LLC Insurance

As the owner of a limited liability company (LLC), you’ve already taken a vital step to protect your personal assets from business liabilities, but even so, your business still faces risks. Without the proper insurance coverage your company could be exposed to costly lawsuits, employee-related claims, property damage, cyber threats and much more.

 

LLC insurance works by protecting your businesses finances and assets, so you can focus on running your operation with confidence.

Jump To:

• What is a Limited Liability Company (LLC)?

• What is LLC Insurance? 

• What Types of Insurance Does an LLC Need? 

• How Much Does LLC Insurance Cost for Small Businesses?

• Why Do LLCs Need Business Insurance? 

• FAQS

• Get LLC Insurance Today!

What is a Limited Liability Company (LLC)?

A limited liability company, also known as an LLC, is a type of business structure that separates the assets of an owner from the business itself. In other words, if an LLC faces legal action or owes a debt, the owner’s personal assets, such as savings, investments or personal property are protected. Additionally, LLCs typically provide owners with tax advantages. The combination of personal liability protection, tax flexibility and the simplistic structure, make LLCs a popular entity choice among small business owners in particular. 

What is LLC Insurance? 

LLC insurance encompasses a wide range of business insurance policies, all of which are designed to protect LLCs against financial risks. Even though the personal assets of an LLC owner are protected from liability, the business itself can still be held liable if the company experiences a lawsuit, property damage or another damaging event. This is where LLC insurance comes in, so your company doesn’t have to suffer financially. 

What Types of Insurance Does an LLC Need?

While the overarching term “LLC Insurance” refers to numerous types of insurance, policies can be customized to fit your business specific needs. In general, many LLCs invest in the following types of coverage:

 

• General Liability Insurance: Protects against claims of bodily injury by third-parties, property damage, and advertising injury. General liability coverage is often considered the most important policy for any LLC. 
• Professional Liability Insurance (Errors and Omissions Insurance): Covers businesses that offer professional services or advice regarding claims or negligence, errors, or failure to deliver promised services. This coverage is commonly adopted by professionals like attorneys, doctors, consultants, and accountants. 
• Product Liability Insurance: Essential protection for companies involved in manufacturing, distributing or selling goods. It covers your business if claims occur relating to injury or damage from mislabeled or defective products. 
• Commercial Property Insurance: Helps to pay for the replacement or repair of damaged and/or destroyed physical assets caused by natural disasters, fires, theft or vandalism. Typically covered assets include buildings, offices, inventory, equipment, and furniture. 
• Business Owner’s Policy (BOP): Combines general liability and commercial property insurance into one policy, making it cheaper than purchasing each policy separately. 
• Workers’ Compensation Insurance: Legally required in all states except for Texas, workers’ compensation covers the medical expenses and lost wages of employees that become sick or injured due to work-related events. 
• Cyber Insurance: This policy covers the high costs often associated with data breaches or cyberattacks. Cyber insurance is essential for any business dealing with large amounts of consumer information or data. It usually covers expenses such as legal expenses, data restoration, and customer notification. 
• Commercial Auto Insurance: Commercial auto insurance is required in almost all states if your business uses vehicles for operational purposes. It works by covering costs associated with vehicle accidents, property damage and liability claims. 
• Business Interruption Insurance: Replaces lost income if your business is forced to temporarily shut down due to a covered event. Business interruption insurance generally helps pay for fixed expenses, employee wages, taxes and relocation costs.
• Small Business Health Insurance: Also referred to as group health insurance, this policy aims to provide LLC employees with essential healthcare benefits. These benefits include, doctors visits, hospital stays, emergency care, preventative care, mental health services and much more!

How Much Does LLC Insurance Cost for Small Businesses?

The cost of LLC insurance for a small business is not always straightforward. This is because every company has different needs, and the final cost will depend on the specific needs of your business. When determining the cost of business insurance for an LLC, insurers usually take the following into consideration: 

 

• Number of Employees: For certain policy types such as workers’ comp, more employees means a higher cost. On the other hand, some insurers offer cost-saving opportunities for businesses with a high number of employees, so it all depends on your needs. 
• Geographic Location: Policy rates vary from state to state due to differences in regulations and risk factors. 
• Industry: High-risk industries such as construction may experience higher premium costs. 
• Claims History: Businesses who have a lengthy history of lawsuits or claims may have to pay more in premiums costs. 
• Number of Policies Required: If your business only needs one or two of the above listed insurance types, you’ll pay less than a business who requires all of them. 
• Coverage Limits: The higher your coverage limit is, the greater financial protection you’ll have, but in turn, your premiums will also cost more than a policy with a low coverage limit. 

The exact price that you’ll pay for LLC insurance depends on all of these factors. It’s also important to keep in mind that professions that work on other people’s property on a regular basis tend to have higher insurance costs overall. 

Why Do LLCs Need Business Insurance?

No matter the entity type, all businesses face risks. Despite the fact that your personal assets are protected if you own an LLC, your business assets are still at stake. Consider this— if your company is sued by a client, faces employee claims, experiences major property or intellectual damage your company will have to pay out of pocket to cover those expenses if you don’t have the right coverage. 

 

Additionally, in some industries, certain policy types are required before clients will sign contacts, or engage in partnerships. Not to mention the fact that it provides people who receive your goods or services with peace of mind, since you’re covered if an incident occurs.

FAQs

Is LLC Insurance required by law?

 

Some insurance policies are required by law depending on the state you operate in and your business needs. The main two policy types that are legally required are workers’ compensation (required in all states except Texas), and commercial auto insurance if your business uses vehicles in its operations (all states except New Hampshire). Additionally, some clients and landlords require businesses they’re working with to provide proof of general liability insurance. 

 

What does an LLC itself protect you from? 

 

Due to its unique structure, the establishment of an LLC protects its owner(s) from personal liability relating to business lawsuits or debts. In other words, if your business is sued or owes someone a debt, as an LLC owner your personal assets won’t be at stake. 

 

What is the most important type of insurance for LLCs?

 

While there’s no definitive answer to which type of coverage is the most important for LLCs, many companies start with general liability, since it protects against the most prevalent business risks (third-party injury and property damage). Other common LLC policies include professional liability, product liability, workers’ compensation, commercial auto, cyber liability and more. With that said, it’s important for every business to evaluate their unique needs and risk in order to determine which coverage types are essential.

 

What is the downside of an LLC?

 

While LLCs offer benefits like tax-flexibility and liability protection for owners, they usually cost more to form and maintain when compared to sole proprietorships. Additionally, most states require LLCs to pay annual reporting and tax fees.

Get LLC Insurance with EZ.Insure Today!

Despite the unique protection the limited liability companies provide owners with, your business still needs protection. The future is full of twists and turns, so instead of waiting for the unexpected, get LLC insurance today and protect your company’s future!

 

EZ.Insure makes the process quick and simple—our platform offers access to free quotes, side-by-side plan comparisons, and guidance from our licensed insurance experts.

 

To get started, click the button below or call us now at (844)-770-0876.