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If you’re a small business owner, there are probably a lot of things that worry you. One of them might be the amount of liability insurance you should have, since facing a major lawsuit could mean losing everything you’ve worked for. This of course, is the worst-case scenario but even so, it’s better safe than sorry – and this situation is entirely avoidable with an umbrella liability and/or excess liability insurance policy

 

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What is Umbrella Liability Insurance?

Umbrella liability insurance is a type of coverage policy that works by extending the limits of multiple existing liability policies including general liability, professional liability auto liability and employer liability insurance. In addition to increasing current policies limits, umbrella liability also helps by filling in coverage gaps by covering some claims that primary policy might exclude.

 

So, if your business faces a lawsuit and you are liable for damages that are greater than the limits of your commercial insurance policy, an umbrella policy will help you to pay the remaining amount. That means you won’t have to sell any of your assets or use any of your savings to pay the additional expenses out-of-pocket. 

 

It’s important to note that umbrella policies are supplemental coverage, meaning you can’t purchase one without first having primary liability insurance.

What Does an Umbrella Liability Policy Cover?

Commercial umbrella liability policies work pretty much the same as traditional commercial liability policies. It also provides protection against the same types of risks. To be more specific, an umbrella insurance policy will give you supplemental coverage for the following:

 

  • Slip and fall injuries – If you have general liability insurance and also purchase commercial umbrella insurance. Your supplemental policy will cover any excess legal costs in the event that a third party sustains an injury on your company’s property.
  • Third party property damage – The addition of commercial umbrella insurance to a general liability policy will help to pay legal fees associated with the destruction or damage of third-party properties.
  • Car accidents – If you have a commercial auto insurance policy or a policy that covers hired and non-owned vehicles. Adding commercial umbrella insurance to those policies can help cover costs in the event that someone sues you for damages caused by one of your vehicles.
  • Employee injury lawsuits – Having an umbrella policy on top of employers liability insurance (which is typically included in workers’ compensation insurance) will help pay for employee lawsuits brought on by work-related injuries caused by employer negligence.

What Doesn’t Umbrella Liability Insurance Cover?

Although umbrella insurance can increase the liability limits of several other policies, it does not offer the complete safety net that a small business may require. Umbrella policies do not cover the following:

 

  • Damages within the primary policy’s limits – Umbrella liability insurance does not kick in until the limits of the primary policy have been exhausted. As with any insurance, it only covers things up to the policy’s maximum.
  • Business property damage – Damage to your company’s property due to things like fire, theft, or certain types of weather can be covered by the commercial property insurance included in a business owner’s policy (BOP) or commercial package policy (CPP). Umbrella policies are extensions of existing liability insurance and you cannot buy them separately for property.
  • Professional errors – Malpractice insurance, also known as errors and omissions insurance (E&O) or professional liability insurance, protects professionals from legal action stemming from their own negligence or those of their clients. Excess liability insurance, also known as excess E&O insurance, is very similar to umbrella insurance. You can use it to increase the limits of this type of policy. But umbrella liability insurance will not cover this type of negligence.
  • Employee theft – If you want to protect your company financially from employee theft or fraud against customers or clients. You’ll need commercial crime insurance, also known as a fidelity bond.

Who Needs an Umbrella Liability Policy?

In general, the more face-to-face interaction your business has with your clients and customers, the greater your liability risks. In addition, if your employees are using dangerous equipment or heavy machinery, your business faces even more risks. 

 

If the above is true for you, and you believe that the cost of a claim could exceed your liability limits, purchasing commercial umbrella insurance is something you should seriously consider doing. This coverage may be of useful for your business if:

 

  • You’re a general contractor and your client needs more coverage – Umbrella insurance is a stopgap measure for contracts worth more than $2 million. If you’re a general contractor, and your existing general liability policy has a $2 million per-occurrence limit, but your client contract requires a $5 million per-occurrence limit. You would add an umbrella policy with a $3 million per-occurrence limit.
  • You’re in contact with the public – The possibility of a customer sustaining a physical injury is increased when your establishment is open to the public. For instance, during business hours, wholesalers frequently use various pieces of machinery to restock the shelves of their warehouses. When using this kind of machinery in the presence of customers, there is a risk of injury. If someone gets hurt while on your property, you could be liable for expensive medical bills and lawsuits that exceed the limits of your general liability insurance. 
  • You do work off site – Working away from the physical location of your company can also increase the liability risk it faces. For instance, if your employees are performing work at the residence of one of your customers, there is an increased possibility of property damage. 

 

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The Cost of Umbrella Liability Policies

The range of umbrella insurance policies available is very broad, with a significant gap between the lowest and highest limits of coverage. This makes sense, since no two businesses share the same set of risks. There are businesses that choose to purchase $1 million in supplemental coverage, and businesses that might even choose to purchase $100 million or more in coverage. The amount of coverage you choose, as well as other factors related to the type of business you run, the amount of employees you have, and your annual revenue, will determine how much an umbrella policy will cost you.

 

With that being said, prices can vary widely even between seemingly identical businesses. And keep in mind that without knowing your business, we can’t give you exact quotes, so speak to an EZ agent to find out what you can expect to pay. But to give an example, let’s say your small business is looking for $1 million in coverage. With a $1 million policy, the highest premium costs average around $208 a month, or $2,500 for the year. Generally businesses with higher risks pay the most in premiums; this typically includes doctors, lawyers, and construction companies. On the opposite end of the spectrum, for less risky businesses such as cleaning services, you would pay around $33 a month. Or $400 for the year.

How Much Umbrella Liability Coverage Do I Need?

If you have a business that is contracted out by clients, and you have a contract with a client that requires a liability limit higher than $2 million, you will typically purchase an umbrella policy to meet that limit. It’s not unusual to see contracts worth $5 million or more. In that case, you buy a $3 million umbrella policy in addition to a $2 million primary policy. Otherwise, the amount of coverage you choose should be tailored to the specifics of your business and its industry.

 

Keep these three things in mind as you browse umbrella insurance quotes:

 

  • Your coverage should match your assets – To have enough coverage, your coverage needs to match your assets. So, if your entire company’s net worth is $1 million, that’s how much coverage you need.
  • Umbrella liability starts at a minimum of $1 million – You cannot purchase an umbrella liability policy with a coverage limit of less than this amount.
  • Umbrella liability coverage comes in increments of $1 million – You can only increase your liability coverage in increments of $1 million, allowing you to acquire precisely the amount of protection you need.

The Difference Between Umbrella Liability and Excess Liability

There is a common misunderstanding that commercial umbrella insurance and excess liability insurance are the same thing. You can purchase excess liability insurance to supplement your existing liability insurance policy. Your supplemental plan will only provide extra coverage to the specific plan you purchase it for, unlike umbrella liability insurance which can provide you with added coverage for multiple types of liability coverage. 

 

For example, if you buy excess liability for your general liability policy, it will only provide extra coverage for your general liability claim. On the other hand, if you purchase an umbrella policy, you will have extra coverage for all of your other liability policies in one supplemental policy.

FAQs

What are the disadvantages of umbrella insurance?

While umbrella insurance is a great way to supplement your current liability insurance it comes with some downfalls. These include the fact that adding an umbrella policy onto your current policy will increase your insurance premiums. Additionally, sometimes it’s required to increase the limits of your existing liability policy in order to qualify for umbrella insurance. 

 

Do I need umbrella liability insurance if I already have high coverage limits on my policies?  

Even if you already have high coverage limits on your existing liability policies, large lawsuits or claims can exceed your policy maximum limit. Umbrella insurance provides extra protection beyond your current policy limits, helping to pay for legal expenses, settlements and judgments, even if they are very expensive. 

 

Can I use excess liability insurance to cover multiple policies?

No, unlike umbrella insurance, excess liability simply extends the coverage of one specific policy. If you have multiple liability policies that you wish to extend, it’s worth looking into an umbrella liability policy instead. 

 

Get Business Insurance Today with EZ.Insure 

Get in touch with an EZ agent if you want to compare commercial insurance policies and prices quickly and easily. If you need assistance making sure your business has enough coverage, our agents are available to assist you at no cost. We’ll take a look at your long-term financial plans and insurance requirements, then recommend the best policies for you. 

To get started enter your zip code in the box below to get a free instant quote, or give us a call at 855-694-0037  to speak with a live agent.

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If you’re a professional who provides a service to clients, like an accountant, attorney, or doctor, you’ll need professional liability insurance. This type of policy protects you from client allegations of negligence and other types of wrongdoing. Your general liability insurance policy does not provide protections against claims resulting from carelessness, malpractice, mistakes, or misrepresentation, so for professionals in fields like yours, this kind of insurance is a must.

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How Professional Liability Works

Professional liability insurance (PLI) can be called different things, depending on the profession it’s being used for. For example, if you’re in the medical field, you will purchase “medical malpractice insurance,” or if you’re a real estate agent or accountant, you will need “errors and omissions,” or E&O. PLI is a specialty policy and is usually not included in homeowners’, in-home business, or business owner’s policies.

 

Most policies are “claims-made” policies, meaning that they will only cover claims if they are made both while your policy is active and if the incident occurred while the policy is active. While you may also find “occurrence” policies, which offer coverage for an incident that happened during the time your policy was active even if coverage has lapsed when the claim itself is made, these types of policies are difficult to find.

 

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What Does Professional Liability Cover?

PLI financially protects your business from legal claims and lawsuits brought against you, whether those claims are valid or not. Both frivolous and substantiated lawsuits may be covered by your insurance. This type of policy can protect businesses against the following kinds of claims:

 

  • Negligence or failure to meet standards – If you or one of your employees delivers subpar services, you could be at risk for a lawsuit. For example, say you are a consultant and you accidentally give your client incorrect advice that they later end up being sued or losing money over. They could then in turn sue you for giving them bad advice because they paid you to have the correct information.
  • Missed deadlines – If you miss a deadline, your client can make a claim against you for not fulfilling your contract with them. For example, if you work in cyber security, and you tell your client their business will be protected by a certain date. But for some reason the project takes longer and is not done by the deadline, if your client gets hacked after that deadline they can sue you for their losses. If you had met the deadline they may not have been hacked, so you can be held liable, but PLI can protect you from this type of claim.
  • Breach of contract – If your business does not meet the terms of anything specified in the contract between you and your client, you can be sued. This includes deadlines, product guarantees, and payments. PLI will cover you in the event of a claim like this.
  • Errors – No matter how careful you are, mistakes can happen, and those mistakes can be costly. For example, if you are an insurance agent, and you select the wrong coverage for your client. Or accidentally forget to turn in a portion of their paperwork, your client might not have the proper coverage in an emergency. They could end up losing a lot of money. And could sue you, so you’ll need PLI to financially protect your business.

 

What Isn’t Covered?

Professional liability insurance policies protect your business from claims of financial losses, not bodily harm or property damage, unlike other types of liability insurance. But there is an exception to this rule: medical malpractice insurance. Other than medical malpractice though, you file bodily injury claims under your general liability policy. 

 

PLI also doesn’t cover lawsuits brought on by employees claiming wrongful termination or harassment. Those claims would fall under employment practices liability policies. Additionally, fraud and criminal acts are not covered by your PLI. If you or an employee intentionally mislead a client or commit a crime, your PLI will not cover the claim.

 

The Cost of Professional Liability Insurance

Professional Liability Insurance generally costs between $500 and $1,000 per year. This can vary based on several factors, such as:

 

  • Your industry – The degree of risk and the financial consequences of a mistake differ from one occupation to the next. All of that is taken into consideration by insurers when setting premiums. 
  • Coverage and deductibles – PLI coverage limits can start at $250,000 and could reach into the millions. Your premium will cost more the higher your limits are. Additionally, if you choose a lower deductible, your premium will be more. When deciding on coverage limits, weigh the annual cost of your policy against potential expenses in the event that a client sues you. You need insurance that will cover both the cost of mounting a defense and potential damages. For instance, a typical professional liability policy will pay up to $1 million for a single claim. Or throughout the course of the policy if the coverage limit is $1 million (per occurrence and aggregate).
  • Your location – Where your business is located is actually a big factor in your premium. If you work in a city with a high claim rate or significant legal expenses, be prepared for higher premiums.
  • Workforce size – The likelihood that one of your employees will make a mistake that leads to legal action increases as your workforce grows. As a result of this higher risk, your professional liability rates will increase.
  • Age of your company – Newer businesses can anticipate paying more for professional liability insurance than larger, more established businesses. But as your company grows in expertise, your insurance premiums should go down, assuming you continue to have no claims.
  • Claims history – For insurers, a history of prior professional liability claims is a risk. Risks mean higher premiums. 

 

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Ways to Save on Professional Liability Insurance

You have no control over certain professional liability cost factors, such as industry and expertise level. However, there are other ways to reduce the overall cost of your insurance:

 

  • Pay your premium in full – Typically, insurers will give you a discount if you pay your annual premium all at once rather than on a monthly basis.
  • Change your deductible and coverage limits – To reduce your overall costs, choose a larger deductible or less coverage. Just be sure your insurance has enough coverage to protect you from potential claims and that your deductible is reasonable.
  • Bundle your policies – To save money on all of your insurance, bundle your professional liability policy with other commercial insurance protection. Most insurance carriers will discount policies when you buy them together.

 

How to Avoid a Professional Liability Claim

While professional liability insurance provides financial security in the event that lawsuits are brought against your company, it’s always safer to prevent claim situations than to let insurance handle the fallout from a dispute. There are a few extra precautions you can take to avoid these claims. For example: 

 

  • Strengthen your processes and procedures – It will be easier to guarantee that the work performed is of a high standard and that the possibility of errors is lower if there are extensive plans and supervision in place.
  • Ensure there is strong communication between you and your clients – Making sure your contracts and agreements are clear and detailed keeps everyone on the same page. This reduces the chance of misunderstandings. 

Being careful during business operations and constantly communicating with your clients won’t guarantee that you never have a claim. But it can certainly help reduce the possibility of having one.

 

FAQS

  • Can I get professional liability insurance in a business owner’s policy?

No, a typical business owner’s policy includes coverage for property, business interruption, and general liability. A separate policy for professional liability insurance would be necessary.

 

  • Do I legally need to have professional liability insurance?

In most circumstances, the law does not require professional liability insurance for small businesses. Professional liability insurance is only necessary for some professions, such as law and medicine. To find out what kinds of small business insurance your company must have, research the regulations in your state.

 

  • Will my professional liability policy cover part-time employees or contractors?

Most of the time, yes, your PLI will cover your part-time employees and subcontractors. Make sure to specify that you’ll need this kind of coverage when you request a quote.

 

  • Do I really need professional liability insurance?

Your company needs professional liability insurance if you offer clients a professional service or expert opinion. Professional liability insurance is clearly necessary for many occupational areas. Including those like law and medicine, but there are additional fields that you might not expect. Professional liability insurance can help advertising companies, IT consultants, and beauty professionals reduce the risks associated with giving clients and consumers advice.

 

How to Find Professional Liability Insurance

Generally speaking, all major insurance companies offer professional liability or errors and omissions insurance. If you already have business insurance, inquire with your carrier about the possibility of expanding your coverage to include professional liability. 

 

Your best bet, though, is to work with an insurance agent. EZ’s agents are highly trained and work with the top companies in the nation. We can compare all of your policy options while working with your budget to get your company all the coverage it needs. For a free quote enter your ZIP code below or give us a call at (855)-694-0047 to be connected directly to one of our agents today.

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General Liability vs. Professional Liability: What to Know

Consider this scenario: a client sues your company for inaccurate advice, or someone slips and falls at your workplace. Suddenly, you’re facing thousands of dollars in unanticipated legal fees—all as a result of a simple error or accident.

 

If you own a small business, protecting yourself from these dangers is critical. But do you know which form of insurance will protect you—general liability or professional liability? The answer could mean the difference between being fully insured and experiencing significant financial loss.

 

Let’s explore all you need to know.

 

"Person slipping on a wet floor near a caution sign, representing potential risks that general liability insurance can cover, as discussed in the article on general liability vs. professional liability.

What is General Liability Insurance?

General liability insurance (GLI) is a type of business insurance that protects against third-party claims involving bodily injury, property damage, libel and slander, advertising injury and reputational harm as a result of your business operation. General liability goes a long way in helping cover incidents by paying for legal defense and other court costs. 

Key Examples 

  • A customer slips on a wet floor in your shop and submits a claim for medical expenses.
  • You accidentally damage part of a client’s property while working on their site, resulting in costly repairs.
  • A competitor alleges you of using advertisements that damaged their brand, resulting in an advertising injury claim.

The Importance of General Liability for Small Businesses

Regardless of the industry that you’re in, general liability can greatly benefit your small business. By protecting your operation against the financial burdens associated with accidents, injuries, property damage, and more, your business will handle the unexpected with ease and remain successful into the future. 

Who Needs General Liability Insurance

General liability is essential for the majority of businesses but particularly those with physical location, or if businesses that deal directly with clients face-to-face. Think about businesses that could face claims involving property damage or physical injury, such as restaurants, retail stores, and contractors. 

What is Professional Liability Insurance? 

Professional liability insurance, also referred to as errors and omissions (E&O) insurance deals with claims resulting from negligence, misrepresentation, or inaccurate advice provided by your professional service. Unlike general liability, which focuses on physical risks (explained in the above section), professional liability is meant to protect service-based businesses where mistakes or advice could lead to financial loss. 

Key Examples

  • An architect makes a mistake in a building design, resulting in structural concerns and expensive repairs.
  • A consultant delivers poor business advice, resulting in financial losses for the customer.
  • An accountant makes an error in financial reporting, resulting in tax fines for the customer.

Who Needs Professional Liability Insurance?

Professional liability insurance is essential for service businesses that offer specialist knowledge or guidance. Consultants, accountants, architects, real estate brokers, and healthcare practitioners are more likely to face accusations of carelessness or error. This coverage protects them from financial loss as a result of errors or unmet client expectations.

Do You Need Both Types of Insurance? 

Combining Coverages

In some cases, businesses will need both professional and general liability insurance. Luckily most insurance providers offer bundled coverage options where you can get both for a discounted price. 

 

Here are a couple examples of business who benefit from both types of protection: 

  • Contractors and developers often provide advice in relation to project planning. This presents a need for professional liability insurance. On the other hand, since these professionals perform physical work on people’s properties, a general liability policy is also necessary.
  • Someone who’s a graphic designer may want to invest in both types as they probably invite clients into their office from time to time, but also want protection against errors made in their physical work. 

Cost of Not Having the Right Coverage

Without the proper insurance policy, your business risks major financial losses. For example, if you only have professional liability, and someone gets injured on your property, you’ll likely still have to cover their medical expenses out-of-pocket. 

 

Or let’s say you have general liability insurance, but no professional coverage, and you make an error when giving consulting advice. Unfortunately with no professional liability,  you may have to pay for the costs of a legal settlement stemming from the misinformation.

Factors Influencing the Cost of Liability Insurance

 

  • Business Size and Revenue: Larger organizations typically pay higher premiums due to increased risk and more exposure to large claims.
  • Industry: High-risk businesses, such as construction, may incur higher general liability expenses, whereas advice-based industries may have higher professional liability rates.
  • Location: Insurance rates vary by state and locality due to changes in laws and overall operational costs. For example, coverage in a big city may be more expensive than in a rural community. 
  • Coverage Limits: Higher coverage limits provide more protection, but also raise rates. Businesses that require extensive coverage may pay extra, depending on their risk exposure.
  • Claims History: A history of previous claims, indicates a higher risk and usually raises rates. 

EZ.Insure—A Quick and Affordable Coverage Solution 

EZ.Insure is the simple solution for your insurance needs, offering competitive business insurance rates and policies tailored to small businesses. With policies starting for as low as $24.95/month, your business can be equipped with a well-rounded liability insurance package, to ensure you’re fully protected without having to break the bank. 

How to Choose the Right Liability Coverage for Your Business

Steps to Consider

  • Evaluate Your Business Risks: Take the time to sit down and list out all of the potential risks that your business might face. Be sure to consider both physical incidents and professional errors. 
  • Consider Industry Requirements: Next, think about the typical insurance requirements in your specific industry. Based on industry norms, you should get a pretty good idea of what coverage(s) are necessary. 
  • Determine Your Budget: Evaluate how much your business can realistically afford to pay per month in premium costs. Then in turn, consider the level of coverage your business actually requires. While you never want to be under-insured, for a small business, a policy with a hefty coverage limit may not be necessary.

Consult with an EZ.Insure Expert

If you’re still unsure of which coverage type is right for your business, or if you need both, seek the help of an expert insurance agent at EZ.Insure. Working with a licensed agent ensures that no detail is overlooked in regards to your business, so that you’re matched with the most optimal policy type. They’ll also be there to help with every step of the enrollment process, and answer any questions about the selected policies details, so you walk away covered and confident! 

Don’t Leave Your Business Exposed—Get Covered Today!

Liability coverage is critical for protecting your organization from unanticipated hazards and costly lawsuits. Whether you require general, professional, or both forms of liability insurance, the appropriate policy will keep your organization safe and secure.

 

Ready to get started?  EZ.Insure is here to help! For a fast, free quote, simply fill out a form on our site, or give us a call at (855)-694-0047 today!

 

Looking for more information on securing your business? Check out our resource library, that’s home to tons of helpful articles all aimed to help small businesses succeed today and for years to come. 

 

Do You Need Home-Based Business Insurance? 5 Questions to Ask

There are many benefits that come with running your business from home. This includes convenience, flexibility as well as comfort. With all this being said, many home-based business owners don’t consider the risks associated with running an organization from their house. This poses the question — “Do I actually need insurance for my home-based business?”

 

While you may scoff at the question at first, thinking it’s unnecessary, the truth is that just like any other business, having the proper coverage provides essential protection safeguarding everything you’ve worked for. But don’t just take our word for it. Instead, to help you make an educated decision about your options, we’ll delve into five critical questions to ask yourself. When it’s all said and done, you’ll have a solid understanding of why home-based business insurance is so essential. 

 

 

Question #1: Do You Have Expensive Inventory or Equipment?

Infographic titled 'Do You Need Home-Based Insurance? 5 Questions to Ask Yourself' with five key questions listed.

One of the first things to think about is whether or not your home-based business involves inventory or expensive equipment. Your homeowners’ insurance probably doesn’t cover business-related objects in the case of damage, theft, or loss, even if you work from home.

 

Think about things such as your laptop, tools, technology or any other equipment that’s vital to your business operations. Then consider any inventory. Do you sell goods? If the answer is yes, these items could also be in danger without the proper protection. In the unfortunate case of a fire or break-in, you may have to replace these valuables out-of-pocket.

Why This Question is Important

  • Your operation relies on your inventory and/or equipment and without it your business is probably not functional. 
  • Without home-based business insurance, replacing these items may be very expensive or unaffordable.
  •  Homeowner policies alone usually don’t cover inventory or equipment losses.

Question #2: Do Clients or Customers Ever Visit Your Home? 

Do you ever hold meetings at your house office with customers or clients? If so, you might be putting yourself in danger for responsibility if an incident occurs. For instance, you can be liable for a client’s medical costs if they trip and fall on your property, leading to an expensive lawsuit.

 

General liability insurance covers property damage and physical injury claims made by third parties. Even if your place of business is your house, this type of coverage  it’s still necessary for any company that deals with clients or consumers face-to-face.

Why This Question is Important

  • Hosting clients without the proper home-based insurance leaves you liable in the case of an injury
  • General liability coverage will take care of the costs of lawsuits or claims relating to an accident, so you won’t have to pay out of pocket. 
  • Having general liability coverage puts clients at ease and bolsters your reputation as a responsible business owner. 

Question #3: Could a Lawsuit Affect Your Financial Stability? 

If you own a small business and are on a strict budget, a lawsuit could be extremely detrimental to your business. Even a small claim could have a huge negative impact. In addition to an injury-related incident, clients may also file lawsuits if they think you’ve committed a professional error or if they feel you failed to provide a promised good or service.

 

Unfortunately, the legal and court costs stemming from these types of situations can add up quickly and jeopardize your finances. That’s why it’s so crucial to consider investing in professional liability coverage on top of the general liability protection that we discussed above. 

 

Why This Question is Important

  • Small businesses suffer far more than large corporations in the result of lawsuits since they generally don’t have nearly as much funds or resources. 
  • Professional liability coverage takes care of legal fees, court fees, and other payouts associated with a business error. 
  • Without coverage, a lawsuit could be so expensive that you’re forced to sell your assets. 

Question #4: Do You Rely on Your Home-Based Business for Income? 

If your home-based business is your main source of revenue, you should think about how an unplanned disruption could affect it. What would happen if your home was damaged by a fire, a natural disaster, or some other unanticipated incident that prevented you from using it for several weeks or even months?

 

Business interruption insurance acts as a safety net paying for lost income during these unexpected down times. This coverage guarantees that, even while your business is recuperating you can continue to fulfill your financial and client obligations, pay your bills, and provide for your family.

Why This Question is Important

  • Without business interruption insurance, an unexpected event may force your business to shut down entirely, therefore bringing your income to a halt. 
  • This coverage oftentimes provides relief in the form of a new, temporary space to operate out of. 

Question #5: Do You Use a Vehicle for Business Purposes?

Smiling man wearing a cap sitting in the driver's seat of a white van.

While this question isn’t directly related to your home, many remotely-based entrepreneurs utilize vehicles in their day-to-day operations. Unfortunately, if you’re regularly using a car, truck or van for business purposes, your personal auto coverage probably won’t cover it.

 

Consider tasks such as delivery, client visits, or inventory transportation. If any of these are applicable to your company, and you aren’t properly covered, you’ll be financially liable for any accidents on the job. This is where commercial auto insurance comes in, protecting your business vehicle in the case of an accident during the work day. 

 

Why This Question is Important

  • When using a vehicle for purposes related to your business, personal car insurance policies will not be enough. 
  • If an accident occurs while you’re conducting business, you won’t have to pay out of pocket. 
  • Without commercial auto insurance, you’ll be held liable for any vehicle damage, personal injuries or lawsuits stemming from the accident. 

Final Thoughts on Home-Based Business Insurance 

If you run a business from the comfort of your house, investing in home-based business insurance is crucial. Even if you still aren’t sure whether it’s necessary for your organization or not, just review the five questions listed above. If your answer to any of these questions is yes, home-based business insurance is likely a smart investment.

 

It’s important to get ahead of potential risks before they actually take place. If you decide not to, it could cost you an exorbitant amount of money, or even your entire business. So don’t wait for any surprises, instead, take time to review your coverage options, and find a plan that best fits your small businesses needs. 

Visit EZ.Insure For Your Business Insurance Needs

We understand that shopping for business insurance isn’t fun and it can be confusing too. Luckily for you, there’s a platform that makes finding insurance quick and easy. We’re of course talking about EZ.Insure. At EZ we pride ourselves on the seamless, simple platform that we’ve built out. All you have to do is enter your ZIP code and in a few minutes you’ll be matched with a customized insurance quote for free! We also have side-by-side plan comparison tools so you can be sure to find the perfect coverage. To get started, fill out the form above or call us directly at 855-694-0047 to get started!

Professional Liability vs E&O vs Malpractice

It’s time to settle something once and for all. Are all types of liability insurance created equally? The quickest answer is, of course, no. General liability covers the physical damage that we often think of when we think of commercial insurance: property damage or a personal injury that happens on your premises. But then we come to the policies that protect businesses against the costly mistakes they could make: professional liability, errors & omissions, and malpractice. If you’re wondering whether these three terms can be used interchangeably, read on for clarification.

Professional Liability vs E&O

The image shows a document titled "E&O Errors and Omissions Insurance," with the title in bold, capitalized letters. A pair of eyeglasses and a pen are placed nearby, suggesting a professional and business-related context. The document appears to be related to insurance coverage for professionals in case of mistakes or oversights in their work

Professional liability and errors & omissions insurance, or E&O, are the terms that are often used interchangeably. Historically, these two types of policies were actually different. Professional liability was bought by professionals such as doctors and lawyers. E&O was for semi-professionals such as accountants and real estate agents. Nowadays, most people don’t make this distinction between them, and use either term when talking about insurance that covers mistakes or damages that do not involve injury to people or property. 

There is, however, a small difference between the terms “professional liability” and “E&O.” Professional liability is actually more of an umbrella term that includes policies like E&O, directors and officers liability insurance (D&O), and employment practices liability insurance (EPLI). 

This small difference is also related to what type of business you have. If you’re a consultant, engineer, or accountant, you’ll probably have a professional liability policy. These policies are also highly recommended for estheticians, hairdressers, yoga instructors, personal trainers, or anyone who offers a service to customers that has a risk of going wrong. However, if you’re an accountant, real estate agent, tech professional, or anyone who could make an “error” or “omission” when giving advice, then the policy you buy is more likely to be called E&O insurance. 

Malpractice A gavel and stethoscope placed side by side on a black surface with the word 'Malpractice' written in chalk, representing the concept of medical malpractice

If professional liability and E&O are essentially the same thing, then is professional liability the same thing as malpractice insurance? Well, no. As described above, the term “professional liability” is an umbrella term for insurance policies that protect businesses against lawsuits stemming from mistakes. Malpractice is a type of professional liability insurance, but professional liability is not necessarily malpractice insurance. 

Malpractice is industry-specific, required for doctors and often bought by lawyers. The idea behind the coverage is essentially the same: professionals pay premiums to be covered in case a patient or client alleges damages due to negligence. What is different in this case is who it covers. 

Insurance can be complicated. It can often seem like you need to learn a whole new vocabulary just to figure out what your business needs. Remember, you need to be covered for all eventualities. You don’t want to see all of your hard work go to waste because of one costly mistake. You wouldn’t risk your property being uninsured, and you should be just as serious about insuring yourself against unseen damages. If you are offering a service or advice to your customers/clients, then you should have some form of professional liability insurance.

If you’re looking for the right insurance for your business, EZ.Insure is the best place to look. We offer instant quotes and access to local, knowledgeable agents – for free! We’ll answer all of your questions, and will find you just what you’re looking for at just the right price. Easy as that. To get started simply enter your zip code in the bar above. You can also speak to a licensed agent by calling (855) 694-0047.

Business Insurance For The Self-Employed

 

More and more Americans are leaving their cubicles to work on their own. Well, why not? You decide how to run your business. You decide when to work. Who is on your team is up to you. Those are some great perks. So it’s not surprising that there are 15 million self-employed professionals in the American workforce right now, and that number could nearly triple in the next two years.

 

But there are some things you can’t control or plan for in business or in life. What if something goes wrong on the construction site and one of your clients gets hurt? Or what if you get hurt in a freak accident and can’t work anymore? Those “what if” questions are enough to turn the dream of a self-employed entrepreneur into a nightmare. So, if you work for yourself, you need insurance to protect yourself, your family, and your business. You’ve worked too hard to leave anything unprotected. But how do you know which types of insurance for self-employed people need and don’t need? Let’s look at types of insurance that will make you feel safe.

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Self-Employed Business Insurance

Whether you’re a plumber or a freelance writer, there’s always a chance of something going wrong with your job. Some people are more likely to get hurt on the job, while others may be more likely to be sued. Insurance for self-employed individuals is crucial to cover the risks of your work. Here are the four most important types of business insurance to look into.

1. General Liability 

Liability insurance will protect you financially in the event that someone sues you for damages after slipping and falling in your coffee shop. Or breaking an expensive vase while cleaning a client’s home. Slander suits are also covered by general liability insurance. This sort of protection is available both as a separate policy and as part of a business owner’s policy.

2. Professional Liability

Listen, we all have our flaws, and everybody messes up sometimes. This is where professional liability comes in handy. It’s insurance that protects you in the event that a client is harmed as a result of a service you provided or advice you gave. It is also known by its more common name, errors and omissions insurance. Professional liability insurance covers financial losses in the event of injury or damage. While general liability insurance covers injuries and damages to property.

3. Business Owner’s Policy (BOP)

A business owner’s policy (BOP) gives your small business protection against a wide range of claims. It does this by combining two types of coverage. Commercial general liability insurance and Commercial property insurance are both parts of its coverage. 

 

The part of a BOP called “general liability” protects your business in case someone makes a claim against you or your business. General liability insurance protects you from lawsuits if something like a customer slipping on a wet floor. Or a faulty product causing damage to a client’s property. Or a claim that your products or services hurt someone. It can also protect you from libel, slander, and certain advertising lawsuits.

 

The property part of a BOP helps protect the buildings, equipment, furniture. And stock that you own, rent, or lease for your business. It helps pay to fix or replace things that are stolen, broken, or destroyed, even if they don’t belong to you but were in your care. It can also pay for things like rent, payroll, and other bills while your property is being fixed or replaced after a fire or other covered loss.

4. Workers’ Compensation

If you have employees, no matter the nature of your business, you are required by law to carry workers’ compensation insurance. Workers’ compensation insurance, also known as “workers’ comp,” is a mandatory type of coverage that will provide financial support to your staff if they sustain an injury while performing their job duties. It serves as a disability insurance pool that reimburses workers monetarily and/or provides medical care in the event of an illness or injury. If you want to learn more about the workers’ compensation laws in your state, you can visit the state by state guides on our site.

5. Cyber Liability

Physical dangers such as injury and property loss are ever-present in the business world. However, there are dangers associated with using technology that could affect your company. Data leaks and hacking are just two examples. Information about customers’ identities or medical histories that you store on company computers is a prime target for hackers. In order to quickly recover from a data breach or cyberattack, it is crucial that your company be covered by data breach or cyber liability insurance. 

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Self-Employed Health Insurance

If you’re in business for yourself, it’s important to have a basic understanding of health insurance. As a first step, you should enroll in a health insurance plan. If you do not have health insurance this year, you could be fined by the government depending on what state you live in. More importantly, you and your loved ones are taking a serious risk if and when a medical emergency arises.

 

In addition, if you have been relying on your employer to provide health coverage, you may be in for a rude awakening when you compare prices. Since you no longer have an employer to split the cost of health insurance with, you must do so on your own. The good news is that self-employed professionals can reduce their tax liability. The quickest way is by deducting the money they spend on health insurance premiums.

How To Reduce The Cost Of Self-Employed Health Insurance

A high-deductible health plan (HDHP) is a good option for those looking to save money on health insurance premiums. A higher deductible on your health insurance plan means you’ll have to pay more out of pocket for medical care before your policy kicks in. However, the trade-off is cheaper premiums every month.

 

Opening a health savings account (HSA) is an option with your high-deductible health plan, making it an even better value. The funds built up in a health savings account (HSA) are exempt from federal income tax, allowing you to save tax-free for future medical expenses. It’s a good idea to consult with an EZ agent, who can explain your options and guide you toward a policy that works for your finances and your loved ones. They will assist you in locating competitive rates and suitable protection.

Self-Employed Disability Insurance

If you’re self-employed and become ill or injured and unable to work, disability insurance could help replace some of your lost income. There are both public and private options for disability insurance. The government provides some options, such as the Social Security Administration and some state programs. 

 

When you’re self-employed, you can buy your own disability insurance policy rather than participating in a potentially more expensive group plan through your employer. You may still be eligible for a group policy through your spouse’s employer or a trade group. You may have more options with an individual policy, but the premiums may be higher. Policy features such as the waiting period, riders, and the definition of disability may be up for negotiation.  

Short vs Long Term Disability Insurance

Disability coverage comes in two flavors: long term and short term. Long term disability insurance typically has an elimination period of several weeks to months and a benefit period of several years up until retirement. There may be no waiting period or one as long as two weeks before benefits begin with short term disability insurance. Although long term disability insurance that pays out until retirement age is ideal, a short term policy could be worthwhile as well. In general, shorter waiting periods and longer benefits payout periods tend to come with higher premiums.

 

For an additional premium, you can secure coverage that the insurance provider can’t revoke for any reason (including your failure to pay premiums) with a noncancelable policy. With guaranteed renewable policies, the insurer cannot cancel your coverage. But they can raise your premiums along with other customers in your rating class.  Additional riders, such as cost-of-living adjustments (COLA), residual benefits in the event of a partial disability, premium refunds for going claim-free, premium waivers in the event of a disability, and so on, can be purchased for an additional cost.

EZ Can Help

Working independently or as a freelancer allows for more freedom and a better work-life balance. One disadvantage is that you will be responsible for arranging your own insurance. It’s essential that you do this. Since an accident or emergency can cause financial ruin if you don’t have the proper insurance.  As a result, self-employed people who don’t have insurance are taking a risk by not doing so. However, EZ can help! We offer free instant quotes on business insurance for the self-employed and we can even help you find the best plans for you. Enter your zip code in the box below or call one of our licensed agents at (855) 694-0047 to get started.

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