Architecture Firms Insurance – Cost and Types Of Policies

Whenever you budget the expenses of your business, architecture firms insurance must be high on the list because you can’t always know exactly what could happen in the future.

With the protection provided by liability insurance and all the other sorts of insurance we will tell you about, you can protect your business and yourself in case something unforeseen happens.

Like any business owner, for your architecture firms enterprise, you must consider how much financial risk you are taking on.

If your architecture firms business runs without proper insurance, you are taking an enormous chance not just of losing some money but of a final wipe-out.

This is because the laws in every state are very strict in enforcing liability on the owners of businesses for the results of their actions. 

In this article, we are giving very general guidelines for growing businesses to outline what the main kinds of insurance that you need are, and where available, a rough guide to how much you can expect to pay.

The question is, can you afford to NOT have insurance for your architecture firms business?

What this means, for any architecture firms business owner, is that if some customer claims that your business caused them some physical or economic damage, a court can award damages far beyond the total size of your business.

Your architecture firms business is not protected by laws in the same way as states are, where legislation can place a “cap” on the maximum level of liability.

In some states, like New Jersey, there are specific monetary levels that limit the amount an adjudicator can award in any case against the state.

In a court case, it’s purely the right of the jury to award whatever amount they deem appropriate, even sometimes giving a person more than they have sort.

When you are running your architecture firms operations, you can’t deny responsibility for the consequences of your actions.

Even more importantly, unless you have spent up-front the money necessary to have your business running as an LLC, all of that liability belongs to you as a person.

What does architecture firms insurance protect you from?

For your architecture firms business, the most important kinds of insurance are designed to cover the risks to your business from accidents, from unexpected events, and from mistakes.

In addition there are some legal kinds of insurance that various states require.

In the next few paragraphs, we will outline the most important points any architecture firms business owner should know when negotiating the insurance needed.

The main types of insurance for your architecture firms businesses are liability insurance, commercial insurance, asset insurance and workers compensation insurance.

Liability insurance

General liability insurance

Any architecture firms business is dealing directly with members of the public, and that means you generally have the danger that some accident can happen to them bodily or else something of theirs can be damaged.

In such a case, they can sue you for compensation.

General liability insurance policy for your architecture firms business protects you against claims coming from injury to customers or damage to their property.

It protects your architecture firms business from the claims themselves and in addition to any follow-on court costs and legal fees of the lawsuits.

In many cases, it should help you to qualify for extra business from city and state organizations, where contracts insist on proper liability insurance.

The average level of general liability insurance for your architecture firms business would be with a upper limit of $1 million for a single submission and a total of $2 million for the whole year.

See the table in the costing section below for average prices of general liability insurance for your architecture firms insurance operations.

Professional liability insurance for your architecture firms business

In the event where a client alleges some negligence, errors, or omissions in how you conducted your architecture firms business for them, you can quickly have to fight a law suit.

Even if the case against you is decided in your favor, the cost of defense can be large, and the impact on your reputation can be damaging.

Almost all small architecture firms business should have enough professional liability insurance to cover an individual claim of $25,000, with annual cover of $50,000.

See the table in the cost of architecture firms insurance section below for average prices of professional liability insurance for your architecture firms operations.

Product liability insurance

Whatever goods you sell or advice you give about the goods, you are running a risk that buyers may claim that the results didn’t meet your description of function, or that your advice was basically incorrect.

You need to know the specific laws of product liability in your own state.

For example, in California, all businesses in the supply chain can be held responsible for damages caused by products claimed to be defective.

To cover yourself against any likely lawsuit, you need Product liability insurance for architecture firms

Only you can determine exactly how much insurance you should get.

Best advice is to contact experienced insurance agents, brokers or company representatives for support.

Commercial insurance

Commercial vehicle insurance for your architecture firms business

Take care! – almost all policies for private vehicle insurance do not cover any happening like theft or accidental damage when the vehicle is being used for business purposes.

The right way to make sure that your vehicle is insured for both its own value, and the valuable contents, is by taking out a direct commercial vehicle insurance package.

Commercial van policies cover the value of any vehicle in case of accident, malicious damage, fire, or theft.

In addition, in case of any accident, the truck itself, the content and any legal bills, medical expenses, and property damage is guaranteed if your truck is involved in an accident.

Most states, other than Virginia and New Hampshire, insist on this type of insurance.

The required value of the insurance is calculated on the depreciated value of the vehicle, and your intended level of cover of contents. 

Tools and Equipment insurance

Since your architecture firms business needs specific and dedicated equipment, you will realize how much it can cost to replace it in case of any damage, loss, or theft.

The equipment may be subject to malicious damage, deliberate fire, theft, other such unforeseen acts.

In addition, acts of nature like lightning strikes, hurricanes, earthquakes, and other highly damaging natural events can eliminate your whole business in one stroke.

Unless you can afford to immediately replace such specialized gear quickly out of your own pocket, you need full-level equipment insurance so that you can immediately buy everything needed to keep your architecture firms business running.

It is difficult to advise how much equipment insurance you need – it’s really dependent on how much you have invested in your architecture firms business’ equipment.

Commercial Property insurance

Any architecture firms business that owns or rents space in a building needs a commercial property insurance policy.

If you own the building, you certainly have a substantial capital investment, as well as a big liability if there’s a mortgage.

Any physical building location must carry insurance coverage for the value of the premises and contents against unexpected occurrences like fire and storms, and against man-made damages like theft and vandalism.

If your architecture firms business deals in areas of high risk, like Texas or North Carolina, additional coverage may be needed for earthquakes and hurricanes or tornadoes.

In other states like Washington, where unlimited cold snaps can cause damage to outer coverings of architecture firms business premises, there is a need for more additional cover than in warmer climes.

Because the level of cover depends completely on the value of the property, it’s not possible to say what cover your need, but we have been able in the table in the cost of architecture firms insurance section below to give some estimate of the average prices per million dollars of property insurance for your architecture firms business.

Temporary insurance by month, week or day for your architecture firms business

Is your architecture firms business working part-time or casually, or is the level of business seasonal?

Using short-term insurance makes perfect sense. Business insurance by the month, day, or week – temporary insurance for architecture firms – are special policies where you can cover a designated period when you want to be covered.

By only paying for that period of cover, you will save by having less premiums but still having identical risk cover.

The essential feature of short-term insurance is that you purchase the cover for a defined period – a designated date, or a week or month starting on a specific date, for example for 30 days beginning on the specified date.

When you are expecting periods of higher business activity, get the existing cover increased.

Talk to your insurance agent, broker or the company’s representatives to see what options you have.

Business Owners Policy BOP for your architecture firms business

You have the choice to combine a few of the important kinds of small business insurance in one policy that is known as the business owner’s policy – BOP.

A BOP combines commercial property and public liability insurance by amalgamating these coverages into one insurance policy, which can save you money.

BOP insurance will protect you if any claims of injury or property damage are made.

It is mostly the right choice for small and medium-sized architecture firms businesses, such as yours.

There are two limits that will rule whether BOP is suitable for your own business.

BOPs will not cover your professional liability or commercial vehicle policies.

Also, the size of your business will determine whether you are eligible to take out BOP cover.

The usual business that is allowed to take a BOP policy must have no more than one hundred employees, and under five million dollars in annual revenue.

Plus, you must separately take out the required worker’s compensation, health and disability insurance as determined for your state.

Workers Compensation insurance for your architecture firms business employees

In almost all states, it is mandatory to have workers compensation insurance when your architecture firms business has one or more employees.

Workers compensation insurance covers the business against any costs that arise if a worker experiences an injury or becomes sick as a result of work.

The benefits cover medical expenses, death benefits, lost wages, and vocational rehabilitation.

Failure to meet a state’s regulations in this regard can leave you as the employer having to pay penalties levied by the states.

Some states, such as North Dakota, Ohio, Washington, West Virginia, and Wyoming only allow coverage from the government-run monopoly state funds.

In these states, you can’t take out your workers compensation obligations from private insurance companies.

Workers compensation charges are calculated based on the employee’s pay, and usually come out at around $1.00 per $100 per month.

However, you must refer to the relevant authorities in your state.

Average costs of these types of insurance

Although every architecture firms insurance requirement is unique, there are enough examples of average quotes from insurance companies for us to give approximate guidelines, including what are the cheapest rates offered.

Of course, you should always check with an insurance representative what’s relevant for your business.

The list below is of annual premiums we have gathered for the main types of insurance your architecture firms businesses needs.

Cost of insurance for your architecture firms operations depends on many different factors.

We have calculated these figures for small self-employed architecture firms businesses.

In larger states like California, premiums are generally about 20%-30% higher than national averages, but in smaller states like Utah, they will be about 20%-30% cheaper.

The location and size and type of your architecture firms business can have a big effect on the cost of different policies.

You should discuss with professional insurance agents and brokers, or insurance company representatives.

Also you can let the internet do the work for you by looking for insurance companies near where your business is located.

Another good source of information is the local Better Business Bureau in your city.

FAQ

What is small business insurance for architecture firms operations?

This is a wide term used to describe basic insurance policies designed to protect architecture firms business owners from risks like bodily injury, property damage, claims of negligence.

Does my architecture firms business have to have insurance?

Some of the forms of insurance are not mandatory for you to run your business, but they can protect you from risks in your business operations.

Several other forms are required by state law, such as workers compensation and vehicle insurance.

What does a small architecture firms business insurance policy cover?

Liability insurance provides protection against lawsuits or claims filed by a third-party for bodily injury, property damage, or negligence.

The specific cover will vary based on your own operations.

See the table in the costing section above for average prices of the best policies for architecture firms insurance.

How much will architecture firms business insurance cost?

On top of the size of the business, several other factors, such as location and claims history, are used to determine your policy’s cost.

You should talk to professional insurance agents and brokers, or insurance company representatives.

You can search for more information insurance for architecture firms, in the search box below, and follow the relevant links.

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