Customs Brokers insurance – cost and types of policies

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

With the protection provided by insurance against accidents and all the other kinds 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 Customs Brokers enterprise, you must consider how much financial danger you are taking on.

If your Customs Brokers business runs without proper insurance, you are taking a tremendous 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 startup businesses to highlight what the main kinds of insurance that you need are, and where possible, a rough guide to how much you can expect to pay.

The question is, can you afford to NOT have insurance for your Customs Brokers business?

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

Your Customs Brokers business is not harbored by laws in the same way as states are, where edicts 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 a court can award in any case against the state.

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

When you are running your Customs Brokers operations, you can’t escape responsibility for the consequences of your actions.

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

What does Customs Brokers insurance protect you from?

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

As well there are some mandatory kinds of insurance that various states require.

In the next few paragraphs, we will describe the most important points any Customs Brokers business owner should consider when negotiating the insurance needed.

The main headings of insurance for your Customs Brokers businesses are liability insurance, commercial insurance, asset insurance and workers compensation insurance.

Liability insurance

General liability insurance

Any Customs Brokers business is dealing directly with members of the public, and that means you generally have the danger that some accident can happen to them themselves or else something of theirs can be ruined.

In such a case, they can require compensation.

General liability insurance policy for your Customs Brokers business protects you against claims coming from injury to clients or damage to their property.

It protects your Customs Brokers business from the claims themselves and as well to any associated court costs and legal fees of the lawsuits.

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

The normal level of general liability insurance for your Customs Brokers business would be with a upper limit of $1 million for a single claim 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 Customs Brokers insurance operations.

Professional liability insurance for your Customs Brokers business

In the event where a customer alleges some negligence, errors, or omissions in how you conducted your Customs Brokers business for them, you can quickly be involved in a law suit.

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

Most small Customs Brokers 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 Customs Brokers insurance section below for average prices of professional liability insurance for your Customs Brokers operations.

Product liability insurance

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

You need to be aware of 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 results caused by products claimed to be defective.

To cover yourself against any following lawsuit, you need Product liability insurance for Customs Brokers

Only you can know exactly how much insurance you need.

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

Commercial insurance

Commercial vehicle insurance for your Customs Brokers business

Beware! – 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 designated commercial vehicle insurance package.

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

Also, in case of any accident, the truck itself, the content and any legal bills, medical expenses, and property damage is guaranteed if your car is involved in a collision.

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

The required value of the insurance depends on the depreciated value of the vehicle, and your requested level of cover of contents. 

Tools and Equipment insurance

Since your Customs Brokers business needs specific and costly equipment, you can appreciate how much it can cost to replace it in case of any damage, loss, or theft.

The gear 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 wipe-out your whole business in one stroke.

Unless you can afford to immediately replace such specific gear quickly out of your own pocket, you should have full-level equipment insurance so that you can immediately buy any equipment needed to keep your Customs Brokers business running.

It is impossible to advise how much equipment insurance you need – it’s essentially dependent on how much you have invested in your Customs Brokers business’ equipment.

Commercial Property insurance

Any Customs Brokers business that owns or rents space in a building should have a commercial property insurance policy.

If you own the building, you probably have a substantial capital investment, in addition to 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 Customs Brokers business operates in areas of high risk, like California or Georgia, extra coverage may be needed for earthquakes and hurricanes or tornadoes.

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

Although 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 Customs Brokers insurance section below to give some indication of the average prices per million dollars of property insurance for your Customs Brokers business.

Temporary insurance by month, week or day for your Customs Brokers business

Is your Customs Brokers business working part-time or casually, or is the level of business fluctuating?

Using short-term insurance makes good sense. Business insurance by the month, day, or week – temporary insurance for Customs Brokers – 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 reduced premiums but still having identical risk cover.

The key feature of short-term insurance is that you buy 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 better 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 Customs Brokers business

You have the chance 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 often the right choice for small and medium-sized Customs Brokers businesses, such as yours.

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

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

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

The normal business that can take out a BOP policy must have fewer than one hundred employees, and under five million dollars in annual sales.

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

Workers Compensation insurance for your Customs Brokers business employees

In many states, it is mandatory to have workers compensation insurance when your Customs Brokers business has one or more employees.

Workers compensation insurance covers the business against any costs that arise if an employee 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 requirements in this regard can leave you as the employer obliged to pay penalties levied by the states.

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

In these states, you may not 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 see the relevant authorities in your state.

Average costs of these types of insurance

Although every Customs Brokers insurance need is unique, there are enough examples of standard quotes from insurance companies for us to give appropriate guidelines, including what are the cheapest rates offered.

Of course, you should always check with a broker what’s relevant for your business.

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

Cost of insurance for your Customs Brokers operations depends on many different factors.

We have estimated these figures for small freelance Customs Brokers businesses.

In larger states like Texas, premiums are generally about 20%-30% higher than national averages, whereas in smaller states like New Mexico, they will be about 20%-30% cheaper.

The location and size and type of your Customs Brokers 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.

As well you can let the internet do the work for you by enquiring about insurance companies near where your business is located.

Another reliable source of information is the local Better Business Bureau in your town.

FAQ

What is small business insurance for Customs Brokers operations?

This is an umbrella term used to describe basic insurance policies designed to protect Customs Brokers business owners from risks like bodily injury, property damage, claims of negligence.

Does my Customs Brokers business have to have insurance?

Some of the types of insurance are not mandatory for you to operate 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 Customs Brokers business insurance policy cover?

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

The exact cover will vary based on your own operations.

See the table in the costing section above for average prices of the recommended policies for Customs Brokers insurance.

How much will Customs Brokers business insurance cost?

As well as the size of the business, certain other factors, such as location and claims history, are used to determine your policy’s cost.

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

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