How Liability Coverage Protects Your Business

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Business liability coverage can protect your business in a variety of ways against formal lawsuits or third-party claims. Learn more here!

Business liability insurance protects your business (and you personally) against formal lawsuits or third-party claims. This type of liability coverage will also cover any legal expenses related to your legal defense.

For example, business liability insurance protects your company’s assets if:

  • Someone gets hurt on company property
  • You or someone you employ causes property damage or injury when working on behalf of your company
  • You cause damage to a rented property (e.g., there is a fire or other covered loss)
  • There are damages due to libel, slander, copyright infringement, or false or misleading advertising

Do You Need Business Liability Insurance?

The short answer is yes. Every business needs business liability insurance. It is your protection against negligence and the bad luck of everyday accidents occurring on the job. Also, proof of business liability insurance is often required to obtain a business license.

How is Business Liability Insurance Packaged?

You can buy general business liability insurance as a single policy. However, general business liability insurance is often a part of a business owner’s policy (BOP), which also includes property insurance. Insurers tend to bundle both types of insurance together within a BOP.

How Much Liability Coverage Do You Need?

The amount of liability coverage you need largely depends on your type of business and risk exposure. A construction company obviously needs more coverage than an independent consultant. Another factor to consider is the location of your business because some states have additional insurance requirements.1

You should consult with a licensed insurance broker before signing any insurance policy. For example, if your business is in the lower-risk category, you could look for a BOP that combines all your business insurance needs and has a cost-effective rate.

How Does a Business Liability Plan Work?

Your insurance policy will state the maximum amount the insurance company will pay out in the event of a liability claim. You are responsible for paying any costs that are above the maximum payout amount of your insurance company. You could, however, buy additional coverage with excess insurance or umbrella insurance.2

It’s always a good idea to conduct your own industry research. For example, a client contract could require your business to have higher coverage than what your current policy provides. Also, some construction contractors may add you to their own general liability policy for the duration of a project.

Steps to Buying Business Insurance

When shopping for or buying business insurance, the Small Business Association recommends using a four-step approach:1

Step 1: Assess your risks and vulnerability

Risk assessment is a vital element in business continuity planning. The assessment could be the due diligence that will pay dividends in protecting your people and business property if disaster strikes.

Step 2: Locate a reputable licensed agent

Find an agent who is motivated by providing you with the best and most cost-effective insurance coverage. Insurance agents usually work on commission. Make sure your agent puts your interests ahead of his or her own.

Step 3: Shop around and take note of price differences

Compare the price and coverage of policies offered by several agents and insurers. Pay particular attention to policies that are priced lower than average, especially the coverage and deductibles. Insurance is like any other product: you get what you pay for.

Step 4: Reassess your insurance needs yearly

As your business expands in value, size, and scope of operation, so do your risks. Reassess your insurance needs at least yearly. Again, it is about risk assessment and your ability to recover from a disaster.

 

Have more questions about adding liability insurance coverage to your business? Our team is happy to help! Click here to receive a quote.

 

This article originally written by our partners, West Bend Mutual Insurance Company.

1. SBA.gov, 2022

2. TheBalance.com, June 7, 2022

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2023 FMG Suite.

 

 

4 Tips For Adding Your Teen To Your Car Insurance

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A photo of a teenager sitting in the front seat of their new vehicle. For teenagers

For teenagers, getting their first car is a milestone—it serves as a symbol of maturity and independence. Nonetheless, most teens aren’t in a financial position to pay for their own car insurance. But with teenagers aged 16–19 being the most likely to damage their cars, going uninsured isn’t an option.1

If your teen is approaching driving age, you may be preparing to add them to your car insurance. It’s important to be aware of these four things before you do so:

1. Your Car Insurance Rates Will Increase

Adding a teen to your policy will inevitably increase your rates. It doesn’t matter how good a driver they are; teens are the most inexperienced drivers and, therefore, the riskiest to insure. While the average annual cost of auto insurance for a 25-year-old is $3,348, the same is $7,396 for an 18-year-old driver. However, it’s typically still cheaper to add a teen to your policy than to put them on their own.2

You might want to investigate other car insurance companies and compare what your costs will be once your teen is added to your insurance. Remember that they will likely be on your insurance for years. Your current provider may or may not offer the cheapest rates available to you in the long run, and it’s worth investigating all your options before making any changes.

2. The Car They Drive Matters

While it may make your teen happy to be handed the keys to their shiny new dream car, that’s probably not the best choice when it comes to lowering auto insurance costs.

Your auto insurance rates drop about 3.4 percent for every year your car ages. While rates depend on a number of variables, insuring a brand-new Audi convertible is likely to cost much more than a used Mazda. Regardless, as your teen acclimates to life behind the wheel, it’s advisable that you buy them a safer, possibly used car, as opposed to a new one that “looks” nicer.3

A good idea is to get your teen involved in the car shopping process. Have them research which cars are affordable and safe, but also allow them to have a say by looking for one they’ll like.

3. Know Your Car Insurance Policy & State Policy

It’s difficult to make generalizations about auto insurance because so much depends on the actual insurer itself. Insurance companies differ widely in rates and policies. Your insurance company may have a policy about new teen drivers that you’re not even aware of. For instance, certain companies don’t charge to cover your teen while they have their learner’s permit. Overall, the best option is to have a discussion with your insurance company about your teen’s situation and how it will impact your car insurance.

Moreover, states have different policies when it comes to age and insurance requirements. Certain states require that teens are covered by insurance to get their learner’s permit, while others only require that licensed drivers be covered. Either way, it’s smart to inform your insurer when your teen gets their learner’s permit and even smarter to get them insured as soon as possible.

4. Investigate Discount Options

Again, this differs from company to company, but certain insurers offer discounts for young drivers. Check whether your insurance company offers any of these to get some relief on your teen’s auto insurance:

Good Student Discount:

This discount rewards student drivers for achieving high grades. The threshold depends on the insurance company.

Safety Discount:

If your teen takes an approved safe driving course, they may qualify for this discount.

College Discount:

Let your insurance company know when your teen leaves for college. If they’re not taking a car with them and are attending a college over 100 miles away, you might get some insurance relief.

 

Among all the financial considerations to make before adding your teen to your auto insurance, there’s a more personal consideration, too: holding your teen accountable. The first year of licensure is typically the riskiest for teenagers. Ensure that you teach your teen important safety and car care principles before easing them into independent driving.1

Have more questions about adding YOUR teen driver to your insurance? Our team is happy to help! Click here to receive a quote.

This article was originally written by our partners, West Bend Mutual Insurance Company.

 

1. CDC.gov, 2022

2. Statista.com, 2022

3. TheZebra.com, June 27, 2022

 

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security. Copyright 2023 FMG Suite.