that you’re an electrician. The percentage of commercial versus residential work you do, whether or not you use subcontractors, do you use ladders or scaffolding, do you install alarms, etc., are all relevant details. 

 

The types of questions you’ll be asked vary widely by profession. It’s fine if you don’t know the answers right away. But you’ll save time and energy if you have a solid grasp of your operations before beginning the application process. In order to receive quotes from insurance companies based solely on operational exposures, you must be as specific as possible with your agent. 

Ownership and Experience

Questions about yourself, such as how long you’ve been in business and how much experience you have, will be asked. As well as questions about your company’s operations. Your quote will be based on the information you provide to the insurance company regarding the business’s owners and, in some cases, employees. If your resume is strong, you may be able to negotiate a lower price. 

Financial Data

Get some numbers ready. Your insurance agent or provider will inquire about projected earnings, employee headcount, outside vendors, and stock on hand. These estimates are predicated on the length of your policy, which may or may not align with your fiscal year. If your policy is audited at the end of the policy term and you were wrong in your projection, you could be penalized. However, you are not required to provide any confidential reports.

Contracts

If you use contracts with customers, your insurer will probably want to see a sample to make sure you’ve included all the necessary safeguards to protect your business from claims and lawsuits. If you offer professional or other services but don’t have a contract, you may be required to draft one before receiving an estimate. 

Claims History

You will also need copies of your “loss runs,”. Which are the insurance term for the report that details all insurance claims made on behalf of your company. A three to five year claims history across all of your policies is typically required by insurance companies. If you are unable to obtain these reports from your current insurance agent, the quoting process will be significantly slowed down. Your insurance agent will be able to assist you in writing a letter to request these reports. 

Any Current Policies

Although it’s not required for a quote, having copies of your current policies on hand can help the insurance agent review your coverage and identify any potential gaps. The truth is that a lot can change in a year. It is possible that a policy review will serve as a prompt to either add or remove pieces of machinery, vehicles, etc.

2. Research

When was the last time you purchased something that needed to be assembled, but you chose to ignore the instructions? How did you determine that it was constructed properly? Unless you follow the steps, it is difficult to know for sure what the outcome will be. Obtaining the appropriate insurance for a small business is no different.

 

Reading the instructions isn’t nearly as interesting as learning about the different types of business insurance. Even though you might want to skip this step, spending as little as twenty to thirty minutes doing research could end up saving you a lot of time and money. You don’t need to become an expert. But having a fundamental understanding of the coverage options will help you make better decisions. Regardless of how long you’ve been in business, whether or not you seek the assistance of a professional. The first part of your research should be knowing the types of insurance available.

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Types Of Business Insurance

  • General Liability – For a smaller company, this can be a lifesaver in the event that you are sued for damages or injuries caused by a third party.
  • Errors and Omissions or Professional Liability – These policies can help a small company defend itself against claims of negligence or bad advice.
  • Group Insurance – Group insurance is a great way for small businesses to provide health care coverage and other medical benefits to your staff.
  • Workers’ Compensation – In the event of a workplace injury or illness, these policies will pay for the employee’s medical care, ensuring their safety.
  • Property Insurance – Coverage is good in the event that a company’s inventory or technological equipment are damaged or destroyed as a result of a natural disaster.
  • Commercial Auto – This covers any vehicles that your company uses for work.
  • Business Owner’s Policy – Small business insurance is a type of business insurance package that protects businesses from a variety of risks, including those associated with property and liability.

Every business has its own set of needs. Once you know the basics of business insurance, you should look into which ones are best for your business. For instance, an accountant who works from home might have a basic general liability policy. But an accountant who owns a building that customers come to would be better off with a business owners policy, or BOP, that covers more. Even though both accountants do the same job. There are differences in how they do it that affect their insurance needs.

3. Contact a Business Insurance Agent

You can work with an EZ agent who specializes in small business insurance to get the coverages you need. To work with our experts, you can get a free quote online. Talking to your insurance agent about your business can help you figure out what you need and how much coverage you need. They can help you figure out what kinds of coverage you can get and how much it will cost.

How To Determine The Business Insurance You Need

What kind of insurance is best for your business depends on your specific needs and the laws in your state and industry. You’ll need to carefully look at your business to figure out what kinds of insurance you need. Talking to an insurance expert is always a good idea if you want to find the right mix of coverage to make sure your business is legal and financially safe.

1. Analyze your legal responsibilities and business assets.

First, you should take a close look at your business and assets to figure out what you want to insure. What kinds of insurance are required by law, and where do your other responsibilities lie? For example, a machine shop might want to make sure its workers are covered in case they get hurt, while a jeweler might want to make sure they aren’t robbed. As required by law, the owners of a large distribution company would insure both their goods and their employees. Each state has its own rules, so make sure to talk to your agent to figure out what you need to insure.

2. Analyze Your Risk

Look at your new risks and responsibilities. This will help you figure out what kind of insurance will protect your business the best. For example, if your business is on the bottom floor of an office building in a flood-prone area. You’ll probably want comprehensive flood insurance. A business in a dangerous industry will probably want insurance to cover the risk of its employees getting hurt.

3. Decide How Comprehensive Your Coverage Needs To Be

Depending on what you’re insuring, you may need basic insurance or insurance that covers everything that could go wrong. Think about how much the loss would cost and how likely it is to happen. This will make it less likely that you will pay too much for coverage you don’t need or not get enough coverage for your safety.

How EZ Can Help

EZ can help whether you need group health insurance for your employees or commercial insurance to protect your business. Our agents work with the best insurance companies in the country to make sure you and your employees get the best insurance. In fact, we can find you the best coverage for your budget and save you hundreds of dollars a year. Call us at 877-670-3531 for help with group health insurance or 877-670-3538 for help with commercial insurance.

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The Beginners Guide To Worker’s Compensation

Do you know everything you need to know about Worker’s Compensation? It’s not a subject many people discuss at the dinner table, but it’s incredibly important to have when running a business in case someone is injured. A small thing like a loose nail or an unstable walkway could spell trouble. 

smiling worker in an office with a be happy sign
It’s easy to be happy when you know you’re covered!

Before an accident happens, it’s imperative for a business owner to understand the terms of Worker’s Compensation coverage, how to qualify as an employee, what it covers, and what it will cost you.

What Is “Worker’s Comp?”

This agreement states that as long as an employee receives wage replacement and medical benefits, the employee will not sue the company for negligence. Meaning, if you’re injured on site due to something workplace related, you’ll be covered for the amount of work you miss plus hospital bills. But, you cannot sue the company specifically for failing to take proper care. This protects employers and employees.

It’s state-mandated, and the particulars change based on your location. EZ.Insure’s agents are familiar with this information, local or not, so by calling us, you’re saving some time.

Good news is, safety regulations are solid nowadays. 

employees with talk bubbles asking about insurance
Your employee may have questions for you during this time. EZ.Insure will give you the knowledge to answer securely.

How Can Your Employee Qualify?

For an injured employee, there are only four checkboxes to qualify:

  1. You must be employed by the company.
  2. Your illness/ injury must be work-related.
  3. Your case must fall in state guidelines.
  4. The employer must have Worker’s Compensation insurance.

What Is / Is Not Covered by Worker’s Compensation? 

Workers Compensation insurance covers most workplace injuries, but you may be refused assistance if your injuries are self-inflicted, occurred during a crime, or if your actions during your sustained injury violated company policy. For example, if your employee happened to sustain an injury while robbing you, rest assured their injury most likely won’t be covered.

The injured employee doesn’t need to be injured “on-site” to be covered. Worker’s compensation can also come into place when your injury is sustained, and it’s job-related. This could be if your company plans a trip overseas for a meeting, and your employee happens to break a limb during the outing. 

When it comes to your medical expenses, you’ll find support with diagnosis and treatment. Depending on your state, it can also provide disability payments, rehabilitation, or retraining. 

This should provide ample cushion for your employees to recover and return to work.

What Are the Costs?

The average cost of a worker’s compensation claim is $38,000 (from 2005). This is a combined total of both the medical side and loss in productivity. That’s a down payment for a house or a mid-size car. 

For a company, the average cost per $100 in employee wage ranges from $0.75 to $2.74. It doesn’t seem that bad, but this does depend on the state. If you’re looking into getting this for your company, contact your local office to get specific information. 

Do Worker’s Compensation Costs Change Per Business Type?

cranes with people working on construction
Depending on what your company does is how much you’ll be quoted for worker’s compensation.

Depending on your company, the money outflow is going to fluctuate. For example, in the office building, your cost per $100 goes down to about $0.12. It doesn’t sound that bad, but it’s because injuries happen less often in this environment.

If you’re a painter or a landscaper, this average jumps up to $7-9/$100. You’ll have to take a look into the work you’re doing, and how it may affect an employee. Your business needs a strong hand with inside knowledge to provide you with the best quality insurance.

EZ.Insure has the experience to help you excel. Your agent will answer any questions you have, compare different plans for you, and even sign you up when you’re ready, free of charge and without having to worry about being hounded by endless calls. To get started simply enter your zip code in the bar above, or you can speak to an agent by emailing [email protected], or calling 888-350-1890. EZ.Insure makes the entire process easy, and quick.

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