Business Insurance

Why Do I Need Business Insurance?

Business insurance is a crucial component of running a small business, offering protection against unexpected events that could financially harm your company. Here are the key reasons why it’s important:

Even if you haven’t made a mistake, your business could face claims or lawsuits. For example:

• Slip and fall incidents: A customer or visitor could get injured on your premises, and you could be held liable for medical costs and damages.
• Client disputes: A client could allege that you didn’t meet the terms of a contract, leading to a legal battle.
• Product-related claims: If your product causes harm or injury, you could face a lawsuit even if the product was properly designed and marketed.

Business insurance covers the costs of legal defense, settlements, and damages that arise from such claims, protecting your business from financial strain.

Some industries require specific types of insurance, including:

• Healthcare professions: Many healthcare providers, such as doctors, nurses, and therapists, are required to have professional liability insurance (sometimes called malpractice insurance). This protects against claims of negligence, errors, or omissions in the services provided.
• Contracts and partnerships: If your business is working with other companies or clients, the terms of a contract may stipulate that you carry certain types of insurance (like general liability or workers' compensation) to minimize risk.

Without insurance, you could be financially vulnerable if something goes wrong. Legal fees, medical bills, and the cost of replacing or repairing damaged property can quickly exceed what you can afford out-of-pocket. Insurance gives your business the financial security to recover from such setbacks without closing down or going bankrupt.

Running a business is risky, and managing that risk effectively is essential. Business insurance provides peace of mind, knowing that you're protected against unforeseen events that could otherwise have devastating consequences on your operations.

Having proper insurance demonstrates to clients, partners, and employees that your business is professional, responsible, and committed to mitigating risks. It can even make it easier to secure contracts or partnerships, as many businesses and clients require insurance as a sign of trustworthiness.

While it’s easy to put off getting business insurance, it’s an essential safety net that safeguards your business from unexpected events, legal claims, and financial risks. Having the right coverage is not just about compliance or risk management; it’s about ensuring your business has the support it needs to thrive, even in difficult situations.

How Much Does Business Insurance Cost?

The cost of business insurance can vary significantly based on several factors, including:

• Risk Level: Some industries are riskier than others and require higher coverage. For example, businesses in construction or manufacturing may face higher premiums due to the increased risk of accidents, while retail businesses may have lower insurance costs.
• Specific Coverage Needs: Certain industries may need specialized coverage, such as professional liability insurance for healthcare providers or errors and omissions insurance for tech businesses, which could also affect premiums.

• Revenue and Number of Employees: The size of your business—whether you're a sole proprietor or a large company—affects the cost of your insurance. Larger businesses with more employees typically face higher premiums due to increased liability exposure.
• Property and Assets: If your business owns significant property, equipment, or inventory, this can raise your premiums because there’s more to protect.

• General Liability: This is the most basic form of coverage, and it tends to be more affordable. On average, small businesses pay around $30 a month for a general liability policy. This coverage protects against claims of bodily injury, property damage, and personal injury.
• Workers' Compensation: The cost of workers' comp insurance depends on the number of employees and the type of work they do. For example, a business with employees who work in high-risk environments, such as construction or manufacturing, will pay higher premiums than a business with office-based employees.  This insurance is only offered by the state in Washington.
• Professional Liability (Malpractice Insurance): Professionals like doctors, lawyers, and consultants need this coverage. It costs more than general liability due to the higher potential for lawsuits.
• Commercial Property Insurance: Covers your business property (such as buildings, inventory, and equipment) in the event of damage or theft. Costs can vary widely based on the value of your property.

• Local Regulations and Risk Factors: Insurance premiums can also be influenced by where your business is located. For example, businesses in areas prone to natural disasters (e.g., floods, earthquakes) may face higher premiums. Additionally, some regions may have stricter insurance requirements that could affect costs.

• Previous Claims: If your business has a history of frequent insurance claims, your premiums may be higher. Insurers typically view a history of claims as an indicator of future risk.
• Credit Score: Insurers may also check your business’s credit score when determining your premium. A lower score can indicate higher risk, leading to higher costs.

• Higher Limits: The higher the coverage limit, the more expensive your insurance will be. Small businesses often choose lower limits to keep premiums affordable, but this can leave you more exposed to financial risk.
• Lower Deductibles: If you opt for a lower deductible, your premiums will be higher, but you'll pay less out-of-pocket when a claim is made.

• General Liability Insurance: $30 to $50 per month (approximately $360 to $600 annually)
• Professional Liability Insurance: $50 to $150 per month (depending on the business type and risk level)
• Workers' Compensation: Varies widely depending on the state and type of work. Small businesses can expect to pay $0.75 to $2.74 per $100 of payroll.
• Business Owners Policy (BOP): A bundled policy that typically includes general liability, property insurance, and business interruption coverage. Costs range from $500 to $1,500 annually, depending on the coverage and size of the business.

You can get a quote for business insurance tailored to your business by considering the factors mentioned above.  The Norton Insurance Agency works with several insurers and we can help you find the best coverage for a reasonable price.

The type of business you have dictates the insurance coverage you need. Here's a quick breakdown:

1. General Liability Insurance: Essential for most businesses, especially if you interact directly with clients. It protects against claims for bodily injury, property damage, or accidents that might occur on your premises or during business operations.
2. Professional Liability Insurance: Crucial if you provide advice, services, or expertise. It covers claims of negligence, errors, or omissions in the services you provide.
3. Business Owner's Policy (BOP): A good option for businesses that have physical assets like computers, tools, or inventory. A BOP combines general liability insurance with property coverage, often at a more affordable rate than purchasing both separately.

Each type of insurance is tailored to the specific needs of your business, so choosing the right combination helps safeguard your operations against potential risks. Contact so we can help you find the Insurance you need.