How to buy business insurance online
When you are looking to insure your business, either for the first time or to replace existing policies, you can make great use of the power of the internet to buy your business insurance online, without needing costly services from third parties like brokers and agents.
Starting from the basics, it’s essential to understand that when you are managing any commercial business, it needs proper insurance to run smoothly.
Without it, you could be getting into uncharted legal and financial trouble.
The guiding principle should be, “it’s better to have insurance that you don’t need, than to need insurance that you don’t have!”.
You must cater for every possibility that the future can bring because events are unpredictable and can be costly if you do not have commercial insurance.
How online insurance works to make life easier
In the internet age, insurance companies have invested heavily in creating a presence for themselves where they can promote their policies. As well as advertising, they also can provide quotes that will lay out the exact terms and costs of the insurances you need.
Some of the better online business insurance websites give you guidance.
The offer a questionnaire, that advises what kinds of insurance you should consider, the levels of cover you may need based on many factors like your location, business type, size, turnover, number of employees and other particulars.
At the end of a short online session, you can come away with a detailed recommendation of what policies you should be considering, and a quote of how much it will cost you with that company.
The best thing is that you can also quickly get a bunch of quotes from competing insurance companies.
This is important not just so that you can compare prices. You can also learn more about what these expert companies recommend as the right insurance cover that a business of your type, and in your geographic location, needs.
You can also pick up essential tips about clauses, exclusions and conditions that insurance companies may be limiting their coverage with.
For example, suppose you are running a business that is in any way involved in the supply and serving of liquor.
In that case, some insurance companies put a disclaimer in their General Liability insurance policies. It states that you are not insured in any case when an injury or accident is caused by a person you served alcohol to.
Read much more about this on our special page that covers all the aspects of Liquor Liability insurance.
This is important if you run a business like one of the following:
- Event Planner
- Party Equipment Rental
- Home Staging
- Music Venues
- Personal Chef
- Wedding Officiant
In the rest of this article, we will try to outline the kinds of insurance that you should be looking for.
When you visit a typical website offering online business insurance cover, you will have to fill in a form that prompts you to identify these needs, along with your personal details that the insurance company will use for future communications and marketing.
Types of commercial business insurance you can find online
Commercial insurance is a general term for a batch of insurance products that businesses (commercial enterprises) need to protect their interests, investments and assets.
“Businesses” includes self-employed individuals, companies, and all other commercial enterprises that are offering goods and services to the public.
Commercial insurance is concerned with a business’ wish to protect the value of its investment in property, inventory, equipment, vehicles and all the other assets it has invested its capital and money in.
Liability insurance is concerned with a business’ legal duties to:
- Recompense any third parties who have been injured or damaged when that was caused by your business (general liability)
- Reimburse or recompense any customer that was damaged due to your business’s failure to meet some promises of performance (professional liability / E&O)
- Recompense or reimburse a customer if a product you supplied or sold failed or was not suitable for the purpose for which you used it (product liability)
Commercial Insurance – Types of Policies
Your business probably has invested capital in buying and maintaining physical assets like land, buildings and improvements, trading stock, equipment, autos and trucks etc.
Events like fires, storms, hurricanes and earthquakes, or man-made events like vandalism or theft can wipe out the value of these physical things, but still leave you with the responsibility of repaying the debt that you incurred when you acquired them.
Even when you don’t own the asset, like for rented offices or factories or leased vehicles, or inventory from suppliers on a ‘sale or return contract, your business needs to take out enough insurance to cover its value in case something happens to it.
Different types of commercial asset insurance
There are many different types of commercial insurance to investigate. Look for business insurance online websites that include some or all of these:
Commercial Property Insurance
Insurance protecting commercial real estate is perhaps the most important component of commercial insurance.
This is usually it is the highest value asset of any business, whether leased or owned.
Even if you operate a small business from a part of your home, you must take out separate commercial property insurance (or at least get your homeowner’s property insurer to endorse your private insurance policy).
Check when you are looking at what’s covered under the commercial insurance policy.
Many companies include office equipment, office furniture, computers, desks and filing cabinets etc., in your policy but some do not, requiring separate cover or a policy extension.
There are several additional coverages to look for in commercial property insurance, depending on your type of business, such as:
Equipment breakdown insurance
If you use specialized equipment like boilers, lathes, heavy machinery, and other types of equipment. Your business may be completely disrupted if a single machine breaks down, and this policy covers the consequential loss of revenue until work goes back to normal
Builder’s risk insurance
If your premises are undergoing repairs or extensions, this insurance covers costs related to damage to the building while under construction.
Business interruption insurance
Natural disasters can happen anywhere and anytime and can cause severe damage to your business property. As a consequence of that you may have to shut your doors temporarily.
Business interruption insurance can compensate you if this happens, so you can still stay viable in your business field.
If you rent the space of your business, then your office contents are not covered under the landlord’s commercial property insurance.
Commercial auto insurance is different from private vehicle insurance. Commercial vehicles are used more actively, so they are more susceptible to accidents every day and could be driven by additional drivers each time.
Then you search on the internet for vehicle insurance, the kind of cover that will pop up most frequently is for private autos, so be careful to specify that it’s a commercial vehicle. The amount of cover needed is usually much higher, especially for driver’s liability.
Equipment insurance is geared toward your specific kind of business activity.
If your business is using equipment located on your own premises, like Carpenter, Car Wash and Auto Detailing, Permanent makeup, Skate Shop, Tattoo Parlor, Bakery, Cabinet Maker, Engine Repair Shop, then you will need to look for policies that are protecting against fire, floods, storm damage and the other sorts of risk that equipment in a central location will face.
If your business requires you to move equipment around to customer workplaces,and leave it stored there unattended for longer periods of time, such as Solar panel contractor, Roofing contractor, Freelancer, Fence Installation, General Contractors, Plumbers, Painter, Electrician, Glazier, Concrete Contractor, Home Staging, Locksmith, Field Service Technician, Personal Chef, Irrigation Business, Window Cleaning, Sauna Installation, then you should be looking for online business insurance that emphasizes protection in case of vandalism, breakage in transport and theft.
Online business insurance for liabilities
Running any business creates the liability of injury or damage to third parties.
Therefore businesses of all sizes take out some form of general liability insurance.
General liability insurance
General liability insurance covers you against any claims made by the public in case of loss or damage to their property, personal injuries and even death. It’s commonly called “trips and falls” cover, because that is the most frequent kind of claim. Suppose someone (not your worker or staff member) trips on some object or obstruction left in the way or falls into an uncovered hole, and they suffer some injury or damage. Damage could be as simple as your customer tripping over your power cord while you are working, and suffering an injury as a result.
General liability claims can be big, involving thousands in minor property damage to as much as $1 million for serious claims involving personal injury or death. Apart from legal costs, general liability insurance also covers potential medical expenses in the event of physical harm to a third party.
Professional liability Insurance
Professional liability Insurance (also called E&O insurance) covers you against claims from customers that you made some mistakes, errors or omissions when you were performing your services. It is essential for any business performing work that comes with some form of guarantee, either explicit or implicit.
Businesses like Solar panel contractors, Roofing contractors, Dog walkers and pet sitters, Freelancers, Fence Installers, General Contractors, Plumbers, Swimming teachers, Dance Instructors, Painters, Electricians, Glaziers, Software Developers, Carpenters, Groundskeepers and Landscapers, Event Planners, Party Equipment Rentals, Concrete Contractors, Car Wash and Auto Detailing, Errand services, Home Staging, Estheticians, Body Sugaring, Permanent makeup, Locksmiths, Field Service Technicians, Truck Driving Schools, Tattoo Parlors, Pressure Washing, Sauna Installation, Cabinet Makers and Engine Repair Shops all have a ‘duty of care’ that the services they provide will be correct and what they advertised or promised.
A customer may claim that you performed your services without the required care, diligence or skill level, or that the service was not what they hired you to do.
If this case goes to court, the cost of defense can be extremely high, and you may have to pay for the whole defense yourself even if you don’t lose.
Product liability insurance
Product liability insurance is needed when you are supplying parts or replacements to your customers as part of your services.
Businesses such as all the ones we listed above that need professional liability insurance will need product liability cover as well if any part of their service involves supplying or fixing parts. As well, businesses like Photographers, Perfume Stores, Fabric Stores, Bookstores, Flower Shops, and Bakeries are selling products and so need this cover.
Worker’s Compensation insurance
In most states, it is legally required to have worker’s compensation insurance if a business has more than a state-set number of employees.
Workers compensation insurance covers your business against any costs that arise if any employees are injured while on the job or get sick due to the work.
What can you expect online business insurance to cost?
The cost of commercial insurance varies and depends mainly on the type of business you operate, and the type and limits on the coverage limit you opt for. The higher the number, the higher the cost of your insurance premiums.
Insurance companies will use their own proprietary formulas when preparing an online quote. Each company has its own formula, so don’t be surprised if their quotes are different – it doesn’t mean that one is automatically better than another.
We provide two very general guidelines to the levels of cover you should consider and the annual premiums you can expect to pay.
They depend on whether your main business style is to work in a central location (a shop, factory or workhouse) or mainly on customer sites. The following are the general levels of cover recommended for these kinds of businesses, with rough estimates of the range of expected costs for annual premiums:
|Insurance type||Basic level of cover||Expected range of annual premium|
|General Liability||Workshops: $10 million full year, $2 million for a single claim||$1300 – $2000|
|Worksites: $1 million full year, $250,000 for a single claim||$700 – $950|
|Professional Liability (Errors & Omissions)||Workshops: $1 million full year
$250,000 single claim with $2000 deductible*
|$1200 – $2100|
|Worksites: $250,000 full year, $50,000 for a single claim with $500 deductible*||$600 – $1000|
|Product liability insurance||Workshops: $1 million for the full year, $250,000 single claim with $2000 deductible||$800 – $1000|
|Worksites: $50,000 full year, $10,000 for a single claim with $500 deductible*||$400 – $600|
|Commercial auto insurance||Based on replacement cost of the vehicle, plus state-set third-party accident insurance cost||$1350 – $2300 per vehicle|
|Commercial property insurance||Calculated on insurable value (IV)||$0.45 – $0.55 per $100 IV|
The deductible amount you agree to is a way to reduce your premiums. It means you agree to pay this amount first, before the insurance company has to pay anything. You can stipulate this amount when asking for an online quote from the insurance company.