Company insurance is intended to safeguard the financial assets of a business owner and is a crucial investment for an insurance firm.
This article will discuss the primary insurance coverage for insurance agencies, general liability insurance, as well as additional policies that are appropriate for this industry.
Insurance Companies’ 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.
COMMON SITUATIONS COVERED BY GENERAL LIABILITY INSURANCE FOR AN INSURANCE AGENCY
Example 1: During an insurance review conference in your office, a client’s youngster climbs to the top of a shelf, pulls it and its contents down on top of him, and suffers minor injuries that need minor surgery. Your customer sues your company for monetary damages. General liability insurance would cover the child’s medical bills, your legal costs, and any monetary damages awarded by the court.
Example 2: During a house visit for a homes insurance policy, an employee unintentionally lets the homeowner’s dog outdoors, where he gets struck by a vehicle. They both claim you for damages since the collision resulted in emergency veterinarian expenditures for the homeowner and car damage for the other party. Your legal defence and any needed settlement would be covered by general liability insurance.
Example 3: When your designer uses a copyrighted picture in flyers for your new marketing campaign, the photo’s owner files a copyright infringement action against you both. Your legal bills and any court-awarded damages would be covered by general liability insurance.
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 America, insurance companies pay between $400 and $700 per year on $1 million in general liability coverage.
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 Coverages Required by Insurance Companies
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 insurance firms should have are as follows:
Insurance for Professional Liability
Your customers depend on you to determine what insurance coverage they need. If someone believes you failed to satisfy their demands due to professional negligence or a mistake, they may sue you for damages. Professional liability insurance would pay your legal bills and any needed settlement in the case of a lawsuit.
Insurance for Commercial Property
Commercial property insurance should be included in your insurance portfolio whether you own or lease your office space. Commercial property insurance would cover the expense of repairing or replacing your business-related property in the case of a fire, theft, or natural catastrophe. This covers structural damage to your premises as well as the business items stored inside it.
Commercial property insurance is often available as part of a company owner’s policy (BOP).
Types of Coverage Required by Some Insurance Agencies
In addition to the policies listed above, your insurance agency may demand a few more forms of coverage based on specific characteristics of your activities. Some of them may not apply to you, so be sure to ask your agent whether policies are appropriate for your company.
Insurance for Data Breach
As an insurance agent, you must keep a lot of personal information about your customers. This policy, often known as cyber attack insurance, protects your company against responsibility if a cybercriminal hacks into your computer system and takes critical client data, leading to a lawsuit from your customers. Data breach insurance would cover your legal bills as well as any settlement amounts in the case of such a lawsuit.
Insurance for Workers’ Compensation
Most states will require you to have workers’ compensation insurance for your part-time and full-time employees if you have any. This coverage covers your workers if they are hurt at work or get sick as a result of a workplace accident. It covers not only an employee’s medical expenditures and lost pay if they need time off to recuperate, but also any disability or death benefits resulting from a workplace accident. When a significant claim results in a lawsuit, this coverage will pay for your legal bills as well as any court-awarded damages.
Workers’ compensation insurance is typically sold separately by most insurers.
Umbrella Insurance for Businesses
Given today’s litigious society, insurance agents must eliminate any gaps in their insurance coverage. 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.