Basic Business Insurance: Liability, Cost & Quotes from $7

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Accidents are inevitable. As a business, you ought to have comprehensive insurance in the event that there is an accident in the workplace. It would be best if you had basic business insurance, ensuring that your business and its proprietor are not left vulnerable.

Seeing that as a small business owner, you have likely put your personal finances at risk, especially if it is a sole proprietorship; basic business insurance coverage protects said investment and other assets and pays for any unexpected legal liabilities.

Also read:

• One Day Business Insurance: Liability, Cost & Quotes From $3
  

Basic Business Liability Insurance  

Basic liability insurance for small businesses protects the financial interests of the company and its owners in the event that they face formal lawsuits or third-party claims. Think of it as simple liability insurance covering any direct financial liabilities the business might incur, including legal defense expenses. 

There are three main types of business liability insurance. These include basic general liability insurance, professional liability insurance, and product liability insurance. 

Basic General Liability Insurance 

Insurance companies offer basic general liability insurance. The function of a basic general liability insurance is to cover the following:

• Third-party personal injuries-A basic general liability insurance will cover medical expenses if your business operations caused personal injuries and affected parties decide to file a claim 

• Third-party property damage-Your basic general liability insurance will reimburse the losses of third parties who experienced property damage because of your business operations 

• Legal expenses-General liability insurance ensures that you get adequate defense when someone files a personal injury claim or property damage claim. Particularly, you can use this insurance to cover attorney fees, administrative costs, settlements, and other related expenses

How much coverage can you get from basic general liability insurance? General liability insurance provides $1 million - $2 million you can use to cover personal injury claims and property damage claims. But note that some insurance companies underwrite basic general liability insurance providing $300,000 - $500,000 coverage. 

You will find insurance companies that allow you to upgrade the amount of coverage general liability insurance provides. That said, it’s possible for your business to be covered by general liability insurance having $3 million - $5 million coverage. 

Note that your basic general liability insurance can be added with the following optional policies:

• Liquor liability insurance-You can add liquor liability coverage to a basic general liability insurance if your business sells alcoholic drinks

• Rented premises liability coverage-This is available if your business is renting or leasing a commercial space to operate. The function of rented premises liability coverage is to reimburse the property owner if his or her commercial space becomes damaged by fire due to your fault

• Advertising injury coverage-Advertising injury coverage will cover legal expenses if you’re sued for slander, libel, copyright infringement, and other types of reputational or advertising harm

• Products and completed operations coverage-Products and completed operations coverage will take care of costs when a delivered product or service caused personal injuries or property damage to a customer

Basic Professional Liability Insurance 

Insurance companies will offer basic professional liability insurance if your business provides a particular service to make money. While giving a service, you or an employee might commit mistakes and this will result in the client’s financial or economic losses. Professional liability insurance protects you against this peril by covering attorney fees, administrative costs, compensatory payments, and other related expenses. Note that professional liability insurance doesn’t only cover mistakes, it will also kick in when your business committed or allegedly committed:

• Negligence

• Misrepresentation

• Violation of good faith

• Violation of fair dealing

• Breach of confidentiality

• Missed deadlines

• Other acts considered errors and omissions 

Basic Product Liability Insurance 

A basic product liability insurance will be very crucial if your business manufactures or sells food, clothing, and other consumer goods. This insurance will cover attorney fees, administrative costs, settlements, and other legal expenses if a customer holds your business liable for a product having:

• Manufacturing defects

• Labeling errors

• Design errors

If you’re a food business, then basic product liability insurance can help with food poisoning claims. But still, this depends on where you bought the coverage. Some insurance companies automatically include foodborne illness coverage in their product liability insurance. As for others, their basic product liability insurance doesn’t have foodborne illness coverage and must be endorsed or added with one to cover food poisoning claims. 

Basic Commercial Auto Insurance

Your business must purchase a basic commercial auto insurance if it’s using an automobile, pickup, motorcycle, truck, or any other vehicle to deliver goods, fetch raw materials, or take employees to project sites. A basic commercial auto insurance will offer the following:

• Auto liability coverage-When your business’s vehicle causes an accident, auto liability coverage will cater to the medical expenses of injured third parties. This will also pay third parties who had their property damaged by your commercial vehicle 

• Physical damage coverage-You can use physical damage coverage when your commercial vehicle incurs damage. This is available in two forms-collision and comprehensive. Comprehensive physical damage coverage will cover repair or replacement expenses if fire, vandalism, theft, hail, winds, and other covered perils damage your commercial vehicle. On the other hand, collision physical damage coverage will cover repair or replacement costs if your commercial vehicle got damaged after crashing into an object or another vehicle 

A basic commercial auto insurance is already enough provided that you’re running a small business venture. Nonetheless, insurance companies can add more protection to your commercial auto insurance, namely:

• Rental reimbursement coverage-Rental reimbursement coverage will recoup lease or rental expenses if you need to hire another commercial vehicle because the one that you own is being repaired 

• Motor truck cargo insurance-You can add motor truck cargo insurance to commercial auto insurance if your business delivers materials and goods for clients. This will cover expenses if the materials or goods you’re entrusted to deliver become damaged or lost during the trip

• Emergency roadside assistance coverage-This add-on to commercial auto insurance will reimburse your expenditures on towing, battery jump-start, tire replacement, tire delivery, and other roadside assistance services 

• Uninsured/underinsured motorist coverage- Uninsured/underinsured motorist coverage will take care of expenses if you get involved in an accident and the driver at fault has no insurance or doesn’t have adequate insurance

Basic Commercial Property Insurance Coverage  

Suppose your business rents the commercial real estate property from where you operate. In that case, you will require basic commercial property coverage, which will protect you against liability in the event that the property is damaged by fire, mold, floods, or other unexpected occurrences. 

Your business rents, owns, or leases the commercial property used for business operations. This is why it’s important for you to purchase a  basic commercial property insurance. Commercial property insurance covers:

• Building damage-When your business’s building is damaged by fire, theft, vandalism, and other covered perils, commercial property insurance will recoup losses up to the amount stated on its terms

• Building destruction-Commercial property insurance will cover reconstruction expenses if your business’s building is destroyed by fire or extreme weather. The amount you’ll receive will be equal to the actual cash value or replacement cost of the covered building 

Note that insurance companies allow you to add the following to your basic commercial property insurance:

• Stocks and contents coverage-This will recover losses if valuables, not considered as business equipment and tools, become damaged or lost while in the business premises due to fire, theft, vandalism, and other covered perils 

• Business equipment and tools coverage-Business equipment and tools coverage will recoup the capital you used to buy or make the equipment and tools essential for making products or delivering a service

Basic commercial property insurance might also include coverage for mold. However, this is often subject to very low sub-limits. Another thing, this doesn’t apply to all insurance companies. Some carriers underwrite a basic commercial property insurance that must be added with limited fungi coverage to take care of molds. 

Basic Workers Compensation Insurance 

Purchase basic workers' compensation insurance as soon as your business has one or more employees. Failure to get this coverage will result in stiff fines and penalties subject to the existing labor laws and penal laws of the state you’re in. A basic workers' compensation insurance takes care of the following:

• Medical treatment/procedure-Workers compensation insurance will cover surgeries, therapies, and other medical treatments/procedures if an employee sustains a work-related injury or disease 

• Hospitalization-You can use workers' compensation insurance to cover your employee’s hospital bills

• Medication-By having workers' compensation insurance, you can easily buy the medicines an employee needs to quickly recover from a work-related injury or disease

• Rehabilitation-Workers compensation insurance will pay for rehab if your employee experiences an impairment of bodily functions after sustaining a job-related injury or disease

• Lost income compensation-You can use workers' compensation insurance to cover an employee’s lost wages

• Death benefits-If an employee dies from a work-related injury or disease, workers compensation insurance will take care of funeral expenses. It will provide an allowance to dependents too

Basic Business Insurance Cost 

Your business's perceived risk levels will often determine the average cost of basic business insurance. For instance, if you are in the construction industry, you will require basic business insurance for all the heavy equipment and dangerous machinery you need for your business. This should attract significantly higher premiums than a business within the service industry. 

Expect to pay $30 per month or $360 per year for a basic general liability insurance providing $1 million in coverage. 

Overall, businesses that are considered to have lower risks will have cheaper basic business insurance policies. What's more, it would be better to get a  BOP that combines general liability and commercial property insurance. A basic BOP policy is often more cost-efficient than buying commercial property and general liability insurance separately as it includes a bundle discount, and sometimes contains further coverage.

To have more idea about basic business insurance cost, take a look at this table showing the rates of the best basic business insurance companies:

Compare quotes to find the best basic business insurance. Click the "Get Quotes" button on this page and differentiate the offers and rates of the most recommended carriers in the USA.