What Is LLC Insurance?
For limited liability companies (LLC), LLC insurance is meant to help protect them from various liability claims. This type of small business insurance helps protect your LLC from claims of bodily injury caused by your business, employees, or products, as well as professional errors.
A limited liability company is a business structure approved by state regulations. An LLC protects the business owner’s personal property and possessions in the case of business liability claims or legal charges. In other words, the business property and possessions are separate from the owner’s personal possessions.
Registering an LLC does not protect your business from the various risks it may be exposed to. Consider protecting your business with an LLC insurance policy.
Many small businesses, which are LLCs, opt for an LLC insurance policy, as well as small business insurance coverages that are available to them. Depending on the industry your business is in, LLC insurance may be necessary. Most states require businesses with employees to have workers’ compensation coverage at a minimum.
What Does LLC Insurance Cover?
The Hartford’s LLC insurance helps cover your business from financial losses caused by risks to your property and income. This can include things like theft, damage and lawsuits. Our LLC insurance can help provide liability coverage to help protect you, your business and your employees from the unexpected.
As the owner of an LLC, consider two of the most important types of coverage: professional liability and general liability insurance.
Professional Liability Insurance for LLCs
As a business owner, you try your hardest to keep your customers happy. But sometimes, mistakes happen. The Hartford’s professional liability insurance helps protect you and your LLC if you’re found negligent in the professional services provided to a customer. Also known as errors and omissions coverage or E&O coverage, this insurance can help cover the costs of a claim that the product or services provided caused a customer financial harm.
For example, let’s say you own an accounting firm. A new client comes to your business and asks for your help filing a tax return. You work with the customer to gather the necessary paperwork and information to file the return. It turns out a clerical error resulted in the customer having to pay thousands of dollars in fees. The customer files a lawsuit against your company, claiming your mistake led to the additional fees. Professional liability insurance can help cover the legal costs related to this claim.
General Liability Insurance for LLCs
A general liability insurance policy can help protect your LLC from potentially damaging costs of liability claims. These liability claims can arise from the most common business situations. A general liability insurance policy can help protect your LLC from claims of bodily injury, property damage, and lawsuits.
Let’s say a customer visits your business. While walking around your business, he trips over a loose wire on the floor. He falls down and ends up breaking his wrist. A general liability insurance policy can help cover your customer’s medical expenses. Without this coverage, you or your business could be financially responsible for his medical bills.
In another example, say you put out an advertisement for your business. The ad includes a photo you found on the internet. The owner of the photo sees your ad and files a copyright infringement claim against your business. General liability insurance can help cover these costs.
Additional Coverages to Consider With LLC Business Insurance
There are different types of small business insurance. Just as every business is unique and faces different risks, small business insurance is meant to help protect companies from various liabilities. From data breaches to car accidents, The Hartford’s Small Business Insurance can help protect your business from different risks.
Here are some additional insurance coverages to consider:
- Workers’ compensation insurance – Most states require businesses with employees to have workers’ compensation insurance. This provides benefits to employees whose injuries or sicknesses are work-related. Benefits include help covering medical expenses and replacing lost wages from missing work.
- Commercial auto insurance – This coverage helps cover the cost of property damage or medical expenses resulting from an auto accident if you or your employee is found to be at fault. If your business owns, rents, or leases vehicles, consider this coverage.
- Business income insurance – If your business is damaged and has to be closed while repairs are being made, this coverage can help replace the lost income. This allows you to pay ongoing expenses, such as rent, payroll, or loan payments.
Why Does My Business Need LLC Insurance?
Your business may need LLC insurance to:
- Protect your business’s property and possessions.
- Lessen the risk to your personal property and possessions.
- Help prevent costs if you are sued by a customer or competitor.
Businesses providing professional services to a customer or client could be at risk of a liability claim. An LLC insurance policy can help protect these businesses.
How Much Does LLC Insurance Cost?
The cost of LLC insurance depends on different factors. The coverages you need depend on the type of business you run. And depending on how much risk your business is exposed to, this could affect the cost of your insurance policy.
For example, an accounting firm’s LLC insurance cost may be lower than a landscaping company because the coverages are different. The landscaping company may need a commercial auto insurance policy, while the accounting firm may not because employees may not need to travel for work. In addition, if both businesses need workers’ compensation insurance, the cost may be higher for the landscaping company because of the risk associated with the job.
To find out how much LLC insurance will cost for your business, get a quote today. If you prefer to speak with one of our specialists, please call 1-855-829-1683. The Hartford has been helping small business owners for over 200 years. If the unexpected happens to you, your business, or employees, we’re here to support you. Rest easy knowing your business is our top priority.