Creative Agencies Need Business Insurance

Company insurance is intended to safeguard the financial assets of a business owner and is a necessary investment for a creative agency.

This article will discuss the primary insurance coverage for creative firms, general liability insurance, as well as additional products that are appropriate for this industry.

Creative Agencies Need General Liability Insurance

Every firm, regardless of sector, has risks that should be insured. General liability insurance is the most frequent and comprehensive form of coverage that company owners purchase.

General liability insurance covers the following risks:

Physical harm

Damage to property

Medical expenses

Legal defence and decision

Personal and commercial harm

While general liability insurance is not legally needed for companies, operating without it is exceedingly dangerous. If your company is sued, you might face costs in the hundreds of thousands of dollars (or more). The only way to avoid this sort of catastrophe from destroying your organisation is to have an adequate general liability insurance coverage in place to assist pay for these losses.

GENERAL LIABILITY INSURANCE MAY COVER COMMON SITUATIONS FOR A CREATIVE AGENCY

Example 1: A customer enters your business and trips in the toilet owing to insufficient illumination. Her medical expenditures for any resultant injuries would be covered by general liability insurance.

Example 2: Because your company name is similar to the name of another creative agency, the other agency sues you for lost money, claiming that some of its customers booked services via you by mistake. Your legal fees and any awarded damages would be covered by general liability insurance.

Example 3: After an IT staffer makes a crucial mistake, you must replace the hard discs in all of your computers. Your general liability insurance would cover the cost of repairing your damaged equipment.

Of course, this is not an entire list of risks covered by a general liability insurance policy, and certain situations may result in a specific peril not being covered. To minimise coverage gaps, it’s always better to speak with your agent about the terms of your policy.

General Liability Insurance Cost

In the United States, creative firms typically pay between $450 and $750 per year for $1 million in general liability insurance.

The cost of your coverage will be determined by a number of variables. Among them are your:

Location

Deductible

Employees’ number

Per-occurrence restriction

The overall aggregate limit

You may be able to get general liability insurance at a lower cost if you buy it as part of a business owner’s policy (BOP) rather than as a separate policy. A business interruption policy (BOP) is a more complete option that covers numerous types of coverage, such as business interruption and property insurance.

Other Types of Coverage Required by Creative Agencies

While general liability insurance is the most crucial, there are various different types of coverage to be aware of. Other forms of insurance that all creative agencies should have are listed below.

Insurance for Commercial Property

Commercial property insurance protects your business-related property in the case of a fire, burglary, or natural catastrophe if you own the building in which you operate. It pays for the repair or replacement of any structural damage to your building or grounds, as well as the repair or replacement of any business goods stored there.

Insurance for Professional Liability

Creative companies provide customers with the guidance they need to market their goods or brands. If a customer feels your company’s advise caused them to lose business, they may hold you responsible for the loss of money. In the case of a lawsuit, this insurance would pay your legal fees.

Insurance for Workers’ Compensation

Workers’ compensation insurance is required in most states for both part-time and full-time employees. This coverage covers your workers if they are hurt at work or get sick as a result of a workplace accident. It covers not just an employee’s medical expenditures and missed pay if they need time off to recuperate, but also any disability or death benefits resulting from a work-related accident.

Insurance for Commercial Vehicles

Any car that you or your employees use mainly for business purposes, such as visiting customers, necessitates commercial auto insurance to cover the vehicle, driver, and other drivers on the road in the case of an accident. Choose a policy that not only covers accident-related vehicle repair expenses and medical care for anybody harmed, but also provides enough coverage for any business-related equipment you transport in your cars.

Insurance for Data Breach

If your company loses critical customer information as a consequence of a cyber attack, this coverage will assist pay for the restoration of your computer network as well as compensation for any resulting financial losses.

Coverage Options for Some Creative Agencies

In addition to the policies listed above, your creative agency may need other forms of coverage based on particular parts of your business. Some of them may not apply to you, so be sure to ask your agent whether policies are appropriate for your company.

Umbrella Insurance for Businesses

While most claims are covered by your general liability insurance policy, certain incidents or lawsuits may be so severe that they threaten to deplete the limits of your main coverage. Commercial umbrella insurance protects you from having to pay for legal expenses and awarded damages that exceed the limits of your main policy out of pocket.

Additional Security Measures for Your Company

Although investing in company insurance is simple (and necessary), it should not be your first line of defence. Yes, insurance will reimburse your company for cash losses incurred as a result of an occurrence, but it is much preferable to avoid losses altogether.

With this in mind, here are a few steps you can take to better secure your company:

Make use of legally binding contracts and other business agreements. (We provide free templates for several of the most often used legal forms.)

To safeguard your personal assets, form a limited liability company (LLC) or a corporation. (To discover how to incorporate an LLC or company in your state, see our step-by-step tutorials.)

Keep your company licences up to date.

Streamline the internal procedures of your company. This will eliminate unneeded variables from routine activities and establish a secure, consistent environment in which to do business.

If your company is an LLC, you should check into LLC insurance.