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General liability insurance protects your small business from claims of property damage or bodily injury. It covers things like slips and falls on your premises, damage from a fire started by your equipment, or harm caused by a product you sell or make.
Why You Need It
As a business owner, you face risks every day that could put you in legal and financial jeopardy. General liability insurance helps ensure you're covered in case the unimaginable happens.
It protects your personal assets. Without coverage, plaintiffs could go after your home, savings, and other possessions to satisfy a claim.
It's often required by law or to work with other businesses. Many cities mandate minimum coverage, and contractors frequently need it to work on customer sites.
It gives you peace of mind. You have enough to worry about running your business let insurance handle legal claims so you can focus on what you do best.
How Much Do You Need?
The amount of coverage you need depends on the size of your business and the level of risk. As a rough guide:
Low risk: $1 million per occurrence, $2 million aggregate. For professional services or retail stores.
Medium risk: $2 million per occurrence, $4 million aggregate. For restaurants, contractors, manufacturers.
High risk: $5 million per occurrence, $10 million aggregate or higher. For medical, construction, or hazardous operations.
Navigating Workers Compensation Insurance Requirements
As a small business owner, navigating workers compensation insurance requirements can be complicated. Each state has its own laws regarding workers comp, so you’ll need to check with your state’s workers compensation board to determine precisely what coverage you need. In general, though, here are the basics you should know:
Be aware that workers comp rates are based on several factors, including:
Your business’s claims and accident history. Fewer claims can mean lower premiums.
The type of industry and specific job duties. More hazardous jobs mean higher rates.
Number of employees and total payroll. More employees and higher payrolls translate to increased premiums.
Tips for Finding Affordable Coverage Options for Small Business Owners
Here are some tips to help you locate good deals on general liability and workers comp policies.
1. Compare Quotes From Multiple Providers
Don’t go with the first insurer you find. Compare quotes from at least 3-5 companies to make sure you’re getting the best rate.
2. Consider Bundling Policies
If you need other types of insurance like business property or commercial auto, check if bundling them together can save you money.
3. Adjust Your Coverage and Deductibles
Look for ways to lower your premiums, such as choosing a higher deductible. A deductible is the amount you pay out of pocket before coverage kicks in. Doubling your deductible from $500 to $1000 could reduce your policy cost by up to 25%. You can also drop unnecessary types of coverage or lower certain limits. But make sure you still have adequate protection for your business needs.
4. Ask About Discounts
Don’t leave money on the table by missing out on savings opportunities. Inquire about common discounts like bundling, loyalty, early renewal, paperless billing, etc.
Conclusion
With some time and patience, you can locate general liability and workers compensation insurance for your small business that won’t break the bank. Compare quotes, bundle when possible, make strategic coverage adjustments, and always ask about available discounts.
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