Lifestyle insurance – cost and types of policies

Whenever you budget the expenses of your business, Lifestyle 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 general insurance and all the other types of insurance we will tell you about, you can protect your business and yourself in case something unexpected happens.

Like any business owner, for your Lifestyle enterprise, you must consider how much financial liability you are taking on.

If your Lifestyle business runs without proper insurance, you are taking a tremendous chance not just of losing some money but of a total wipe-out.

This is because the laws in every state are very strict in enforcing liability on the owners of businesses for the consequences 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 available, a rough guide to how much you can expect to pay.

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

What this means, for any Lifestyle business owner, is that if some person 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 Lifestyle business is not sheltered by laws in the same way as states are, where laws can place a “cap” on the maximum level of liability.

In some states, like Texas, there are specific monetary levels that limit the amount a judge can award in any case against the state.

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

When you are running your Lifestyle operations, you can’t escape 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 Lifestyle insurance protect you from?

For your Lifestyle business, the most important kinds of insurance are meant 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 explain the most important points any Lifestyle business owner should know when negotiating the insurance needed.

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

Liability insurance

General liability insurance

Any Lifestyle business is dealing directly with customers, and that means you usually have the danger that some accident can happen to them personally or else something of theirs can be ruined.

In such a case, they can require compensation.

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

It protects your Lifestyle business from the claims themselves and in addition to any follow-on 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 Lifestyle business would be with a boundary 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 Lifestyle insurance operations.

Professional liability insurance for your Lifestyle business

In the event where a client alleges some negligence, errors, or omissions in how you conducted your Lifestyle business for them, you can quickly face a monetary claim.

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

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

Product liability insurance

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

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

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

To cover yourself against any possible lawsuit, you need Product liability insurance for Lifestyle

Only you can know exactly how much insurance you need.

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

Commercial insurance

Commercial vehicle insurance for your Lifestyle business

Beware! – practically all policies for private vehicle insurance do not cover any event like theft or accidental damage when the car is being used for business purposes.

The proper 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 van policies insure the value of any vehicle in case of accident, malicious damage, fire, or theft.

As well, in case of any accident, the van itself, the content and any legal bills, medical expenses, and property damage is covered if your truck is involved in a crash.

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

The necessary value of the insurance is worked-out for the depreciated value of the vehicle, and your requested level of cover of contents. 

Tools and Equipment insurance

Since your Lifestyle 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.

Also, 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 should have full-level equipment insurance so that you can immediately buy everything needed to keep your Lifestyle 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 Lifestyle business’ equipment.

Commercial Property insurance

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

If you own the space, you certainly have a substantial capital investment, in addition to a big liability if there’s a mortgage.

Any physical building location should carry insurance coverage for the value of the premises and contents against natural occurrences like fire and storms, and against deliberate damages like theft and vandalism.

If your Lifestyle business operates in areas of high risk, like Florida or North Carolina, supplementary coverage may be needed for earthquakes and hurricanes or tornadoes.

In other states like Illinois, where extreme cold snaps can cause damage to outer coverings of Lifestyle business premises, there is a need for more extra 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 Lifestyle insurance section below to give some estimate of the average prices per million dollars of property insurance for your Lifestyle business.

Temporary insurance by month, week or day for your Lifestyle business

Is your Lifestyle business working part-time or casually, or is the level of business variable?

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

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

The important 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 larger 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 Lifestyle business

You have the option 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 integrates 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 frequently the right choice for small and medium-sized Lifestyle businesses, such as yours.

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

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

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

The usual business that can take out a BOP policy must have less than one hundred employees, and maximum five million dollars in annual turnover.

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

Workers Compensation insurance for your Lifestyle business employees

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

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

The benefits provide for 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 obliged 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 may not obtain your workers compensation obligations from private insurance providers.

Workers compensation charges are computed 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 Lifestyle insurance level is unique, there are enough examples of usual quotes from insurance companies for us to give rough guidelines, including what are the cheapest rates offered.

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

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

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

We have reckoned these figures for small freelance Lifestyle businesses.

In larger states like Texas, premiums are generally about 20%-30% higher than national averages, whereas in smaller states like Oregon, they usually are about 20%-30% lower.

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

You should talk to 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 city.

FAQ

What is small business insurance for Lifestyle operations?

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

Does my Lifestyle 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.

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

What does a small Lifestyle business insurance policy cover?

Liability insurance provides insurance against lawsuits or claims filed by a customer 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 Lifestyle insurance.

How much will Lifestyle business insurance cost?

On top of the size of the business, some 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.

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