The Real Costs of Start-Up Business Insurance: What You Need to Know
Starting a business is an exciting venture. As a new business owner, you have a lot on your plate, from hiring employees to sourcing materials and marketing your product or service. However, one essential aspect that many start-up entrepreneurs overlook is insurance.
When it comes to insurance, there are various types of policies that you may need, including general liability, workers’ compensation, commercial property, and business interruption insurance, to name a few. But what are the costs of these insurance policies for start-up businesses?
What Is General Liability Insurance?
One type of insurance you may need is general liability insurance, which covers damage caused by your business to third parties. This policy usually includes bodily injury, property damage, and personal and advertising injury. The cost of general liability insurance can vary depending on factors such as the type of business, location, and annual revenue. On average, you can expect to pay between $500 to $3,000 per year for this policy.
Workers’ Compensation Insurance
Workers’ compensation insurance is another policy that is vital for most start-up businesses. This policy covers medical expenses and lost wages for your employees if they get injured or fall ill due to their work. The cost of workers’ compensation insurance can vary depending on the state, industry, and the number of employees you have. On average, you can expect to pay between $0.75 to $2.74 per $100 of payroll.
Commercial Property Insurance
Commercial property insurance covers the cost of repairing or replacing your business property, including buildings, equipment, and inventory, in case of fire, theft, or natural disasters. The cost of commercial property insurance can vary depending on factors such as the location and value of the property. On average, you can expect to pay between $1,000 to $3,000 per year for this policy.
Business Interruption Insurance
Business interruption insurance covers the loss of income due to unexpected events that force your business to shut down temporarily, such as a fire or natural disaster. This type of insurance can help cover expenses such as payroll, rent, and utilities until your business can resume operation. The cost of business interruption insurance can vary depending on factors such as the industry, size of the business, and the length of coverage. On average, you can expect to pay between $750 to $1,500 per year for this policy.
Conclusion
In conclusion, insurance is a crucial aspect of starting a business, and the costs of these policies can vary significantly depending on factors such as the type of business, location, and annual revenue. It’s essential to research and shop around for the best insurance policy that suits your business needs and budget. Remember that the cost of insurance may seem like an added expense, but it’s a small price to pay for the peace of mind that comes with knowing that your business is protected against unforeseen events.
