- Essential Types of Business InsurancE
- TYPE OF BUSINESS INSURANCE COST WHAT IT COVERS:
- Workers compensation (required) $0.75- $3 month/ $100 of payroll Claims resulting from work-related injuries
- Unemployment insurance (required) Varies by state (0.6% fed tax rate Guarantees portion of employee’s wages after job loss
- Disability insurance (required) 0.25% to 0.5% of payroll Guarantees a portion of employee’s wages after illness or injury
- General liability insurance $400 to $600 per year Certain losses that business causes to another company, client, or vendor
- Commercial property insurance $1,000 to $2,000 per year Theft, fire, vandalism, and some weather-related property damage
- Professional liability insurance $900 to $1,800 per year Financial losses arising from your business’s negligence or malpractice
- Product liability insurance $0.25 per $100 of product sales Design flaws, manufacturing flaws, or insufficient product instructions
- Employment practices liability ins $800 to $3,000 per year Wrongful termination or discrimination claims
- Key person insurance Less than $1,000 per year Replaces lost income from an owner’s or key executive’s death or disability
- Workers Compensation Insurance (Required) One of the three types of business insurance that, if you have employees, may be required by law is workers’ compensation. States require most employers to carry workers’ compensation insurance in case employees are hurt on the job. This is definitely a requirement that you don’t want to take lightly. Failure to purchase the required amount of coverage can result in fines and, rarely, even in criminal penalties.
- If an employee experiences a work-related injury, workers comp will cover their medical expenses and pay them with a portion of their wages while they recover. For example, workers comp would cover an employee’s back pain that stems from poor ergonomic desk setup. If an employee sues your company for work-related injuries, workers’ compensation insurance usually covers the cost of defending the lawsuit
- employer contributions to defined-benefit o defined-contribution retirement plans;
- payment for the provision of employee benefits consisting of group health care coverage, including insurance premiums; and
- payment of state and local taxes assessed on compensation of employees.