How to Calculate Business Liability Insurance
Like any valuable, boats should have specific insurance coverage.
- 1 [Sole Proprietor Business] | The Average Cost of Insurance Coverage for a Sole Proprietor Business
- 2 [Liability Insurance Pay] | What Does Liability Insurance Pay?
- 3 [Sole Proprietorship Business] | Should I Have Liability Insurance for a Sole Proprietorship Business?
- 4 [Employees Need Workers] | Does a Sole Proprietor With No Employees Need Workers Compensation?
Without liability insurance, if you lose a lawsuit, you will have to pay the judgment yourself. This can financially devastate your business and personal finances. There are three types of liability insurance: general, product and professional. Some states require that businesses maintain certain types of liability insurance according to their type of business, such as with medical providers and medical liability insurance. Many businesses require more than one liability policy to meet state laws and to ensure total protection.
1. Make an inquiry with your state’s Department of Insurance regarding the required policies for your type of business. In some cases, there are state or federal mandates regarding how much coverage you must purchase. For example, commercial trucking companies must maintain at minimum a $750,000 general liability policy.
2. Talk with insurance providers about the types of liability insurance your company needs. Ask for quotes based on the size of your business, its revenues or government policy requirements. Insurance companies typically base quotes for manufacturing and distribution companies on sales revenues. However, businesses such as attorney’s offices and consulting firms receive quotes based on the square footage of occupancy.
3. Calculate quotes by multiplying the rate by the size or revenues of your company. For example, if the quote is for 10 percent, multiply your gross revenues by 0.10 to calculate your cost. If the quote is $25 per square foot, multiply $25 by the amount of occupied square footage in your office.