Small Business Insurance for LLC: Types, Costs, and Quotes Explained

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As an LLC, you're already taking a big step towards protecting your personal assets. The next step is to get the right insurance coverage for your business.

General Liability insurance is a must-have for most small businesses, covering damages to customers or third parties. This type of insurance typically costs between $300 to $1,000 per year.

Having the right insurance coverage can give you peace of mind and financial protection. For example, if a customer slips and falls in your store, General Liability insurance can help cover the costs of medical expenses and potential lawsuits.

You can expect to pay around $500 to $1,500 per year for a comprehensive Business Owners Policy (BOP) that includes General Liability and Property insurance.

Types of Policies

Business insurance policies can vary depending on the type of business and who it serves. GEICO offers business insurance coverage for almost any business, including liability coverage, commercial vehicle insurance, and even cyber liability insurance.

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Two coverages you need, combined in a single policy, are bodily injury or property damage and defense costs for covered liability losses. This is often referred to as a combined policy.

Here are some common types of policies:

  • Liability coverage: protects against lawsuits for injury or damage
  • Commercial vehicle insurance: covers damage to vehicles used for business
  • Cyber liability insurance: protects against cyber attacks and data breaches

Policy

General Liability policies are a must-have for small businesses, as they provide protection against claims of bodily injury or property damage.

A standard General Liability policy can help pay for medical expenses and attorney fees that you're legally responsible for, but it doesn't cover injury to yourself or your employees.

If you have business property like contents, inventory, or a storefront, a Business Owners Policy (BOP) might be a better fit for you. This type of policy combines third-party liability coverage with damage to business property, defense costs, income loss, and more.

A BOP policy can cover a wide range of scenarios, including a customer tripping on an uneven front step, an employee accidentally harming a customer's property, or a break-in at your business property.

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Here are some key differences between a General Liability policy and a BOP policy:

  • General Liability: Covers third-party liability, but not damage to your own property.
  • BOP: Covers both third-party liability and damage to your own property.

Business insurance can vary depending on the type of business and who it serves. Some policies may include coverage for bodily injury or property damage, defense costs, business furniture and equipment, and more.

Professional Liability Insurance (PL), also known as Errors & Omissions (E&O) insurance, is a type of liability insurance that covers your small business for failure to uphold contractual promises in mostly service-based professions.

If you have employees, you're required by law in most states to carry Workers' Compensation insurance, which covers their medical expenses, lost wages, and rehabilitation services if they're injured at work.

Here are some key types of business insurance policies:

  • General Liability
  • Business Owners Policy (BOP)
  • Professional Liability (PL)
  • Workers' Compensation
  • Professional Liability Insurance (PL)
  • Errors & Omissions (E&O) insurance

Commercial Auto

If your company owns vehicles that are used as a part of your job, you'll need Commercial Auto Insurance.

Commercial Auto Insurance is a must-have for businesses that rely on vehicles for their daily operations. This type of insurance provides financial protection against accidents or damages to company-owned vehicles.

If you're unsure whether your business needs Commercial Auto Insurance, consider the types of vehicles your company owns and how they're used.

Cyber Liability

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Cyber Liability is a type of insurance that protects businesses from computer-related attacks.

This policy covers various types of risks, including mistakes or advice your company makes in business, legal defense costs, and services completed. It's essential to have this coverage if you're concerned about the potential consequences of these risks.

To qualify for Cyber Liability insurance, consider the following factors:

  • The vehicle is used to transport goods or people
  • The vehicle is used to perform a service
  • Employees drive the vehicle

You can also contact (800) 448-8244 to get a quote and learn more about this type of insurance.

Choosing the Right Policy

Choosing the right policy for your small business insurance can be overwhelming, but it's essential to protect your LLC from various risks. Your business doesn't need every type of policy, but it likely needs more than one to cover multiple areas of liability and the properties you own.

You may need additional policies if you own a building or property, operate a business out of your home, or use a vehicle or watercraft for commercial purposes. You also need to consider factors like having employees, operating in a high-risk area, or providing a professional service based on expertise.

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Here are some key factors to consider when choosing a policy:

  • You own a building or other property, such as furniture and office equipment.
  • You operate a business out of your home.
  • You use a vehicle or watercraft for commercial purposes.
  • You have employees.
  • You operate in an area at risk of tornadoes, hurricanes, flooding, fire, or theft.
  • You provide a professional service based on expertise.
  • You manufacture or sell a product.
  • You don’t have cash reserves to weather temporary business closure.
  • You operate in a particular industry, such as nuclear, finance, farming, or medicine.

Choosing the Right Policy

A Business Owners Policy (BOP) is a more comprehensive option that protects both your business and property in one package, typically combining General Liability and Property Insurance.

General liability insurance can help provide financial protection if an accident occurs at your business, such as a customer injury or damage to someone's property.

You need a BOP because a General Liability policy does not protect you from your own property, making it essential for small business owners.

General liability insurance covers property damage to items that don't belong to you, so if you accidentally break a client's window, your insurance will cover repair expenses up to your policy limit.

Workers' compensation insurance can help pay for medical care and lost wages after a workplace injury, and it's almost always required if you have employees.

Commercial auto insurance provides coverage if you're involved in an accident in a business-owned vehicle, and it can also provide coverage for accidents in your personal vehicle while it's being used for work-related purposes.

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If your office is destroyed in a fire, property insurance can help with replacement costs or repairs, and it can also help with the loss of business income while you get back up and running.

Professional liability insurance can help provide the financial protection you need to defend your company if you make a mistake or a customer lodges a claim against you.

How to Choose

Choosing the right policy for your small business can be a daunting task, but it's essential to get it right. Your business needs to be protected against financial harm in case of unexpected events.

The type of coverage your business needs depends on several factors, including the type of business you perform, how you operate, and where you're located. Every business owner should invest in general liability insurance to protect against financial harm in case a customer, client, or member of the public sues you for damage or injury.

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You may need additional policies if you own a building or other property, operate a business out of your home, or use a vehicle or watercraft for commercial purposes. You also need to consider if you have employees, operate in an area at risk of natural disasters, or provide a professional service based on expertise.

Here are some factors to consider when choosing your policy:

  • You need to own a building or other property.
  • You operate a business out of your home.
  • You use a vehicle or watercraft for commercial purposes.
  • You have employees.
  • You operate in an area at risk of natural disasters.
  • You provide a professional service based on expertise.
  • You manufacture or sell a product.
  • You don't have cash reserves to weather temporary business closure.
  • You operate in a particular industry, such as nuclear, finance, farming, or medicine.

Speaking with an insurance agent about your business is the best way to understand which areas of coverage you need to protect your business.

Choose Your Type

Choosing the right policy for your business can be overwhelming, but it's essential to get it right. You need to consider the type of business you have, how you operate, and where you're located.

The type of coverage your business needs depends on several factors, including what kind of business you perform and how you operate. Your business likely needs more than one policy to cover multiple areas of liability and the properties you own.

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You may need additional policies if you own a building or other property, operate a business out of your home, or use a vehicle or watercraft for commercial purposes. You also need to consider if you have employees, operate in an area at risk of natural disasters, or provide a professional service based on expertise.

Here are some specific scenarios where you may need additional policies:

A Business Owners Policy (BOP) may be a good fit for you if you have business property like contents, inventory, or a storefront. It combines third-party liability coverage with damage to business property, defense costs, income loss, and more.

Business insurance can vary depending on the type of business and who it serves. For example, if you're a personal trainer or IT consultant, you may need Professional Liability Insurance (PL) or Errors & Omissions (E&O) insurance to protect yourself from claims of negligence or errors.

Frequently Asked Questions

What is the limit of liability insurance for a business?

Business liability insurance typically has two limits: per-occurrence, which covers individual incidents, and aggregate, which covers total incidents per policy period

How much is a $2 million dollar general liability insurance policy for a business?

A $2 million general liability insurance policy for a business typically costs around $30 per month in premiums. This affordable coverage can provide significant protection for businesses against unexpected losses and lawsuits.

What is the best insurance for small business owners?

For small business owners, a Business Owner's Policy (BOP) is often the best insurance option, combining property and liability coverage in one customizable policy. This makes it a great choice for businesses of any size, offering flexibility and protection.

How much does a $1,000,000 liability insurance policy cost?

The average cost of a $1 million liability insurance policy is around $500 per year, with some customers paying as little as $30 per month. However, costs can vary depending on individual circumstances.

What is the difference between limited liability and general liability?

Limited liability insurance safeguards a business owner's personal assets, while general liability insurance protects the business itself. This key distinction affects how your personal and business finances are protected in case of a claim.

Helen Stokes

Assigning Editor

Helen Stokes is a seasoned Assigning Editor with a passion for storytelling and a keen eye for detail. With a background in journalism, she has honed her skills in researching and assigning articles on a wide range of topics. Her expertise lies in the realm of numismatics, with a particular focus on commemorative coins and Canadian currency.

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