Knowing What to Expect Will Help Your Business Choose the Right Policy
When you’re starting a business there are a ton of little things that you’ll need to check off to make sure everything is taken care of. From deciding on where you’ll be located to how you decorate your space, there’s a lot you need to do to get started. Ohio small business insurance is only one of these tasks, and as things start to pile up, you’ll likely wonder how much insurance is going to cost.
Even if your business is already established, re-evaluating your insurance is necessary to be sure that you have the complete coverage you need. As your business grows, you may need to increase the limit on your insurance or possibly obtain a new policy as you obtain new services and abilities for your business.
Ohio small business insurance is a necessary expense for business owners across the state. Without it, you’re putting your business and everything you own at risk. It’s not worth racking up costs that you can’t afford because you don’t want to put money toward insurance policies. As a new business, it’s easy to feel like your budget is stretching thin quickly. However, if you’re aware of how much things cost before you get into the weeds you can save yourself a headache. As insurance agents, we’re all about being prepared for the future, and that includes being aware of how your insurance policy is going to come together.
The unfortunate truth is that there is no set cost to insurance policies because it varies for everyone. A small business is defined as less than 500 employees, so you won’t have to worry about facing the astronomical costs that large corporations have. One example might be a business with less than five employees working from home, their policy may only be $500 because they only need to have one or two policies. For a larger business, they may see costs at $10,000 over several different policies.
There’s a number of factors that go into how much your policy will cost, from how many employees you have to the types of insurance you need. You can put together a general idea in order to create a baseline when you go to talk with your agent, which will help make the process less painful and potentially shocking on your end. Of course, obtaining insurance isn’t a tedious and difficult process, but you can’t expect it to be free. At the end of the day, what matters is that what you’re responsible for is protected. This way if something were to happen you can rest easy that large payments won’t be your cross to bear, or worse, the downfall of your business.
Knowing the Factors that Go Into Determining the Cost of Your Ohio Small Business Insurance Will Help You Be More Prepared
So what goes into the cost of your insurance? Just about everything. Here’s what you should consider in relation to your business when you’re looking at Ohio small business insurance.
- Your industry - if you’re working in a high-risk industry, you’re going to face higher costs for insurance because there’s more to cover. Low-risk industries aren’t going to face the same prices
- Your assets - if the total worth of your assets is significant, you’re going to see higher costs in order to make sure they’re protected
- Your property - where your business is located will make a difference. Premiums are going to be higher for someone working in a large office building in the city than out of an office in a township
- How many employees you have - the more employees you have, the more benefit insurance, workers’ compensation, and liability insurance you’re going to have to pay
- The size of your payroll - your premiums will be higher the more you’re paying your employees. This obviously ties into your revenue as well, so if you’re making $100,000 you’re going to be paying less than a business making $500,000
- The limit on your policy - the limit on your policy is how much your carrier will pay to cover your costs, the higher it is, the more you’re going to pay
- Your deductible - if you choose a lower deductible, your overall premium is going to be higher. You might be able to cut your costs a bit by paying a higher deductible from the start
- The type of insurance you purchase - not all types of coverage are created equal. If your business only needs a General Liability policy, you’re going to pay less than someone who is combining several types of coverage together
- Your claims history - this isn’t always the case, but it’s possible for the history of your claims to have an impact on your insurance costs. Similar to how your car insurance can go up if you get in an accident, more claims could mean higher costs
Each of these will likely play some role in the cost of your insurance, but the biggest differentiator for cost is going to be the type of policy that you buy. Knowing this, you’ll want to consider how many policies you’re going to need. With a small business, whether you’re just starting out or you’ve been established for a while, there’s a lot that needs proper protection. You may need more than one type of policy to ensure that you’re covered no matter what.
How do you know what type of insurance to get? An important note for Ohio small business insurance is that there are specific requirements businesses have to follow within the state as well as within the country. You won’t need to purchase every policy that exists, but you won’t be able to skate by without these specific policies.
In Ohio, small businesses with one or more employees are required to have Workers Compensation insurance. This covers injuries or accidents that happen on the job. If you’re the sole proprietor, it’s not necessary for you to have this coverage, but you do need to have it for both part-time and full-time employees.
If you have employees who are driving for work, the state of Ohio requires that your employees have a minimum automobile insurance policy. If you are using your vehicle for business, it’s recommended, but not required, that you look into a commercial automobile policy as well.
At a base level, these are the only insurance policies you’re required to have as a small business in Ohio. However, if it’s feasible for your business, it’s recommended to have a few other policies to make sure your business and your employees are fully covered. Just having the basics won’t significantly raise your costs, but you should still talk with an insurance advisor to determine how much you’ll be paying.
About the author
Matthew T. Simon, CIC, CPCU
Since 2006, Matt has been a Licensed Insurance Advisor with Hill & Hamilton Insurance, an industry leading, independent insurance agency headquartered in Ohio. Prior to joining the team at H&H, he worked as an Underwriter with a regional insurance company located in Columbus, Ohio.
Matt is a Certified Insurance Counselor (CIC) and a Chartered Property & Casualty Underwriter (CPCU), having successfully completed the rigorous coursework and exams to earn these prestigious designations.
He’s the Vice President at H&H, serves on the Board of Directors for the Ohio Insurance Agents Association of Ohio and the Associated Risk Managers of Ohio. In 2013, Matt was awarded and recognized as the National Young Insurance Agent of the Year.