Company insurance is intended to safeguard the financial assets of a business owner and is a crucial investment for a life insurance agency.
This article will discuss the primary insurance coverage for life insurance brokerages, general liability insurance, as well as additional policies that are appropriate for this industry.
Life Insurance Brokers 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 FOR A LIFE INSURANCE BROKERAGE IN THE FOLLOWING SITUATIONS:
Example 1: You back your vehicle into a client’s garage when visiting their house for an insurance assessment, causing major structural damage. If the customer files a lawsuit against you, general liability insurance should cover the losses as well as legal counsel.
Example 2: A customer stumbles on a damp floor at the brokerage’s Christmas party and needs emergency surgery. They are seeking payment for medical fees from both you and the venue. These costs should be covered by your general liability coverage.
Example 3: A competitor brokerage has sued you, saying that your new television commercial portrays them as unprofessional and has lost them business. General liability insurance would cover your legal bills and any damages ordered by the court.
Example 4: You have requested for a loan to pay the cost of your new office building. The bank requires a minimum of $1 million in liability coverage as part of the lending criteria. This need would be met with a general liability coverage.
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, life insurance brokerages pay between $400 and $700 per year on general liability coverage of $1 million.
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 Life Insurance Brokers
While general liability insurance is the most crucial, there are various different types of coverage to be aware of. Other forms of insurance that every life insurance brokerages should purchase are as follows:
Insurance for Professional Liability
Your customers depend on your experience to evaluate the coverage their family needs for life insurance. If they believe you have failed them, whether via mistakes and omissions or professional negligence, this insurance will cover associated litigation. The policy, commonly referred to as Errors and Omissions (E & O) insurance, covers expenditures and awarded damages up to the policy limits.
Insurance for Commercial Property
When obtaining insurance, it is critical to prioritise the protection of one’s company investment. Commercial property insurance protects your assets in the event of a covered loss. If an owned building sustains damage, the insurance covers the cost of repairing or replacing the structure, as well as any business-owned items held on-site.
The property section of this policy excludes physical property if your company leases space, but it does include the contents of the facility. Renters should evaluate their lease agreement to find any areas of the building for which they are accountable, since many plans will extend coverage with the appropriate additional endorsements.
Commercial property insurance may be purchased as part of a company owner’s coverage (BOP).
Types of Coverage Required by Some Life Insurance Brokers
In addition to the policies listed above, your life insurance agency may need a few more forms of coverage based on specific features 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
Managing a life insurance agency necessitates gathering and preserving confidential and sensitive information from customers. This exposes you to cyber assaults, which are not covered by a general liability coverage. To secure extra coverage, business owners can consider acquiring data breach insurance. This coverage, often known as cyber attack insurance, covers losses resulting from a data breach that results in stolen user data.
Insurance for Workers’ Compensation
Workers compensation insurance is required by the law for all enterprises with employees. If they are injured on the job, the insurance will cover their medical expenditures as well as a portion of their missed pay. Should the occurrence result in a lawsuit, the coverage extends to the company owners.
Workers’ compensation insurance is often bought separately.
Umbrella Liability Insurance for Businesses
The costs of a lawsuit mount up, sometimes exceeding the limits of the underlying insurance policy. A business umbrella liability coverage adds an extra layer of protection, taking over after your general liability policy is exhausted.
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 business is an LLC, look into LLC Insurance.