However, not all businesses opt to get insurance coverage even after their first year of operation. One of the biggest obstacles they face, especially for startups, is the variety of insurance types available on the market. Without careful planning from the company heads, businesses may end up not having enough coverage, or overspending for unnecessary coverage.
Not all businesses need the exact same insurance coverage. Each business will have a slightly different set of insurances depending on several factors. These include the size of the business as well as the business location.
Another great way to determine what insurance business should get is based on how the business functions. For example, if the business has several employees with company vehicles, then getting car insurance is a wise option. On the flip side, a business that has nothing to do with the medical practice would not need malpractice coverage.
Types of Insurances
Some types of insurance are required by state and federal law for all businesses to have. Others are elective, meaning each business can opt to have it or not. Below is a list of these insurances, as well as a brief description of what it covers and the price range.
- Workers Compensation Insurance
- Required in most states
- Cost: $0.75 to $3 per month per $100 of payroll
- Purchase: via brokers or private insurance carriers
- What it does: takes care of medical expenses an employee due to a work-related injury, as well as a portion of their salary while they recover from the said injury. This also deals with possible legal fees if an employee brings the work-related injury to the court. - Disability Insurance
- Required in five states (New York, California, Hawaii, New Jersey, and Rhode Island)
- Cost: 0.25% to 0.5% of payroll
- Purchase: via brokers or private insurance carriers
- What it does: provides workers with a portion of their pay if unable to work due to illness or injury. Unlike Worker’s compensations, illness or injury does not have to be work related. - Unemployment Insurance
- Required by the government
- Cost: Varies by state (0.6% federal tax rate for most businesses)
- Purchase: paid by employers along with payroll taxes as Federal Unemployment Taxes (FUTA) and State Unemployment Taxes (SUTA)
- What it does: employees can apply for this to cover a portion of their salary in the event of a job loss.
There are other insurances in the market, like general liability, product liability, and commercial property. The top three listed, however, are the basic ones that businesses should cover.
At Valencia Insurance Group, we put our clients first by offering them policies that they can afford. Having insurance is a necessity nowadays and we're here to help you out. Learn more about our products and services by calling our agency at (772) 344-8899. You can also request a free quote by CLICKING HERE.