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Do I Need Commercial Business Insurance If I’m an LLC?

Insurance Ranked - Updated January 9, 2023
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Do I Need Commercial Business Insurance If I’m an LLC?

Any type of business, including an LLC, can be sued or suffer financial losses from its liability risks. You need to protect your personal and professional assets. Commercial business insurance can be that extra level of protection.

What Type of Commercial Business Insurance is Best for My Company?

Certain companies might need specific coverage depending on their industry, size, and local laws. Every company should have general liability insurance and add other coverage as they see fit.

In addition to the five previously-mentioned types of commercial business insurance, your company might benefit from:

  • Business interruption coverage: helps your company recover lost income.
  • Crime coverage: helps cover your company's crime-related losses.
  • Cyber liability coverage: protects against claims and costs associated with cyberattacks.
  • Equipment breakdown coverage: helps you pay to repair your company's damaged equipment.
  • Product liability coverage: protects your company against losses stemming from a product that causes harm.

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How Much Does Commercial Business Insurance Cost?

Insurance rates vary. A company that must cover many risks will typically pay more for insurance than a company with only a few. Rates also depend on the industry and location. A high-risk industry like construction will probably pay more for insurance than a lower-risk company like a digital marketing agency.

How Can I Reduce My Commercial Business Insurance Rates?

Reduce your company's risks

Investing in a risk management plan is just as vital as owning commercial business insurance. Prevent your losses before they happen. Your company should constantly follow safety guidelines. Depending on your industry, theft prevention might also help defray your financial losses.

Own the proper coverage

You could be paying more for insurance because you have the coverage you do not need. For instance, if you own cyber liability coverage but do not use any type of computer, then you are paying for something you do not need. Know your risks and only cover them.

Research your choices

Insurance issuers compete against one another for business. Use this to your advantage and compare rates. You should discover that each issuer might fight to give you the best deal.

Pay your premium in advance

Some insurance issuers will discount your rate if you pay ahead of time. These savings can be quite substantial for small businesses operating within a tight budget.

How Do I Get Commercial Business Insurance Quotes?

You have two options: you can request commercial business insurance quotes yourself via each insurance issuer's website or you can contact an insurance agent or broker. If you know what you need, then you can easily get quotes yourself. However, if you need assistance, an agent or broker can help you evaluate your needs.

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Conclusion

Being informed can seem like a second job, especially when you are starting your business. Avoiding it will not make your liability risks go away. You have to guarantee your business can stand strong against injury and damage claims even if they are not substantiated. Collecting commercial business insurance information is more than premium quotes. You must know what types of coverage are available to help guard your business against costly claims and lawsuits. Although you might not see any short-term gains, your company's future is more secure with the right kind of protection.

Commercial Business Insurance Quotes FAQs


What is a Business Owner's Policy (BOP)?

A BOP bundles business property and business liability insurance into one policy, making it an easy and sometimes cost-effective method to maintain coverage.

Can I deduct commercial business insurance premiums from my taxes?

You can deduct these costs from your taxes since this type of insurance serves a business purpose.

What is a certificate of insurance and how much does one cost?

A certificate of insurance is proof of insurance coverage. The document acts as a receipt that proves you own coverage. It is typically free and can be obtained from your insurance issuer after paying for a policy. Some issuers let policyholders download and print their certificates.

I have personal auto insurance. Do I still need commercial auto coverage?

If your company owns a vehicle, then you need commercial auto coverage. Personal auto coverage does not cover vehicles that are used for business purposes.

What is the difference between an insurance agent and a broker?

An insurance agent works for a specific insurance issuer. An insurance broker searches for policies from different issuers on the behalf of the customer.

Should I make room in my company's budget for commercial business insurance?

You absolutely should make commercial business insurance a priority in your budget. Consider it just another cost of doing business.

I operate a home-based business. Do I still need insurance?

Sometimes homeowner's insurance will cover home-based business-related property and equipment. If your policy does not, then you should look into getting home business insurance to protect against losses that result from property damage, lawsuits, and injuries.

What do I need to know to get a commercial business insurance quote?

Some basic information you should have on hand when you contact an insurance agent or broker for a quote includes but is not limited to:

  • The location of the company
  • The company's name
  • The date the current ownership of the company began
  • The number of employees
  • The names of all business partners
  • The estimated revenue for the upcoming year
  • Contact information
  • The number of years the owner and their company has in the industry
  • Operation and risk details
  • Prior insurance claims
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