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Your Ultimate Guide to Business Insurance in California

Your Ultimate Guide to Business Insurance in California

Nov 10, 2021

Business Insurance

Your Ultimate Guide to Business Insurance in California

Are you thinking about launching a startup and are curious about small business insurance in California? You will certainly need to cover your valuable assets, such as equipment. However, every business is unique and needs to customize its insurance solutions by working with an insurer that supports its business model. Here's your ultimate guide to business insurance in California to help you secure the right coverage for your enterprise.

Types of California Business Insurance Coverages

There are many forms of business insurance in California, so you need to consider various options. The primary type of coverage businesses need is for liability and property damage. A small business with a staff and company vehicles will also need workers' comp and commercial auto insurance.

General Liability Insurance

One of the most common types of business insurance is general liability insurance (GLI) because it covers litigation costs if someone sues the company. It's usually impossible to predict a lawsuit, but businesses still face known risks that can manifest into court cases. No one expects anyone to be injured on their property, but injuries still occur. GLI covers many primary types of lawsuits a business might face, such as infringement or defamation cases.

Commercial Property Insurance

Whether you own a business outright, including the property or rent space, your business can benefit from commercial property insurance. It pays for repair and replacement costs to the building and its contents due to damage caused by a disaster. As with all insurance policies, you will need to read the plan carefully to know exactly what it does and does not cover.

Like homeowners insurance, commercial property insurance comes in basic plans with multiple options. Ask your insurer about the different types of add-ons related to commercial property insurance. Find out if you can get a discount for bundling your various add-ons together in one plan. An alternative to consider is a business owner's plan (BOP), which combines commercial liability with commercial property coverage.

Business Income Insurance

If your business is devastated by fire, wind, or theft, it can benefit from business income insurance. When a company is shut down due to disasters, it doesn't have to suffer further financial losses. Every small business insurance in California with employees should consider this type of coverage.

Minimum Liability Insurance in California

California, like many other states, does not require liability insurance for business. At the same time, the state allows high legal settlements without regulated caps. That's why business owners and managers need to take the initiative to figure out their own insurance needs. Some businesses have minimal risks and don't require much coverage, while construction and mining companies face enormous human health and safety risks. A sensible safety net for the ordinary business is to carry at least $1 million in liability coverage.

California Workers' Compensation Insurance

One of California's required forms of business insurance for businesses with at least one employee is workers' comp. Fines can be expensive if your business fails to comply with state law regarding workers' comp. This insurance pays for accidents and illnesses that employees encounter on the job. In addition, it pays benefits to employees for medical bills and lost time at work related to the claim.

Commercial Auto Insurance

Commercial auto insurance works like personal auto insurance, although individual policies don't cover business use. For example, your business will need this insurance if it owns, rents, or leases vehicles associated with work.

California also requires you to carry this insurance if your employees use their vehicles for work. Costs are shaped by location, driving record, claims history, and other factors. If your company has a fleet of trucks or vans, you might be able to negotiate a lower rate per vehicle.

You must carry minimum commercial auto insurance required by the state. For California businesses, that means each vehicle must be covered for the following:

  • $5,000 property damage liability per incident
  • $15,000 bodily injury and death liability per person
  • $30,000 bodily injury or death liability to more than one person

Professional Liability Insurance in California

No matter how much a company strives for success, mistakes are bound to happen along the way. Professional liability insurance pays for attorney fees and court costs that might otherwise be too excessive for a small business to afford. In addition, when a product or service causes harm to a customer, the customer may sue for a high settlement. Even executives can make errors that lead to customer complaints, so it helps to have sufficient professional liability insurance in place.

How Much Is Business Insurance in California?

Your monthly premium costs will depend on three main factors:
  • business location
  • type of operation
  • your claims history

Location matters because specific zip codes have higher crime rates than others, presenting higher risks of burglary. A sole proprietor who works at home might not pay much for insurance, but a company with employees and vehicles will pay substantially more on coverage. Talk with your insurer to customize your policy so that you can control costs by adjusting risk management, deductibles, and coverage limits.

While there are many choices for small business insurance in California, you need to find the right insurance company that matches your business goals. The best way is to find an insurer who earns your business by showing they want to learn and contribute to its success. Then, contact us at Little & Sons Insurance Services to determine how proper risk management can help you maximize business insurance.

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After 23 Years of serving our clients at our location in Beaumont, CA it is with a heavy heart that we are consolidating our operations to our Banning Office. We will be available all the same hours and will work to make this transition as smooth as possible. Thank you for your continued business and we look forward continuing to serve your insurance needs. Our contact information will stay the same so feel free to contact us.