If you have decided to register a certain business under the Limited Liability Company (LLC) structure, you are taking a very important step to protect your assets. In this way, you considerably reduce liability for any occurrence that could put them at serious risk.
But even though an LLC takes care of your assets and allows them not to be included in your business, the chances of your company needing an additional insurance policy is a great opportunity to keep them 100% protected in case they are held responsible for certain problems linked to a small company, such as a big debt, for example.
What does LLC insurance consist of?
Limited Liability Company insurance will protect your business against any liability claims. Such claims may be related to property damage and bodily injury caused by employees, products, or your business.
Today, many, many businesses have decided to register as LLCs. And as we have already mentioned, thanks to this action, it will be possible to separate business from personal assets. In this way, the probability of risks in any situation is reduced.
But do I need LLC insurance?
Of course, you do. It is an excellent idea to take out this type of insurance. Otherwise, you will have to pay out of pocket the expenses related to a possible lawsuit, which could mean a serious risk for some small businesses.
It is important to know that the type of LLC insurance will depend on your managing company. But also on the kinds of risks, you generally face daily.
Some policies related to Limited Liability Company may cover certain situations:
- Protection of your business property and possessions.
- In case of lawsuits, it could cover the entire legal process.
- Reduces any personal property risk.
What is mandatory coverage for this type of insurance?
You can make the most of LLC insurance in the following ways:
1. Professional liability insurance
This type of insurance is indispensable to protect your business if you are sued by a client who considers the services offered wrong. It is also recognized in the country for errors and commission coverage.
2. General liability insurance
Many know it as commercial liability insurance. It is indispensable if a client’s claims are linked to damage to a third party’s property or personal injury. For example, if a customer is in your business, slips, and breaks a leg, LLC insurance will protect you in case of a lawsuit. If you do not have such a policy, you will most likely have to take money out of your pocket to pay for the suit.
What types of coverages are necessary to attach to LLC insurance?
You can certainly be much better protected if you are a small company. Your LLC may opt for policies to take care of that business that is important to you from other liabilities. These can be:
- Workers’ compensation insurance: The law has been quite clear in some U.S. states to require companies to carry workers’ compensation insurance if they manage staff. It is essential to help you recover satisfactorily if you suffer a personal injury.
- Commercial auto insurance: This type of insurance is important because it covers any property damage or hospital expenses if an employee (or yourself) suffers an accident while driving the company car.
- Commercial income insurance: It is indispensable to cover expenses in case the company does not have the opportunity to open operations, provided property damage is covered. If you opt for this type of insurance, it will surely support you in case of loss of income.
- Commercial property insurance: Commercial property insurance aims to take care of the physical location of the real estate or property. But it also covers rent, work tools, and inventory.
How much should I pay for LLC insurance?
We cannot talk about an impressive amount. The reason is simple and is that each company has its own needs. Depending on this, you can choose the LLC insurance that best suits your needs and requirements. And depending on this, the amount of your policy will vary.
If you are considering contracting your insurance of this type, it is important to consider some elements that could determine the total amount.
Claims history, income, location, and the number of employees will undoubtedly influence the total amount. But if you want the real figure to be clear on what you should pay per month or year, ask for a quote.