Project Management insurance – cost and types of policies

Whenever you budget the expenses of your business, Project Management insurance must be near the top of the list because you can’t always know exactly what can happen in the future.

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 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 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 small 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 company 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 Project Management business is not harbored 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 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 claimant 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 up-front the money necessary to have your business running as a limited liability company, all of that liability belongs to you alone.

What does Project Management insurance protect you from?

For your Project Management business, the most important types 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 consider 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.

Liability 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 themselves or else something of theirs can be damaged.

In such a case, they can sue you for compensation.

General liability insurance policy for your Project Management business covers you against claims coming from injury to visitors or damage to their property.

It protects your Project Management business from the claims themselves and as well to any resulting 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 usual level of general liability insurance for your Project Management business would be with a boundary 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 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 monetary claim.

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

Every small Project Management business should have enough professional liability insurance to cover a single 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 buyers may claim that what you delivered didn’t meet your description of function, or that your guidance was basically incorrect.

You need to be aware of the explicit 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 possible lawsuit, you need Product liability insurance for Project Management

Only you can determine exactly how much insurance you need.

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

Commercial insurance

Commercial vehicle insurance for your Project Management business

Take care! – practically all policies for private vehicle insurance do not cover any event 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 proper commercial vehicle insurance package.

Commercial truck 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 covered if your truck is involved in a crash.

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

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

Tools and Equipment insurance

Since your Project Management business needs specific and expensive equipment, you know 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.

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 need full-level equipment insurance so that you can immediately buy whatever 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 must have a commercial property insurance policy.

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

Any 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 man-made damages like theft and vandalism.

If your Project Management business deals in areas of high risk, like Texas or Georgia, extra 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 Project Management business premises, there is a need for more extra cover than in warmer climes.

Whereas 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 fluctuating?

Using short-term insurance makes perfect sense. Business insurance by the month, day, or week – temporary insurance for Project Management – 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 lower premiums but still having identical risk cover.

The key feature of short-term insurance is that you purchase 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 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 Project Management 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 cover 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 a few limits that will determine 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 dictate whether you are allowed to take out BOP cover.

The typical business that can take out a BOP policy must have fewer than one hundred employees, and not more than five million dollars in annual revenue.

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 many 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 a worker experiences an injury or becomes sick as a result of work.

The benefits include 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 authorize coverage from the government-run monopoly state funds.

In these states, you can’t obtain your workers compensation obligations from private insurance providers.

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 refer to the relevant authorities in your state.

Average costs of these types of insurance

Although every Project Management insurance level 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 gathered for the main types of insurance your Project Management businesses needs.

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

We have estimated these figures for small freelance Project Management businesses.

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

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.

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

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

FAQ

What is small business insurance for Project Management operations?

This is an umbrella 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 kinds 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 protection against lawsuits or claims filed by a third-party for bodily injury, property damage, or negligence.

The precise cover will vary based on your own operations.

See the table in the costing section above for average prices of the most common policies for Project Management insurance.

How much will Project Management business insurance cost?

On top of 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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