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Small Business Insurance Coverage Basics
The purpose of small business insurance coverage is so that a business can transfer a risk that they can afford, for example an insurance payment once a month, for a risk they cannot afford, which would be a lawsuit claim against their company.
A small business normally brings in an attorny and accountant when just starting off to set things up correctly. They also need a small business insurance agent to help in that aspect also and just as important. A lot of times it makes it easier if they can combined all their insurances with one company. Many insurance companies give very good discounts when you combine your plans and have everything with the one insurance company.
Small business Insurance Coverage is not only a neccesity as we have said, but it will also assist in others ways also. Just having the insurance can open up doors and relationships with certain other small business that you might not have had if you didn’t have complete insurance coverage.
Many businesses feel comfortable starting a business relationship with other businesses who are fully insured and can prove it, this provides them with a secure feeling about your business, something that money cannot buy.
For example a business real estate firm will sometimes only lease to other small businesses with complete coverage as to protect their assest which is the land and building. Small business Insurance coverage is not always cheap but it is an investment that you and your business should never do without.
What is a good estimate for small business insurance?
I am working a project for my MBA class. I am organizing a small business for the project. It’s a cooperative of specialty poultry producers. The cooperative markets the poultry to local major retailers and transports end products (after processing, packaging and storage to retailer DC’s). I need a quote for general liability insurance and insurance on a small refrigerated truck (driven by someone with a pristine record). I need annual premium estimates that coincide with an exact policy amount – the least possible please! Online insurance quoters are not working.
Nope, you can’t buy that type of insurance online.
And you missed a whole bunch of very crucial information and coverages.
“Small” is in the eye of the beholder. You need GL with product liability, workers compensation, cargo coverage (for your stock), and that commercial auto policy – which will vary wildly, depending on the exact coverages and how far you drive.
SO. The GL is going to be rated on gross sales. You can figure, with a food product and retail marketing, you’ll be required to carry at least $1,000,000 GL, but you’ll ALSO be required to carry at least $2,000,000 excess liability. You PROBABLY want recall coverage, but hey.
Assuming gross sales is around $500,000 a year (very, very low), your GL is probably going to run you around $7500, and the excess/umbrella about $6,000. The workers comp is going to run you another $5K at least – maybe more. The truck coverage, assuming no coverage for the truck, commercial class code, under 250 mile radius, liability only (again, you’ll need the $1,000,000 to go on premises to deliver) is probably going to run you around $4K. Stock coverage, is probably going to run you around $2500 for not more than $25,000 of chicken at one time.
Want refrigeration breakdown/spoilage coverage? That will cost more.
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