Still, we must talk about LLC Insurance for your business. It is essential. You simply have to have it. You put a lot of money and energy into your business, right? Surely you want to protect, don't you?
You do, or you wouldn’t be reading this. We will try to spice it up for you, so read on…
What's The Point of LLC Insurance?
You need this insurance protection to keep your business from things like being sued for various reasons.
It can protect your building and property.
It can protect your business vehicles.
Likely, you will need workers compensation insurance as well.
Without LLC insurance, just one friggin' accident, theft, fire or lawsuit could cause you to lose everything you've worked so hard to create!
Failing to get your LLC liability insurance would just be flat out stupid and tragic!
Don’t be a dummy. Because seriously, you would really be a dumb a** to not protect what you have created!
Come On, What Can REALLY Happen? I Have A Very Simple Business!
To be perfectly clear and for you to understand the type of potential disaster you need to avoid, let's give you an example.
Let’s say you opened up a small commercial photography studio business. It’s been fairly successful thus far and it’s been close to a year. Things are looking good and you may even start earning a profit next year! (Yay for you!)
Buuuuut, someone didn’t insure the business. (You) You are just “so busy”. (Insert sad music here) You keep telling yourself you will do it tomorrow, or other things like:
"I am too tired to get around to it today"
"I have a headache again"
"I tried to get insurance. It’s too hard to figure it all out"
"I’d seriously rather hand mop the entire studio on my knees with a washcloth"
"What are my options? Can I cut off a few fingers instead?"
Sound familiar? (If so, don't fret. You are not alone.)
So your business is uninsured. On one fateful day, two men walk into your studio asking for directions to the closest pharmacy. You kindly start to detail the one that is two blocks over. Suddenly, one of them pulls out a gun and asks for all of your money. You don't have any in the studio so they take all of your equipment- your cameras, lenses, tripods, computers, etc.
In a flash, they are gone and you are left standing there stunned. In a flash, you are without the capability to run your business. (Bad. Very bad.)
See? Now You’re Screwed
Uh-oh. This can't be good.
Woulda, coulda, shoulda… Now you have no equipment and you have a professional shoot lined up an hour from now, and the rest of the week is booked! Obviously, you can’t work. You have no business and no income. You have no recourse since you are uninsured. (Don't you feel dumb now?)
You are going to lose that client and potentially all the future clients you had lined up. Depending on what kind of people that they were, your reputation may even take a hit because they will be pissed that they now have no photographer for that special event. The robbery was not your fault. But having no recourse (insurance to buy new equipment) is totally your fault.
The S*it Hath HIT THE FAN!
You certainly don’t have the $22,000 in your bank account that it would take to replace all of your equipment.
Your only option is to get a loan or a credit card (and both take time to get) and purchase the new equipment with it, which means you will be paying hefty interest for at least a year. Still, you won't be approved for weeks, so that doesn't replace any immediate income. Also, you could be denied. What now?
Your business might not survive the reputation hit and the loss of income.
Don’t Be THAT Poor Idiot! (Or the poor guy below)
Well, ya know what?
This would have all been covered if you had purchased the right LLC liability insurance policy from Hiscox. It would have been easy and they would have done all of the legwork for you.
This poor guy (story in the link below) had liability insurance and renters but it didn’t cover much of his equipment. The story below is a prime example of why you need to talk to someone about covering ALL of your needs:
LLC Insurance Types. (Boring? Yes. But VITAL to Understand.)
Most LLC’s need to purchase at least these four types of insurance:
Property Insurance (To protect your building structure and its contents)
Liability Insurance (To protect your business when you get sued)
Business Vehicle Insurance (If you have business vehicles or use a vehicle for business. Because people are sucky drivers.)
Workers Compensation Insurance (Usually required. It's for when Bubba drops a hammer on the flip-flops he shouldn’t be wearing on the job site and breaks his foot in 5 places.)
More on Liability Insurance for LLC’S
There is more than one form of commercial liability insurance. (Of course. Why should they make it easy?) Each covers you for specific types of errors. Be sure to talk with an agent at Hiscox who can help assess your risks and choose the appropriate coverage and give you your limited liability quote.
There are a few different liability insurance options for LLCs:
Commercial General Liability Insurance: Covers you if a customer is injured while they were on your property. Or if you’re accused of slander, this helps to cover medical bills, lawyer costs, and judgments or settlements. Be sure you get the right kind to protect your LLC.
Product Liability Insurance: If you sell any sort of product, you need this coverage. You can be sued if your product causes injury or damage to someone or to their property.
D&O Insurance: Also called directors and officers insurance, this liability coverage saves your butt if someone sues you or one of your directors for a business related complaint.
Professional Liability Insurance: This coverage is also known as errors and omissions insurance, or “E & O”. If you are an accountant, doctor or lawyer, this is a must, as you provide professional services and advice that can go wrong. For example, doctors have professional liability insurance known as 'malpractice insurance', which surely you have heard of before. An investment firm needs E & O coverage for advice provided to clients that can potentially result in a financial loss.
Of course, there are many other forms of LLC insurance coverage that you may need. (Commercial vehicle insurance if you have cars and drivers. Business Interruption insurance if you lose your business income due to a fire or whatnot.)
LLC insurance requirements are set by your state government. You had better make SURE you’re complying with state business insurance laws when you begin operation. We know, we know… there's MORE??
There sure is! Business is business. This stuff is important. Requirements may include:
Workers compensation: Most states require this coverage. It doesn’t matter whether your business is a limited liability company, but the specific requirements vary by state. Crazy as it may be, some states require workers compensation whether or not a company even hires staff members! Others require it only if the business has a certain minimum number of employees.
Disability insurance: Some states require businesses to offer disability insurance. What’s the difference between this and workers comp? Workers compensation covers work-related injuries and illnesses. Disability insurance covers non-work-related incidents and illness that prevent a worker from going back to work.
Unemployment insurance tax: This is designed to help cover the costs of unemployment insurance for workers who lose their jobs. You may need to register your company with the state workforce agency as well.
Because you are so busy with your “busy-ness”, (ha ha) we have simplified the process of getting the right LLC insurance quotes from the right insurance company just for you. This is your one-stop shop for your business insurance needs.
Get your LLC insurance quotes and protect your precious business ASAP!