Whenever you budget the expenses of your business, Project Management insurance must be included in the list because you can’t always know exactly what can happen in the future.
Need General Liability Insurance for Your Project Management
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With the protection provided by liability insurance and all the other types of insurance we will tell you about, you can protect your business and yourself in case something unwanted happens.
Like any business owner, for your Project Management enterprise, you must consider how much financial danger you are taking on.
If your Project Management business runs without proper insurance, you are taking an enormous 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 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 Project Management business?
What this means, for any Project Management business owner, is that if some person 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 Project Management 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 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 right of the jury to award whatever amount they deem appropriate, even sometimes giving a person more than they have sued for.
When you are running your Project Management 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 Project Management insurance protect you from?
For your Project Management business, the most important kinds of insurance are meant to cover the risks to your business from accidents, from unexpected events, and from mistakes.
Also there are some legal kinds of insurance that various states require.
In the next few paragraphs, we will explain the most important points any Project Management business owner should remember when negotiating the insurance needed.
The main types of insurance for your Project Management businesses are liability insurance, commercial insurance, asset insurance and workers compensation insurance.
General liability insurance
Any Project Management business is dealing directly with customers, and that means you generally 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 Project Management business insures you against claims coming from injury to visitors or damage to their property.
It protects your Project Management business from the claims themselves and in addition 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 require proper liability insurance.
The normal level of general liability insurance for your Project Management business would be with a cap 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 Project Management insurance operations.
Professional liability insurance for your Project Management business
In the event where a buyer alleges some negligence, errors, or omissions in how you conducted your Project Management business for them, you can quickly be involved in a law suit.
Even if the case against you is ruled in your favor, the cost of defense can be large, and the impact on your reputation can be damaging.
Most small Project Management 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 Project Management insurance section below for average prices of professional liability insurance for your Project Management 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 advice was basically incorrect.
You need to understand the particular 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 Project Management
Only you can know exactly how much insurance you must have.
Best advice is to consult with experienced insurance agents, brokers or company representatives for help.
Commercial vehicle insurance for your Project Management business
Be careful! – almost 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 direct commercial vehicle insurance package.
Commercial van policies insure the value of any vehicle in case of accident, malicious damage, fire, or theft.
In addition, in case of any accident, the van 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, 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 Project Management business needs specialized 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 unpredicted 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 must have full-level equipment insurance so that you can immediately buy everything needed to keep your Project Management business running.
It is impossible to advise how much equipment insurance you need – it’s basically dependent on how much you have invested in your Project Management business’ equipment.
Commercial Property insurance
Any Project Management business that owns or rents space in a building needs a commercial property insurance policy.
If you own the property, you certainly have a substantial capital investment, in addition to a big liability if there’s a mortgage.
Your physical building location needs to 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 Project Management business deals in areas of high risk, like California or North Carolina, supplementary coverage may be needed for earthquakes and hurricanes or tornadoes.
In other states like Rhode Island, where extreme cold snaps can cause damage to outer coverings of Project Management business premises, there is a need for more supplementary cover than in warmer climes.
Although 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 Project Management insurance section below to give some idea of the average prices per million dollars of property insurance for your Project Management business.
Temporary insurance by month, week or day for your Project Management business
Is your Project Management business working part-time or casually, or is the level of business variable?
Using short-term insurance makes good sense. Business insurance by the month, day, or week – temporary insurance for Project Management – 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 lower premiums but still having adequate risk cover.
The key feature of short-term insurance is that you pay for 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 Project Management 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 integrates commercial property and public liability insurance by incorporating these coverages into one insurance policy, which can save you money.
BOP insurance will shield you if any claims of injury or property damage are made.
It is often the right choice for small and medium-sized Project Management businesses, such as yours.
There are some limits that will rule whether BOP is suitable for your own business.
BOPs do 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 normal business that is allowed to take a BOP policy must have fewer than one hundred employees, and under five million dollars in annual turnover.
As well, you must separately take out the mandated worker’s compensation, health and disability insurance as determined for your state.
Workers Compensation insurance for your Project Management business employees
In almost all states, it is mandatory to have workers compensation insurance when your Project Management business has one or more employees.
Workers compensation insurance covers the enterprise 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 laws 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 authorize coverage from the government-run monopoly state funds.
In these states, you cannot get your workers compensation obligations from private insurance companies.
Workers compensation premiums are worked out 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 Project Management insurance need 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 insurance representative what’s relevant for your business.
The list below is of annual premiums we have collected for the main types of insurance your Project Management businesses needs.
|Types of insurance||Price range|
|Public liability insurance||$380 – $625|
|General liability insurance||$590 – $865|
|Product liability insurance||$280 – $795|
|Equipment insurance||$405 – $1030|
|Commercial insurance||$1055 – $2695|
|Commercial vehicle insurance||$1540 – $2990|
Cost of insurance for your Project Management operations depends on many different factors.
We have calculated these figures for small independent Project Management businesses.
In larger states like New York, premiums are generally about 20%-30% higher than national averages, but in smaller states like Utah, they can be about 20%-30% cheaper.
The location and size and type of your Project Management 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.
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Also you can let the internet do the work for you by searching for insurance companies near where your business is located.
Another reliable source of information is the local Better Business Bureau in your town.
What is small business insurance for Project Management operations?
This is a wide term used to describe common insurance policies designed to protect Project Management business owners from risks like bodily injury, property damage, claims of negligence.
Does my Project Management business have to have insurance?
Some of the forms 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 Project Management business insurance policy cover?
Liability insurance provides coverage 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 recommended policies for Project Management insurance.
How much will Project Management business insurance cost?
On top of the size of the business, certain other factors, such as location and claims history, are used to determine your policy’s cost.
You should discuss with professional insurance agents and brokers, or insurance company representatives.