Online bookkeeping insurance – cost and types of policies

Whenever you budget the expenses of your business, Online bookkeeping insurance must be near the top of the list because you can’t always know exactly what is going to happen in the future.

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With the protection provided by liability insurance and all the other kinds 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 Online bookkeeping enterprise, you must consider how much financial liability you are taking on.

business insurance Online bookkeeping

If your Online bookkeeping business runs without proper insurance, you are taking a giant chance not just of losing some money but of a complete 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 growing 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 Online bookkeeping business?

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

Your Online bookkeeping business is not protected 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 Montana, 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 privilege 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 Online bookkeeping operations, you can’t deny 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 a limited liability company, all of that liability belongs to you alone.

What does Online bookkeeping insurance protect you from?

For your Online bookkeeping business, the most important types of insurance are designed to cover the risks to your business from accidents, from unexpected events, and from mistakes.

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

In the next few paragraphs, we will explain the most important points any Online bookkeeping business owner should consider when negotiating the insurance needed.

The main categories of insurance for your Online bookkeeping businesses are liability insurance, commercial insurance, asset insurance and workers compensation insurance.

Liability insurance

General liability insurance

Any Online bookkeeping business is dealing directly with members of the public, 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 sue you for compensation.

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

It protects your Online bookkeeping 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 usual level of general liability insurance for your Online bookkeeping 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 Online bookkeeping insurance operations.

Professional liability insurance for your Online bookkeeping business

In the event where a customer alleges some negligence, errors, or omissions in how you conducted your Online bookkeeping business for them, you can quickly face a court case.

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

Every small Online bookkeeping 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 Online bookkeeping insurance section below for average prices of professional liability insurance for your Online bookkeeping 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 what you delivered didn’t meet your description of function, or that your recommendation 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 culpable for results caused by products claimed to be defective.

To cover yourself against any likely lawsuit, you need Product liability insurance for Online bookkeeping

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

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

Commercial insurance

Commercial vehicle insurance for your Online bookkeeping business

Beware! – practically all policies for private vehicle insurance do not cover any event 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 van policies cover the value of any vehicle in case of accident, malicious damage, fire, or theft.

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

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

The required 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 Online bookkeeping business needs unique and costly 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 unpredicted acts.

As well, acts of nature like lightning strikes, hurricanes, earthquakes, and other highly damaging natural events can destroy 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 Online bookkeeping 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 Online bookkeeping business’ equipment.

Commercial Property insurance

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

If you own the space, you probably have a substantial capital investment, along with a big liability if there’s a mortgage.

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

If your Online bookkeeping business works in areas of high risk, like Texas or Georgia, extra coverage may be needed for earthquakes and hurricanes or tornadoes.

In other states like Rhode Island, where intense cold snaps can cause damage to outer coverings of Online bookkeeping business premises, there is a need for more extra cover than in warmer climes.

Although the level of cover depends mainly 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 Online bookkeeping insurance section below to give some estimate of the average prices per million dollars of property insurance for your Online bookkeeping business.

Temporary insurance by month, week or day for your Online bookkeeping business

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

Using short-term insurance makes excellent sense. Business insurance by the month, day, or week – temporary insurance for Online bookkeeping – are special policies where you can cover a nominated 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 nominated 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 Online bookkeeping business

You have the option to combine most 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 cover you if any claims of injury or property damage are made.

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

There are two limits that will determine 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 dictate whether you are eligible to take out BOP cover.

The typical business that can take out a BOP policy must have fewer 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 Online bookkeeping business employees

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

Workers compensation insurance covers the operation against any costs that arise if a worker 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 requirements 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 permit coverage from the government-run monopoly state funds.

In these states, you may not obtain your workers compensation obligations from private insurance corporations.

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 consult the relevant authorities in your state.

Average costs of these types of insurance

Although every Online bookkeeping insurance requirement is unique, there are enough examples of average 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 collected for the main types of insurance your Online bookkeeping businesses needs.

Types of insurance Price range
Commercial insurance $1110 – $2950
Equipment insurance $340 – $1055
Product liability insurance $250 – $855
Commercial vehicle insurance $1845 – $3135
General liability insurance $675 – $1275
Public liability insurance $305 – $650

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

We have estimated these figures for small self-employed Online bookkeeping businesses.

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

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

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

As well 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 Online bookkeeping operations?

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

Does my Online bookkeeping 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 Online bookkeeping business insurance policy cover?

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

How much will Online bookkeeping business insurance cost?

In addition to the size of the business, several 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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