Business Liability Insurance Texas Cost – If you’re a startup founder, researching different insurance policies might not be at the top of your list as you start your company and try to grow your customer base. If you’ve tried to look into it at all, you’ll probably struggle to find an accurate estimate of business insurance costs for beginners.
Most of the insurance-related content available online is directly or sponsored by insurance companies. This is similar to finding honest reviews for web hosting providers. Therefore, finding a fair allocation of policies and costs can be difficult. Insurance is a sales heavy industry, and they would rather get your contact information than give it to you without talking to you.
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We decided to put together a complete price guide. In this, we will cover all types of insurance that your business may need.
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This post has you covered from basic policies like general liability insurance to more complex policies like cyber liability insurance.
Startup policies can cost anywhere from $500 to thousands of dollars per year. You might be thinking that this isn’t a very helpful estimate… and you wouldn’t be wrong.
For starters, insurance isn’t likely to break the bank. For example, Buffer is a startup that is exceptionally open about its finances; Back in 2018, they shared their budget for the entire year. Commercial insurance was a particularly small expense—included as only 0.6% of their office expenses. Health insurance and workers’ compensation are included in team benefits. These benefits make up 4.6% of their operating costs.
In their 2016 budget, health/employee insurance coverage was 1.9% of monthly expenses or about 2.9% of total premiums, at $6,635 per month.
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But insurance is a long way from offering SaaS subscriptions, so it’s impossible to provide a one-size-fits-all answer based on one company’s experience. You may pay a higher or lower percentage of premiums depending on your company size, industry and state.
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Most small business incidents are covered by professional liability, workers’ compensation and general liability insurance. Does that mean your startup needs all three?
There is no right answer. As startups and SMBs are very different in terms of assets, personnel and risks, we have divided each policy according to the specific part of your business that it covers.
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If you already know the required policies, you can skip to the pricing section below.
If you meet with prospects, customers, and sell actual products or services in person, this type of policy is generally a good idea. Although not legally required by law, general liability insurance is considered essential for growing businesses that want to protect themselves from general liability lawsuits.
Even if you’re a sole proprietor who works with freelancers out of your own home, this policy is still generally a good idea.
Any property damage or expenses related to physical harm or humiliation caused to your employees—anything from a possible slip on a banana peel, an employee spilling their coffee on a Xerox machine, to a lawsuit caused by a product release or advertising campaign.
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Times have changed. Many startups and even small businesses have opted to move to shared offices and co-working spaces rather than renting dedicated office buildings in the face of evolving technology. In most cases, these co-working companies already have insurance policies covering their properties, and will not require any insurance from your company.
However, if you plan to lease a traditional commercial property from a landlord, he or she will require insurance before completing the lease.
Some homeowners only require general liability insurance, while others may require property insurance as well. You may also know this as “slip and fall insurance”.
General liability insurance covers costs associated with damage to any fixed assets and injuries sustained by your company’s employees as a direct result of those actions.
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Property insurance premiums vary from policy to policy. However, it will provide more comprehensive protection for your (or your landlord’s) property against serious water or mold damage from accidental damage to furniture, walls, or floors.
A business owner’s policy is a combination of general liability insurance and commercial property insurance, covering all of the above.
If your company directly employs part-time or part-time workers, your company will need to obtain workers’ compensation insurance. You should also carefully consider the EPLI policy to protect yourself from lawsuits by current/former employees.
By 2021, this policy is required by law for most employers. In the United States, it is regulated at the state level. Therefore, specific requirements and costs vary from state to state.
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Because of the legal requirements involved, the process of obtaining workers’ compensation insurance for your company should be fully automated. That said, you’ll still need to double-check your state’s specific requirements to make sure you meet them.
If an employee suffers an accident or becomes ill on the job, workers’ compensation insurance covers a portion of medical expenses and lost wages.
The percentage of lost wages that it covers depends on the individual policy. (For a claim to be valid, the injury/illness must be a direct result of the employee performing his duties on the job.)
Of course, employee illness isn’t the only risk when hiring a permanent employee. When they’re on the clock, your employees are working on behalf of your company.
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Your company is responsible for the behavior of your employees in the behavior of other employees. An EPLI policy protects you from lawsuits caused by Apple’s bad practices.
Many startups don’t have a dedicated HR staff, making the processes involved in employee insurance more complicated.
In the United States, where laws vary from state to state, compliance is very difficult. It is often a good idea to hire help.
A professional employer organization, or PEO, is a company that hires workers on behalf of your company. They ensure that every new employee is insured according to their internal rights and complies with all employment laws.
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They usually have EPLI policies as well, but the limits are limited, and very general. Risks unique to your industry or business model may not be well addressed.
At, we use JustWorks to manage all of our US employees. This helps us stay compliant and ensure all our employees get their due (and then some).
Are you providing enhanced services to companies or publishing content online?—Errors and Omissions Insurance (also known as Professional Liability Insurance)
If your product or service directly affects how the company generates revenue or handles sensitive information, such a policy is a good idea. A mistake on your part that adversely affects it is a guaranteed case.
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A small startup that sells an internal collaboration tool that handles 0 sensitive information will have a completely different policy than a payment processing startup. A digital agency that consults on million dollar campaigns will have different needs than a small design agency.
It covers everything from errors in code to mistakes and errors that cause critical use to problems with the physical product — professional negligence when you fail to deliver a product or service in accordance with a contract.
A project scope dispute where the client does not feel that your company has delivered the final product as outlined in the initial project discussion.
Leo Welder knows this better than anyone. Like the scene in the movie, his start-up company choosewhat.com was sued for trademark infringement for using the word “efax”.
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After the incident was already costing the company hundreds of thousands of dollars, he opted to pay an extra few hundred dollars a year for professional liability.
A standard policy covers up to one million dollars in legal expenses. Just imagine how much money Leo can save.
Almost every modern startup is heavily dependent on the Internet and data. If your company handles sensitive information directly, or your customers use it to do so, you should consider a cyber liability policy.
This policy covers worst-case scenarios resulting from damage, leaks, exploits, or excessive downtime. For example, legal costs resulting from hacking, data leaks, high usage, downtime and lost profits.
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General liability insurance for a startup or small business typically costs between $400–$750 per year. That means between $42 and $92 per month.
There is no price to pay for the peace of mind you get. Therefore, you protect your business from basic liability costs and damages.
According to Insureon, the average premium is $741, and the average is $421 per year. The average salary for the startup, media, IT, and consulting industries is between $505 and $640 per year.
Progressive Commercial has an average payout of $636 and an average customer base of $684. TechInsurance has customers with an average premium of $336 and an average of $340.
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Trusted Choice recommends $500 per year for a sole proprietorship business, but up to $3,000 per year.
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