© Mohamed Faisal Bin Ramli/Getty Images/iStockPhoto When estimating the cost of business insurance, you need to consider the type of industry you operate in and the specific business you are in.
When opening a business, you need to prepare various things.
From hiring workers to purchasing materials, there is a lot that needs to be done to create jobs. The process of putting it all together didn't happen overnight.
Despite our best plans, sometimes things get out of our control. One day you enter your store and find that the faucets broke overnight and water is running all over the products. You can go out one night and the next someone comes in and steals your business.
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Insurance is a means of protection in such cases when life deteriorates. But how much does business insurance cost? Which one do I want?
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How much does business insurance cost?
There is no exact amount of business insurance. According to Andrew Hellman, head of strategic integration and benefits for commercial insurance, there are a number of factors that determine the cost of commercial insurance, such as the type of industry you're in and the specific business you're in.
For example, businesses that interact more with the public, such as retail businesses, tend to incur higher business insurance costs in terms of coverage, Gelman explained in an email. On the other hand, a professional with fewer contacts will pay no liability because the risk is lower than in a client-oriented industry.
The price of business insurance is also affected by state availability, as standards can vary from state to state, Hellman writes. According to Next Insurance, small business insurance in New Jersey costs about $64 a month. Next Insurance rates small business insurance in California at about $37 a month.
But these estimates aren't very specific because they don't take into account the different costs and risks each business and industry faces, Next Insurance notes.
"In general, the cost of insuring your business depends on the type of policy you want," Hellman said via email.
What types of business insurance are there?
In general, business insurance helps cover property damage, lawsuits, lost business profits and other losses, Hellman says.
“Without business insurance, you may have to pay out of pocket for costly damages and lawsuits against your business,” he adds.
According to The Hartford Financial Services Group, common types of business insurance include general liability coverage, commercial property insurance, professional liability insurance, workers' compensation insurance and commercial auto insurance.
General liability insurance protects your business against bodily injury, damage to other people's property, or personal injury, such as libel or slander, according to The Hartford. Meanwhile, commercial property insurance protects your business against damage caused by fire, theft, vandalism, wind or lightning, according to The Hartford.
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Do I need business insurance?
The short answer is yes, you need business insurance. Even if you're a sole proprietor, Hellman says insurance protects against many risks.
Perils typically covered by Helman commercial insurance include:
- Theft
- Lightning
- Fire and smoke
- A car accident at your company
- storm or snow
- Spilled spray
- destroy
- Items are served
- turn off
"Typically, liability insurance is the primary policy for business owners because it helps cover bodily injury, property damage, and various legal and medical expenses," he says.
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This article originally appeared on USA Today: How Much Does Business Insurance Cost? Everything you need to know about types, cost and more