What is a Business Insurance

(Your Essential Safety Net)

Business Insurance, also known as Commercial Insurance, encompasses a variety of coverage types designed to protect your business from liabilities, property damage, and other risks. Whether you run a Small business, are self-employed, manage an LLC, or operate a home business, the right insurance can safeguard your operations. Here’s what it can cover:

• Small businesses
• Self-employed individuals
• LLCs
• Home-based businesses
• Various other business types

Insurance for small businesses acts as a financial safety net, helping to cover unexpected costs following an accident or mistake involving your customers, employees, or business assets.

Here’s how it works:

1. You pay a predetermined amount for your insurance coverage, known as your premium.
2. In return, your insurance can help cover expenses after a covered incident or error.

Why Your Business Needs Insurance

Commercial insurance is vital for shielding your business from financial setbacks due to various insurable risks. Without it, an accident or professional error could jeopardize your business’s survival and profitability.

This is a significant concern, especially considering that the average cost of a premises liability lawsuit exceeds $50,000.

In certain instances, business insurance is legally required. For example, most states mandate workers’ compensation insurance if you have employees. Additionally, some states have specific requirements for obtaining business licenses, such as for general contractors or electricians.

Types of Business Insurance

Business insurance involves selecting a package of different coverage types, tailored to your operations and potential risks. Here are some common types:

General Liability Insurance: Often the first policy business owners purchase, it helps cover costs if you or an employee accidentally damage someone’s property or if someone (other than an employee) gets hurt.

Professional Liability Insurance: Also known as errors and omissions (E&O) insurance, this covers professional mistakes and is common in professional services.

Workers’ Compensation Insurance: Covers medical expenses and lost wages if an employee is injured on the job. It’s usually required by state law if you have employees, but you can also opt for voluntary coverage for business owners.

Commercial Property Insurance: Protects physical items essential to your business. It helps cover replacement costs if your business property is damaged by events like water, fire, wind, or vandalism. Combining this with general liability insurance in a business owner’s policy (BOP) can be more cost-effective.

Commercial Auto Insurance: For business owners who own or drive vehicles, this covers damages from auto accidents while driving for business.

Transportation and Truck Insurance: Essential for businesses that rely on transportation and trucking. This coverage can help pay for damages or losses involving commercial trucks and other vehicles used for transporting goods.

Some specialized insurance types cater to specific industries. For example:

• Product Liability Insurance: Protects against legal fees if a customer claims an issue with your product caused injury or property damage.
• Liquor Liability Insurance: Provides financial help for restaurants if they serve alcohol to someone who then causes injury or damage.
• Tools & Equipment Insurance: Helps construction and cleaning businesses repair or replace tools and equipment if they are stolen or damaged beyond normal wear and tear.

Estimating the Cost of Business Insurance

Business insurance costs vary widely based on several factors unique to each business. Here are some key determinants:

1. Number of Employees: Your payroll and employee count can impact your insurance costs, especially for workers’ compensation.
2. Location: Where you operate and the number of locations can affect your risk exposure and insurance costs.
3. Industry: Professions involving heavy equipment, expensive property, or dangerous environments typically have higher insurance costs compared to less risky professions.
4. Scope of Operations: For example, a fitness instructor offering private lessons might pay less for general liability insurance than one offering public classes. Similarly, restaurants serving alcohol might pay more for liquor liability coverage.
5. Experience: Established professionals with years of expertise may pay less for coverage due to their lower perceived risk compared to newer professionals.

You can get a quick estimate of your business insurance costs using Safe Insurance’s calculators:

• General liability calculator
• Professional liability calculator
• Workers’ compensation calculator
• Property insurance calculator

Why Choose Safe Insurance?

As a subsidiary of Safe Harbor Insurance, Safe Insurance is dedicated to serving small businesses and the self-employed. We provide simple, affordable coverage tailored to your needs, ensuring you stay protected, comply with legal requirements, and offer proof of insurance to your customers.

Whether you’re a contractor, restaurant owner, retailer, or just starting a side hustle, Safe Insurance has you covered. We currently protect over 500,000 small business customers with customized commercial insurance packages for various business structures, including:

• Sole proprietorships
• Self-employed individuals
• LLCs
• Home-based businesses

Let us help you secure the right coverage for your business’s unique needs.