Microlending Companies Insurance – What Kind and at What Cost

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

Need General Liability Insurance for Your Microlending Companies Business?
Get Your Free Quote

With the protection provided by general 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 microlending companies enterprise, you must consider how much financial danger you are taking on.

Business Insurance for microlending companies

If your microlending companies 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 upshots 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 we can, a rough guide to how much you can expect to pay.

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

What this means, for any microlending companies business owner, is that if some company 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 microlending companies business is not sheltered 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 Montana, 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 duty 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 microlending companies operations, you can’t deny responsibility for the results 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 microlending companies insurance protect you from?

For your microlending companies business, the most important sorts of insurance are intended to cover the risks to your business from accidents, from unexpected events, and from mistakes.

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

In the next few paragraphs, we will outline the most important points any microlending companies business owner should remember when negotiating the insurance needed.

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

Liability insurance

General liability insurance

Any microlending companies business is dealing directly with other people, 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 require compensation.

General liability insurance policy for your microlending companies business protects you against claims coming from injury to visitors or damage to their property.

It protects your microlending companies business from the claims themselves and as well to any associated 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 microlending companies business would be with a boundary of $1 million for a single event 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 microlending companies insurance operations.

Professional liability insurance for your microlending companies business

In the event where a customer alleges some negligence, errors, or omissions in how you conducted your microlending companies business for them, you can quickly be involved in a court case.

Even if the matter against you is ruled in your favor, the cost of defense can be substantial, and the impact on your reputation can be damaging.

Most small microlending companies business should have enough professional liability insurance to cover a once-off claim of $25,000, with annual cover of $50,000.

See the table in the cost of microlending companies insurance section below for average prices of professional liability insurance for your microlending companies 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 what you delivered didn’t meet your description of function, or that your recommendation was basically incorrect.

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

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

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

Only you can know exactly how much insurance you must have.

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

Commercial insurance

Commercial vehicle insurance for your microlending companies business

Beware! – almost all policies for private vehicle insurance do not cover any occurrence like theft or accidental damage when the van 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 car policies guarantee the value of any vehicle in case of accident, malicious damage, fire, or theft.

As well, in case of any accident, the car itself, the content and any legal bills, medical expenses, and property damage is insured if your truck is involved in an accident.

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

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

Tools and Equipment insurance

Since your microlending companies business needs specific and dedicated equipment, you know 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 unexpected acts.

Also, 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 specialized gear quickly out of your own pocket, you need full-level equipment insurance so that you can immediately buy any equipment needed to keep your microlending companies business running.

It is impossible to advise how much equipment insurance you need – it’s really dependent on how much you have invested in your microlending companies business’ equipment.

Commercial Property insurance

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

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

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

If your microlending companies business works in areas of high risk, like Florida or North Carolina, additional 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 microlending companies business premises, there is a need for more supplementary cover than in warmer climes.

Because the level of cover depends entirely 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 microlending companies insurance section below to give some indication of the average prices per million dollars of property insurance for your microlending companies business.

Temporary insurance by month, week or day for your microlending companies business

Is your microlending companies 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 microlending companies – 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 adequate risk cover.

The key feature of short-term insurance is that you purchase the cover for a defined period – a specific 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 improved.

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

Business Owners Policy BOP for your microlending companies business

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

A BOP merges commercial property and public liability insurance by packaging 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 microlending companies businesses, such as yours.

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

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

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

The typical business that is allowed to take a BOP policy must have fewer than one hundred employees, and not more than five million dollars in annual turnover.

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

Workers Compensation insurance for your microlending companies business employees

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

Workers compensation insurance covers the business against any costs that arise if any hired hand 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 required 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 can’t get your workers compensation obligations from private insurance companies.

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 consult the relevant authorities in your state.

Average costs of these types of insurance

Although every microlending companies insurance level is unique, there are enough examples of standard 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 microlending companies businesses needs.

Types of insurance Price range
Equipment insurance $430 – $1065
General liability insurance $595 – $915
Commercial vehicle insurance $1715 – $2785
Product liability insurance $295 – $805
Public liability insurance $325 – $610
Commercial insurance $1075 – $2360

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

We have calculated these figures for small freelance microlending companies businesses.

In larger states like California, premiums are generally about 20%-30% higher than national averages, while in smaller states like Oregon, they usually are about 20%-30% cheaper.

The location and size and type of your microlending companies 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.

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

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

FAQ

What is small business insurance for microlending companies operations?

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

Does my microlending companies business have to have insurance?

Some of the kinds of insurance are not mandatory for you to open 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 microlending companies business insurance policy cover?

Liability insurance provides insurance against lawsuits or claims filed by a client 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 recommended policies for microlending companies insurance.

How much will microlending companies 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.

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

Was this helpful? Share it!
SBCoverage.com
Enable registration in settings - general